Brazil’s business community is growing increasingly concerned about the potential impact of the imminent outbreak of World Cup passion on productivity in an economy where shopfloor efficiency is already poor.
This is in sharp contrast with the initial excitement when Brazil and Rio de Janeiro were selected to host this year’s Fifa World Cup and the 2016 Olympics respectively.
Finance minister Guido Mantega then predicted that each event could add one percentage point to economic growth. But the original excitement has turned into doubt, especially after several delays in infrastructure works and massive protests against the cost of organizing the World Cup according to Fifa standards.
In addition, several industries now realize that the games may disrupt production. “This is going to be a disaster,” said Dimitri Ganzelevitch, who owns a bed and breakfast in the colonial part of Salvador. While he will benefit from an increase in tourism, he said the prospects for the economy were negative.
“In Brazil, football is more important than the economy,” said Nadjair Diniz Barbosa, from the São Paulo insurance broker DCG. “And even people who do turn up at the office may think of something else,” he said. “There is no way to go against the grain, this is the way it is.”
Each time the Brazilian team plays, civil servants will likely be allowed to stay at home, and many cities will also declare a holiday to avoid chaos.
“The big problem is that the number of holidays that will be declared is astronomical. I see it is going to be a negative,” said Ganzelevitch. “These guys are going to work for a week within 30 days. In terms of what people will actually produce, it is going to be a disaster.”
In previous world cups, companies set up giant TV screens in factories or in the middle of sugar cane plantations, but this may not be good enough this time.
“There is also an issue with the opportunity cost,” said Paulo Moura, a former World Bank official.” This World Cup is costing a lot of money. But for the first time, people have mobilized to protest against this and ask for better standards in public health, education, and security,” he said.
But of course, not everybody is negative. While industry may suffer, other sectors are bound to benefit, said Manoel Felix Cintra Neto, president and CEO of Banco Indusval & Partners.
“There is a big boost for TV sales, tourism, et cetera. At the end of the day, the outcome should be positive. Banks also depend on the rest of the Brazilian economy, and the economy is already picking stronger than expected,” he said. “I don’t think there is going to be any issue.”
Others prefered to be more cautious. “The net impact is difficult to gauge,” said Paulo Paiva, a former Brazilian minister.
The worry will add to the doubts hanging over the administration of President Dilma Rousseff, who unexpectedly arrived at the IADB annual meetings last night. She infighting calls for a congressional inquiry into accusations that Petrobas, the state-owned oil company, over aid for a US refinery