What's next for Rio?
Rio's in the spotlight now. What happens after next week may be even more significant. (Photos: Getty Images)

What's next for Rio?

One week from today, the final curtain will be drawn on the 2016 Summer Olympics, and life in Rio de Janeiro will begin to return to normal. Athletes, fans, and support staff will return to their home countries.

Temporary venues will be disassembled. Security gates, trashcans, and port-o-potties—all returned to storage. But while the Olympics may be over, its legacy will live on. The question for Rio residents is what shape this legacy will take. 

If the past is any indication, the Rio 2016 “legacy” has a low bar to clear. Being selected as the host city for the Olympic Games is supposedly a high honor; in reality, it can leave some cities in worse shape than they were before. In retrospect, for example, the triumphant return of the Games to Athens in 2004, and the $9 billion that funded that effort, is now emblematic of the broader economic and fiscal crisis in that country, especially as many venues lay dormant, the government unable to afford even basic upkeep. 

Before evaluating the prospects for Rio’s post-Olympic future, it’s helpful to first consider how hosting the Games might benefit cities. By my count, there are three potential benefits: a short-term stimulus to a city’s economy thanks to increased economic activity and tourism; a medium-term boost to a city’s international stature and brand that results from being featured prominently on the world stage; and finally, the long-term impact of what are typically substantial infrastructure investments and upgrades throughout the metropolitan area. 

In practice, achieving a "surplus" in any of these areas proves difficult.

Multiple economic studies have shown that there is no consistent or significant short-term positive effect of the Olympics games on local or national economies.[1] In his 2015 book on large-scale sporting events, Circus Maximus, Andrew Zimbalist notes that the costs of hosting are rarely factored into bid budgets, meaning that the disruption of business, the construction of both sports and non-sports infrastructure, and the indirect costs of overcoming political gridlock often outweigh the more abstract benefits of feel-good nationalism and unity. A 2012 study by the University of Oxford found that every Olympic Games since 1960 has experienced cost overruns; the Rio Olympics are already predicted to have an overrun of $1.6 billion. Los Angeles, which eked out a profit in 1984 thanks to its use of existing venues, is the oft-cited exception that proves the rule. 

If recent Games are any indication, there is also a negligible increase in international prestige as a result of hosting. Most media coverage in the run-up to these large-scale events seems to focus on the negatives—construction delays, cost overruns, and even labor and human rights issues. (See, Athens, Sochi, Beijing, London, and, yes, Rio.) And during the Games themselves, attention is, rightfully, on the athletes themselves. 

Still, a few cities have successfully leveraged the bidding and hosting process to catalyse needed infrastructure improvements, urban redevelopment projects, or other investments that can provide substantial benefits in the long term. In my mind, this is the most significant potential benefit to hosting--If done right, the Olympics can be a galvanizing opportunity not just to attract investment, but also to upheave and replace decaying systems of transport or governance, to increase public participation in urban planning processes, and to accelerate the regeneration of older industrial or underserved areas of a city. 

In the run-up to these Games, boosters including Mayor Eduardo Paes often cited Barcelona as a model for Rio. And, indeed, the ’92 Summer Games there came around at just the right time, as Barcelona’s economy was already emerging from a mid-century malaise that ended along with Franco’s regime, and with just the right plan to convert Olympic investments into long-term gain. The redevelopment of the Poblenou port district in Barcelona didn’t stop with the Olympics; in fact it accelerated after with the creation of the 22@ Innovation District, which now is home to over 4,000 tech-focused companies.

Similarly, London used the 2012 Olympics to undertake a large-scale urban regeneration project, with a focus on long-term economic development in the city’s East End. While still too soon to fully evaluate the lasting impact on the city, the neighborhood has experienced massive amount of public and private investment, the venues have found a second life as well-used public facilities, and there are the beginnings of a tech and creative district centered around Here East. This was a redevelopment project that needed to happen with or without the Games, but as former mayor Ken Livingston put it, the Olympic bid was “the only way to get billions of pounds out of the government to develop the East End.”

