Sustainable Brazil Social and Economic Impacts of the 2014 World Cup
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Sustainable Brazil Social and Economic Impacts of the 2014 World Cup
Contents Introduction 01 Social and economic impacts 03 • Economy will produce an additional R$ 142 billion 03 • Changes throughout history 05 • Tourist inflow boosts spending 06 • Host cities: the various hearts of the World Cup 07 Domino effect 08 • Direct and indirect socioeconomic impacts 08 • Direct impacts in numbers 09 • The core actions of the operation 13 The map of investments and their impacts on regional GDPs 14 Sustainable World Cup 16 • Social-environmental responsibility at stake 16 Seven steps to the green Cup 18 Microeconomy and social impact 24 • Thousands of microenterprises will benefit 24 Risks and constraints 26 • Steeplechase 26 • What do the host cities need? 26 • Concern with the legacy 29 • The risk of economic inefficiency 30 • The unforeseeable external factors 31 Challenges and opportunities 32 • How to maximize the positive effects of the World Cup? 32 Governance and planning 34 • World Cup Master Plan for each host city 34 Monitoring, control and transparency 36 • Project management focusing on risk analysis, control and monitoring 36 Financial management 38 • BNDES linked to the World Cup 38 Regulatory environment 40 • General Law of the World Cup and organizers’ requirements 40 Infrastructure and services 42 • Success factors 42 Human capital 46 • The Cup will count on thousands of volunteers - mostly bilingual 46 Reputation management 48 • Reputation gain may exceed financial gain 48 Legacy and sustainability 50 • The Cup may leave tangible, institutional and social legacies 50
Introduction
The Sustainable Brazil series, after Accordingly, this study has seven
five publications that analyze objectives, in addition to its
macroeconomic perspectives in the unprecedented aspects:
housing, energy, consumer, industrial
and agribusiness segments, brings into • Estimate the social and economic
light another issue that proves to be impacts of the 2014 World Cup on
strategic not only for its wealth creation Brazil;
and multiplication capacity but also for
the event’s importance and magnitude: • Establish metrics and indicators
the 2014 World Cup. for implementation of the first
sustainable World Cup;
On October 30, 2007, the FIFA Executive
Committee appointed Brazil as host of • Indicate the impact of investments
the tournament. With this, the country on regional GDPs for each host city;
will be the fifth to host the World Cup
twice, after Mexico, Italy, France and • Understand the impacts of the event
Germany. However, the event’s profile on sector GDPs of more than 30 macro
has changed significantly since the and microeconomic segments;
1950 World Cup. In 2014, we will have
a large-sized tournament that will require • Detail the management processes
extensive preparation processes and for the successful outcome
complex operations to be implemented. of a major event;
On the one hand, the World Cup will
bring impacts and benefits – whether • Outline and assess the risks and
temporary or long-lasting, whether direct gaps to achieve of positive impacts
or indirect – to different economic and and minimize negative impacts;
social segments. On the other hand,
it also presents several risks, requiring • Show opportunities and initiatives
effective management processes in the that increase and perpetuate
public and private sectors for the full the benefits of this event for the
flow of benefits to society. Brazilian society. SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
This study results from an association of In order to capture all these “multiplier
Ernst & Young Terco and the Fundação effects”, this study developed an
Getulio Vargas (FGV), and seeks to shed Extended Input-Output model based on
light on a new scenario emerging in the the Input-Output Table of the Brazilian
country with the World Cup which could Geography and Statistics Institute
result in a number of opportunities for (Portuguese acronym - IBGE).
growth if adequately addressed by the
public and private sectors. This model represents the Brazilian
economy by means of 55 economic
The different extents of the socioeconomic activities, 110 product categories and
impacts – for the well-being of the Brazilian 10 income/spending profiles for the
population – will be perceived as a result population, and allows to estimate
of several aspects. These will depend
the total (direct, indirect and induced)
on the country’s ability: to obtain the
impacts of World Cup-related activities
necessary investments and perform
on domestic output, employment,
actions in time for a successful event; to
income, spending and tax collection.
capitalize on the Cup’s legacies, turning
them into permanent assets; and,
The forecasts used in this survey
finally, to reach these objectives in an
were driven, to the extent possible,
economically effective manner, avoiding
by comparable experiences and by the
excessive disbursements and poor allocation
financial planning of public bodies.
of resources or opportunity costs.
