Hope fades in Brazil for a WC economic boost

For many Brazilians, the Brazil World Cup has become a symbol of the unfulfilled promise of an economic boom for this South American nation. But the boom has fizzled. And now the World Cup's $11.5 billion price tag-the most expensive ever-and a list of unfinished construction projects have become reminders of the shortcomings that many believe keep Brazil poor: overwhelming bureaucracy, corruption and shortsighted policy-making that prioritises grand projects over needs like education and health care.
"It's an affront, in a country with so many deficiencies in basic needs, to organise a Cup in this way," said Alcyr Leme, a São Paulo investment manager and lifelong soccer fan.
Across Brazil, $3.6 billion in taxpayer money has been poured into stadiums, as much as the stadium bill for the past two Cups combined, and builders are still racing to finish. Meantime, work on airports, roads and other long term projects promised to benefit development in Brazil became hampered by bureaucratic squabbles, allegations of corruption and other obstacles. With days to go, the stadiums are mostly built, but the areas around them often resemble construction sites.
In Natal, where the U.S. plays its first game, workers were hiding unfinished access ramps to the local stadium with coverings depicting beach scenes as a last-ditch cosmetic fix. The small northeastern city's politics became embroiled in debates over alleged contracting irregularities as it fell behind on promised roads and other structures.
In Fortaleza, another poor northeastern city hosting six games, builders finished the Castelão stadium for $230 million. But fans arriving at Fortaleza's airport will find a giant tent rather than a new planned terminal. Federal prosecutors are looking into whether corruption played a role in the failure of the $78 million terminal expansion project. Not far away, a planned light-rail to alleviate traffic is an unfinished stretch of rubble. It hit financial trouble and disputes over land ownership.
"The country of soccer is reacting to the waste, the unfinished infrastructure projects, the allegations of corruption, the poor quality of schools and hospitals, the poor use of resources," said Mailson da Nóbrega, a former Finance Minister of Brazil who now runs the Tendências economic think tank in São Paulo.
Harder to muzzle are critics, which even include Brazilian soccer stars who became disillusioned after acting as official Cup ambassadors, such as Ronaldo, a two-time Cup winner and its all-time leading scorer, and Romário, a star on the Brazil team that won the 1994 Cup. Now a congressman, Romário has publicly called it "the biggest heist in the history of Brazil."
The government argues projects such as airports will eventually be finished and provide long-term benefits. Brazil estimates the Cup will generate some 380,000 jobs and attract 600,000 foreign tourists. The event is forecast to inject some $11.1 billion in advertising, airlines, hotels and other spending in the economy. But the jobs are largely temporary and, Moody's Investors Service predicts, the impact on Brazil's $2.2 trillion economy will be small.
After decades of crashes, Brazil had a growing economy based on a steady currency. A new consumer class was rising among Brazil's poor. And with commodity prices rising, Brazil made some of the world's biggest oil finds off Rio de Janeiro. Brazil's stock market surged 44% in 2007. Rio was also awarded the Olympics two years later.
Initially, Brazil's government said it would find private funding for the stadiums, and set aside taxpayer funds for projects that would provide a long-term boost to the economy. The most important of these would be improved public transportation in a country where some big cities have no subway and workers take multihour rides on muggy buses.
In the end, stadiums were built almost exclusively with taxpayer money as their costs quadrupled and private lenders questioned stadiums' future profitability.
A few major transportation projects were completed. The signature project was to be a $16 billion bullet train between Rio and São Paulo. Latin America's first high-speed bullet train would be running by the World Cup and be complete by the Olympics, a then-cabinet chief Ms. Rousseff said in 2009. The project was to be the foundation of a new state train company that could spread fast trains throughout Brazil.
The city's plans for a monorail, meanwhile, never got off the drawing board. Federal prosecutors found so many budget irregularities that a judge shut the project down.
The 12-city Cup was a boon to Brazilian construction companies such as Andrade Gutierrez and Odebrecht SA, which built many of the stadiums. But even Odebrecht Chief Executive Marcelo Odebrecht has said Brazil would have been better off with just eight host cities. "The legacy of the World Cup on infrastructure was much less than expected," Mr. Odebrecht said.- Internet