It’s worth noting that in both of these cases, the development and infrastructure projects could have been done more cheaply without the requirements of hosting the Games. But cities seem to value the bid as an “action-forcing event” enough to swallow this “Olympic tax.”   

So where does this leave Rio?

First, as our colleagues from the Latin American Initiative at Brookings suggest, it’s important to remember the context in which Rio was bidding to host both the Summer Olympics in 2016 and the World Cup in 2014. Brazil and its second largest city appeared to be on a trajectory of unstoppable ascendancy, even among the competitive BRICs. With a booming economy and a growing international presence, hosting these events seemed like a key step in showing “how Brazil would like to be perceived by the world.”

Yet in the period since their bid was selected, Brazil’s economy has stalled, largely due to a global slowdown in demand for commodities. The national government and the state oil company are embroiled in a wide-ranging corruption scandal that threatens to put President Dilma Rousseff behind bars. The outbreak of the Zika virus has only added to negative publicity, with some prominent athletes citing health risks as one reason to skip the Games.

These national crises have only exacerbated existing challenges for the Rio de Janeiro metro. A recent Brookings publication that included the city in an economic benchmarking analysis placed the city well behind its peers in economic growth, inequality, and education. Most starkly: over the past 15 years, Rio’s economy has experienced zero productivity growth. In this economic and social context, diverting precious public resources towards the Olympics demands a substantial return-on-investment. 

Unfortunately, the economic history of the Games certainly points to a low probability of significant short-term economic surplus, especially in a city that already has a robust tourism industry. Indeed, it’s possible that some higher-value tourism spending could be crowded-out, as some evidence suggests happened in London in 2012. 

The timing of the Games may have also brought international attention to Rio at exactly the wrong time, perhaps even damaging the city’s brand. Hosting the Olympics has turned into a self-imposed crisis of governance, economics and civil society. As Mayor Paes admitted to the Guardian last week, “This is a missed opportunity. We are not showcasing ourselves. With all these economic and political crises, with all these scandals, it is not the best moment to be in the eyes of the world. This is bad.” 

Rio's light-rail system that opened ahead of the 2016 Olympic Games

Much of the weight of Rio’s Olympic legacy will fall on how it was remade physically. Initial reviews are mixed. Transportation and transit infrastructure has been a focus and significant investments have been made: a new light rail line opened just prior to the opening ceremony and extensive new bus rapid transit lines have been inaugurated through the city. There have already been results: the government claims transit use has increased from 18 percent to 63 percent in just the years since the bid, which doesn’t even take into account the just-opened light rail. And while Rio’s project have suffered from similar cost overruns to past hosts, roughly 40 percent of infrastructure spending has come from public-private partnerships, spreading risk beyond the public sector. 

Yet, as my colleague Joe Kane makes clear, for a city that struggles not just from economic but also physical segregation, the Olympic investments have done little to better integrate Rio’s favelas in the north, apart from a new cable car connection to the city center and the broader transit system. BRT extensions into the North Zone has been more criticized for the displacement they’ve cause rather than praised for better integration to the rest of the city. Further, the city’s failure to deliver on promised environmental clean-up in the waters around Rio will leave not just in a spat of embarrassing news stories but also a continuing threat to public health.

Ultimately, cities in pursuit of an Olympic bid should ask themselves, “What problem are we trying to solve?” and make sure they have a good answer. In the case of Barcelona, the bid was a galvanizing event that successfully accelerated existing urban redevelopment plans. In the case of Athens, the attempt to shine on the world stage was a final straw on the path to bankruptcy. In Rio, they’ve made their bet that using the Games to substantially redevelop their transit and transportation infrastructure will be worth the “Olympic tax.” Time will tell if local leaders are right. 

Perhaps the bid itself is one Olympic event where it’s better to come in second. A failed plan can force cities to develop the civic infrastructure and long-term strategy required for a planning committee without having to build excess venues or overspend on logistics and security. 

Manchester, a runner-up for the Summer Olympics in both 1996 and 2000, has undergone significant regeneration along the East side corridor, thanks to extensive light rail and redevelopment projects that went ahead despite the rejection of their bid. These investments ultimately brought the (much smaller-scale) Commonwealth Games to the city in 2002 and, in the end, the process unified stakeholders across the city and metro area, which is now a model for metropolitan governance and autonomy within Britain. 