The impacts were measured according
The idea is that Brazil gets organized in to specific criteria, such as the difference
such a way that the event lasts not only in expenditures considering scenarios
a few days, but for many years, leaving that include and exclude the World Cup.
a positive legacy for society as a whole. In addition, the costs of all operations
More important than just responding to and acquisitions were regarded as
outside expectations for the World Cup is stable so as to allow them to be summed
the creation of an internal environment at any time until 2014, without the
that allows the infrastructure works use of intertemporal discount rates.
and the impacts on the macro and Possible fluctuations or trends in the
microeconomy to improve the life of macroeconomic landscape were not
Brazilian people. taken into consideration.
Social and
economic impacts
Economy will Cup’s direct impact on the Brazilian
Gross Domestic Product (GDP) is
impacts will not be permanent.
In fact, once the investments have
produce an additional estimated at R$ 64.5 billion for the been concluded and the World
period 2010-2014 – an amount Cup has taken place, the positive
R$ 142 billion equivalent to 2.17% of estimated impacts will remain based on the
GDP for 2010, namely R$ 2.9 trillion. stakeholders’ ability to benefit
The benchmark scenario used in
As the World Cup is a one-time from the event’s opportunities and
this study indicates that the 2014
event, most of its systematic legacies. Therefore, the evaluation
World Cup will produce a surprising
cascading effect on investments
made in the country. The economy Consolidated impacts of the 2014 World Cup
will snowball, increasing by five
times the total amount invested
directly in event-related activities a) Impact on final demand
and impacting various industries. (World Cup-related expenditures in Brazil) R$ 29.60 billion
In addition to the R$ 22.46 billion • Investments R$ 22.46 billion
spent by Brazil on the World Cup to • Operating expenses R$ 1.18 billion
ensure an adequate infrastructure • Visitors’ expenses R$ 5.94 billion
and organization (see box on this b) Impact on national production of goods and services R$ 112.79 billion
page), the tournament will bring an
c) Impact on income (generated by item a) R$ 63.48 billion
additional R$112.79 billion to the
d) Impact on employment (jobs/year – generated by item a) 3.63 million
Brazilian economy, with indirect
e) Impact on tax collection R$ 18.13 billion
and induced effects being produced
thereafter. In total, an additional
R$ 142.39 billion will flow in
the country from 2010 to 2014,
generating 3.63 million jobs/year Sectors most benefiting
(economic activities with major
and R$ 63.48 billion of income for increased output)
the population, which will inevitably
impact the domestic consumer
market, as shown in the table on
page 6.
This production will also result in
Civil Food and Business Electricity and Information Tourism &
an additional tax collection of R$ construction beverage services gas, water, services hospitality
18.13 billion by the local, state and sanitation and
urban cleaning
federal governments. The World
Table 1 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
in the first part of this study is 2014 will depend on an accurate by R$ 50.18 billion.
limited to the period 2010-2014. schedule of implementation of Second to none on the list
construction work and efforts. of benefiting segments, civil
Thus, the job creation estimated construction will generate an
by the study primarily refers to The sectors mostly benefiting additional R$ 8.14 billion in the
temporary jobs only. The estimated from the World Cup will be period 2010-2014. Total output
3.63 million jobs/year correspond, construction, food and beverage, from this segment for 2010 is
as far as compensation is business services, utilities estimated at R$ 144.6 billion.
concerned, to 3.63 million positions (electricity, gas, water, sanitation Other economic segments that will
to be held for one year. The exact and urban cleaning) and take advantage of the World Cup
distribution of this number information services. Together, all are, for example, business services
of jobs/year over the period 2010- these areas will increase output and real estate services and rental,
Direct and indirect impact on Brazilian sector GDPs Direct impact
In millions of BRL (R$) Indirect impact
Construction
Business services
Real estate services and rental
Other services (condominiums, unions, NGOs etc.)
