As one of the authors of this article arrived in Sao Paulo on June 5, metro workers carried out a paralyzing strike. Sometimes these protests have been violent and have often blamed the government for hosting the 2014 World Cup instead of focusing on social services. Yet, as we see in Figure 1 below, the government has never spent as much on social welfare as in the past decade.
One can see from Figure 1 that the two social program areas with the highest levels of expenditure by the federal government in 2010 were health and education ($30.3 billion and $20 billion respectively). The total social program expenditures in 2010 in the four areas analyzed reached $84.3 billion (the overall social program spending by the Brazilian government in the same year was $280.9 billion).
At the same time, as we can see in Figure 2 below, the Brazilian unemployment rate reached its lowest level last year according to the analysis we carried out (for the period 1995-2014).
Moreover, poverty has been reduced very significantly since 2003 (the year that Luis Inácio Lula da Silva of the Workers’ Party became president). There is a downward trend in both general poverty and extreme poverty rates in Brazil, with the lowest rates in the last year considered in this study (15.96 and 5.3 percent respectively).
Much has been made in the protests about the supposedly high levels of government spending on the World Cup at a time when there is a need for social program expenditures. However, the actual amount spent by the Brazilian government on the World Cup, especially on stadiums, is very small relative to the total amount of social program costs. Figure 4 shows a breakdown of the World Cup investments by the government.
Total investments in the 2014 FIFA World Cup by the Brazilian government amounts to $11.2 billion. According to official data, these investments were provided by federal, state and municipal governments, as well as private entities. Also, according to public official information, the Brazilian federal government spent $1.76 billion specifically on the construction of stadiums.
Now let’s look at social program expenditures in the same period. Between 2010 (the year that the investments on the World Cup and for the construction of stadia began) and the beginning of 2014, the Brazilian federal government invested $363 billion in health and education (the two social sectors that receive the greatest amount of investment by the government).
So, comparing expenditures on the World Cup and investments by the federal government on health and education, we can see that the former represents only 3 percent of the total of the latter two expenditures (the total of all forms social spending is $385.4 billion). Protestors claim that the government is spending too much on stadiums while neglecting health and education. Perhaps, but stadiums are only about 0.5 percent of the total amount invested in these two social sectors in the past four years.
We must also recall that the federal investment in stadiums (as we mentioned, $1.76 billion) was done via BNDES, the Brazilian Development Bank and reflects only a small percentage of the total invested by the bank in 2010, which was $260 billion. Additionally, revenue from the 2013 FIFA Confederations Cup amounted to $3.88 billion, according to a study by the Institute of Economic Research Foundation (FIPE-USP). Revenue expected from this World Cup are estimated at $12 billion according to the same study.
The protestors’ ire is understandable given inequality and poverty in Brazil. Perhaps any spending on items such as soccer stadiums is too much in that context. Yet, it may also be that the protests are less about these expenditures per se than that they use the World Cup as an opportunity to draw attention to problems that have little to do with soccer’s main tournament.
Despite significant progress over the past decades, and according to a United Nations report released in 2012, Brazil has one of the highest levels of income inequality in the world. The country is considered the fourth most unequal nation in Latin America in terms of income distribution. This high inequality, as well as anger at corruption (both of which predate the World Cup), ought to be the main targets of the protests, not the global soccer event. Income disparities and graft are probably the root reasons why protests are taking place.
The protestors are likely taking advantage of a high-visibility event to attract media attention to Brazil’s perennial structural problems. Another contributing factor may be Brazilians’ perception of FIFA as imposing and arrogant. The core problems of a contracting economy and rising inflation, which are not dependent on the World Cup, are the real source of the wrath of those marching in the streets of cities like Rio and Sao Paulo.
Thiago Silva is a doctoral student in the political science department at Texas A&M University and has a master’s degree in political science from the University of Sao Paulo, Brazil. His research interests include democratization processes, along with comparative legislative and economic voting in developing democracies.
Diego von Vacano is associate professor of political science at Texas A&M. He is a political theorist, also interested in Latin American politics. He is currently doing research on the Brazil World Cup 2014 and on immigrants in Sao Paulo. He is the author of “The Art of Power and The Color of Citizenship.”
Note: A few minor corrections were made after publications.
“Perhaps, but stadiums are only about 0.4 percent of the total amount invested…” was corrected to “Perhaps, but stadiums are only about 0.5 of the total amount invested…” This was also corrected in figure 5.
” with the lowest rates in the last year considered in this study (5.96 and 5.3 percent respectively).” was corrected to “” with the lowest rates in the last year considered in this study (15.96 and 5.3 percent respectively).”
“Between 2010 […] the Brazilian federal government invested $374 billion in health and education (the two social sectors that receive the greatest amount of investment by the government).”. The correct is: ” […] the Brazilian federal government invested $363 billion in health and education.