Brazil to embark on spending spree

SAO PAULO - Brazil urgently needs to find new investment and to streamline its bulky bureaucracy as it prepares to host the world's two biggest sporting events: the 2016 Olympics and 2014 soccer World Cup, according to analysts.

SAO PAULO - Brazil urgently needs to find new investment and to streamline its bulky bureaucracy as it prepares to host the world's two biggest sporting events: the 2016 Olympics and 2014 soccer World Cup, according to analysts.

After Rio de Janeiro was chosen as the host of the 2016 Olympiad, the government promised new investment in a slew of new projects.

But before it even starts preparing for the Olympics, the country will have to remodel and build new stadiums in 12 cities for the 2014 World Cup.

To organise both events, the country will have to spend between R131,6billion and R223,6billion, according to Professor Francisco Carlos of the Foundation Institute of Economic Research.

But newspaper O Globo said on Saturday that the current budget for the Olympics alone stands at R120billion.

Initially, according to Carlos, Brazil will have "to make enormous investment in its infrastructure because the country does not have an adequate infrastructure to host both sporting events".

Brazil will need to improve and develop land and air transport systems, increase the availability of hotel rooms and bolster its telecommunications network to meet growing demand.

"This will stimulate the country's economy," Carlos said.

Most of these investments will have to come from the government, which will be dramatically affected by the programme.

The government spends one percent of its annual budget on infrastructure improvements. But with the two major events on the horizon, "the government will have to raise its public debt level to an extreme", the professor warned.

The Brazilian government's public debt stood at about R5056billion in August, which equals 44percent of gross domestic product.

Another significant danger facing Brazil is its lack of forward-looking management.

"Brazil does not have a tradition for such management," said Marilson Alves Goncalves, professor of management at the University of Sao Paulo.

"In this country, people improvise."

Alves said the government in Brazil has always operated "reactively rather than proactively".

"Because of this, the dream of the World Cup and the Olympics is essential to allow Brazil to develop a strategy," said the professor. - Sapa-AFP

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