Retail
Financial brokerage and insurance
Electricity and gas, water, sanitation and urban cleaning
Information services
Transportation, warehousing and courier services
Lodging and restaurants (hospitality)
Food and beverage
Agriculture, forestry and logging
Clothing and accessories
Marketing education
Livestock and fisheries TOTAL
Oil and natural gas 15.317 57.217 41.900
Pharmaceuticals 24
Public administration and social security sectors
Cosmetics and toiletries
Maintenance and repair services
Other non-metallic mineral products
Newspapers, magazines and CDs
Furniture and sundry products
Metal goods – incl. machinery and equipment
0 2,000 4,000 6,000 8,000 10,000
Table 2 GDP base year - 2010The Cup should generate 3.63 million jobs/year
and R$ 63.48 billion income for the population in
the period 2010-2014, besides an additional
R$ 18.13 billion in tax collections.
with the former generating an and an estimated 26.29 billion TV Many of the structures required
additional R$ 6.5 billion and the viewing audience. for the World Cup should be ready
latter an additional R$ 4.4 billion for the Confederations Cup, when
over the period. The 2014 Worl Cup is likely to tests will be run for the arenas,
have an even greater audience the various International Media
Of the total R$ 29.6 billion in and viewers, but will follow similar Centers (IMC) and the International
estimated costs relating to the structural and organization Broadcasting Center (IBC). The
World Cup (including visitors’ standards to those adopted by hospitality and transportation
expenses), R$ 12.5 billion will Germany and by South Africa in infrastructure should be almost
originate in the public (government) 2010. Additionally, this is not an completed by then.
sector (42%) and R$ 17.16 billion isolated event, being preceded
will derive from the private and accompanied by many others, For the World Cup mega event to
sector (58%). mainly the Confederations Cup, take place, the country will have to
held one year earlier.
take giant steps, despite the tight
Changes throughout The Confederations Cup is the first
schedule for completion of already
planned construction work – as will
history major event to be held in Brazil
be seen in this study.
just before the World Cup and will
Brazil has experienced many therefore be a litmus test to check
The positive effects of hosting one
changes since the first time it if all preparations are running
of the world’s major sports events
hosted the World Cup in 1950. on schedule and following the
may last forever and multiply,
The size of the event was specs defined by the International
as we will see. Once all the steps
unquestionably different. Football Federation (Fifa).
and requirements established by
At that time, the tournament
This significant event – although Fifa are complied with, and Brazil
had 13 teams playing 22 games
in six arenas, with an estimated not as important as the World Cup builds up its image as a country
1.04 million audience. – brings eight teams playing that can seriously organize an
16 games in 16 to 22 days. international tournament, we will
The 2006 event, held in Germany, The tournament attracts a be reaching another socioeconomic
had 32 teams playing 64 matches smaller audience, consistent and structural level. After going
in 12 stadiums, and attracted with its advertising efforts and through some stages and achieving
3.35 million viewers, having historical importance. The flow solid macroeconomic core
generated 18 million visits to of international tourists to this principles, the country approaches
the Fan Parks (large areas of free tournament, for instance, is its desired status of being the
public entertainment and recreation expected to be less than one quarter world’s fifth largest economy in
that did not exist in the 1950s) of that expected at the World Cup. the very near future. SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Tourist inflow by the World Cup are completed, Tourist inflow entails a significant
the event may result in an inflow of funds, notably to the
boosts spending increase of up to 79% in the hospitality, transportation,
international tourist inflow communications, culture,
One of the aspects that most to Brazil in 2014, with even entertainment and retail industries.
attract a country to host a World
possibly higher impacts in The tourist inflow directly and
Cup is the tourist inflow generated
subsequent years. In the period indirectly induced by the World
by such an event– not only directly,
2010-2014, that figure should Cup is expected to account for
with fans who will watch the games,
be as high as 2.98 million additional income up to R$ 5.94
but also indirectly, as a result of
additional visitors. billion for Brazilian companies.
the international media exposure.