Similarly, New York City’s failed bid for the 2012 Olympics resulted in a number of transformational changes to the city, including a massive rezoning of the West Side of Manhattan, the construction of a large affordable housing project in Queens on what would have been the site of the Olympic Village, and the development of Hudson Yards.                                                                                     

Clearly there is some value in civic-enabling and long-term economic vision that comes along with an Olympic bid. Done well, it can become the gift that keeps on giving. 

Still, any city thinking about an Olympic bid must clearly and thoughtfully consider the costs and benefits. Or maybe, as Circus Maximus author Zimbalist suggests, the Games should just be in L.A. every year.

__

[1] Billings and Holladay (2012) showed no significant positive effect on trade or openness. Von Rekowsy (2013) demonstrated that mega-events like the Olympics or the World Cup offered no substantive lasting economic benefits. Hotchkiss, Moore, and Zobey (2003) found wage gains, but not employment gains in the 1996 Summer Olympics.

Alison Newman

IT Director / Director Project Management Office / Project Manager, (CSM)

8 年

The Olympics was fantastic! Saw four mosquitoes tops. Transportation easily accessible, security tight and the 2016 Rio Paralympic games began just this week.

回复
A Chia

Executive Director at Oladash

8 年

Different host country have different economic and political back ground, each host country will benefit in different ways but all host countries did the good job of bringing people from different parts of the world together to meet,greet and be shown on the world stage ,as lots of people will be watching the games from different parts of the world! It's best advertisement for tourism,investment and trade, plus the host country will be making friends with more countries which means more business and help from new or existing ones!!

要查看或添加评论,请登录

Bruce Katz的更多文章

  • Stimulus is coming. Let's make its impact inclusive.

    Stimulus is coming. Let's make its impact inclusive.

    by Bruce Katz Despite the shocking national turmoil of the past week, we know that the most important thing that we…

    11 条评论
  • Why the road to economic recovery runs through Main Street

    Why the road to economic recovery runs through Main Street

    The COVID-19 crisis is the greatest economic shock since the Great Depression, and it is landing hardest on the heart…

    55 条评论
  • Remaking US Institutions Post Crisis

    Remaking US Institutions Post Crisis

    By Bruce Katz, Luise Noring and Andrew Petrisin History teaches us that crises lead to institutional transformation…

    3 条评论
  • Needed: A Main Street Emergency Act

    Needed: A Main Street Emergency Act

    Bruce Katz, Rick Jacobs, Jamie Rubin, Michael Saadine and Colin Higgins The COVID-19 crisis is wreaking havoc on Main…

    1 条评论
  • On Billionaires and Trillionaires

    On Billionaires and Trillionaires

    by Bruce Katz and Colin Higgins It’s hard to avoid the topic of billionaires in Democratic politics these days. Senator…

    3 条评论
  • Why Ecosystems Matter: Lessons from Cincinnati

    Why Ecosystems Matter: Lessons from Cincinnati

    by Bruce Katz In my first newsletter this year, The Year of Advancing Community Wealth, I wrote the following, "…we…

    1 条评论
  • The Allure of Mayor Pete

    The Allure of Mayor Pete

    by Bruce Katz On Monday, Iowa gave a significant boost to the candidacy of Pete Buttigieg, the mayor of South Bend…

    4 条评论
  • Climate, Community and Finance

    Climate, Community and Finance

    by Bruce Katz and Colin Higgins In the early days of this year, we’ve both been heartened by the changing behavior of…

    2 条评论
  • The Year of Advancing Community Wealth

    The Year of Advancing Community Wealth

    by Bruce Katz A New Year is a time to plan, which is always a bit daunting for someone like me who likes to dabble…

    11 条评论
  • The West Philadelphia Skills Initiative has become a leading workforce model.

    The West Philadelphia Skills Initiative has become a leading workforce model.

    by Bruce Katz I am thrilled to co-author this newsletter with Megan Humes, a Senior Associate with the Centre for…

    12 条评论

社区洞察

其他会员也浏览了