However, this opportunity for
growth in the tourism industry Visitors’ spending
In millions of BRL (R$)
should be exploited through various
lines of action, among which
the most important in Brazil is 2,126.52
Hospitality
removing bottlenecks. Regarding
this specific issue, we must bear 902.88
Meals
in mind that, except for isolated
initiatives, the growing visibility of
Purchase 831.60
the country on the international
scene over the last decade has not
528.66
been adequately leveraged by the Transport
private and public sectors to fully
exploit the potential of Brazilian Culture 516.78
and leisure
tourism. This fact is evident in the
declining quality of airports, as well 273.24
Communications
as the stagnant number of tourists
in recent years. Other 760.32
(medical and legal
services etc.)
This study indicates that, once
the actions that are required 0 500 1,000 1,500 2,000 2,500
to enable the country to capitalize Table 3
on the opportunities generated
R$ 14.54 billion investments
in host cities should impact their
local GDP by R$ 7.18 billion.
Host cities: be received by the host cities with
larger-capacity stadiums and better
the various hearts general conditions.
of the World Cup
These cities will be targeted with
infrastructure initiatives that will
There is great anticipation about
add up to total investments of R$
the adequate preparation of the
14.54 billion (see investment map
host cities for the event. Many have
for each host city and the related
wondered whether they will be fully
impact on city GDPs on pages 14
compliant with the requirements
and 15). On reurbanization and
imposed by Fifa when it comes to
beautification alone, focusing
the infrastructure of stadiums,
on locations with greater tourist
urban mobility, hospitality and
inflow and the immediate area
safety, especially. These aspects
around the stadiums, expenses are
will be the basis for the success of
estimated at R$ 2.84 billion. The
the 2014 World Cup and its legacy
structure required for holding the
not only from the standpoint of World Cup and associated events
the event itself but also of regional is far-reaching, including not only
tourism conditions. the stadiums, which must meet the
specifications defined by Fifa, but also
As for the number of stadiums the information technology base in
and participating cities, the each host city, the media centers
Cup will have 12 host cities (IMC) and the match broadcasting
distributed among the five greater center (IBC), as well as the facilities
geographical regions of the of the Fan Parks. But that’s
country, which differ significantly not all. There are also several
in terms of infrastructure, capacity other aspects regarding local
and adequacy of stadiums and infrastructure that must satisfy
geographical features. some criteria for the event to be
feasible, including hotel compounds
In this context, the matches with and access to the various means
higher expected audience – such of transportation that can serve
as the opening match and those the intense movement of people
played at the second stage – must associated with the Cup.10 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Domino effect
Direct and indirect cities (with investments still to be
defined) and of the security teams
spending. Thus, the production
increase in those sectors directly
socioeconomic in charge; and related to the World Cup requires
impacts • Spending by visitors: purchase
them to consume a larger amount
of inputs (e.g. the construction
of goods and services by tourists industry will require more beams,
The scenario of impacts arising
directly or indirectly attracted produced by the steel industry).
from the World Cup does not result
by the World Cup.
from individual factors, but from
The producers of these inputs,
a set of interconnected aspects.
These three groups of activities in turn, must increase their own
The domino effect of direct actions
represent a source of demand intermediate spending (steel
can be clearly seen as a series
for goods and services and thus manufacturers need to consume
of economic, social and cultural
positively affect the economic more electricity), and so on. It can
developments – some of which, if
sectors that should meet this be noted therefore that the World
well used, can be made part of a
demand. These benefits – increased Cup generates a long chain of
society on a long-term basis. For production, employment, income economic consequences, which are
better clarification and for the and tax collection – are construed referred to collectively as indirect
purposes of this study, three sets of as direct impacts in this context. impacts.
actions or activities relating to the For example, building a stadium
World Cup were analyzed: represents increased production Income effect - There is another
by the construction sector, and similar channel of interconnections
• Investments: capital formation this increase is reflected in among sectors that generates a
activities aimed at the World Cup, hiring personnel and subsequent chain of impacts that takes after
including those which would be distribution of income – derived and is linked to the first chain.
performed in any case but with from production – to employees, That is the household spending:
smaller financial contributions shareholders and governments. compensation paid to employees
and projects or over a longer and shareholders in each sector
period of time, e.g. construction However, the impacts of actions translates, in full or in part, into the
or renovation of stadiums, associated with the World Cup acquisition of goods and services,
expansion of the hotel compound, extend further. This is due to so that an increase in production
investments in transportation the interconnected nature of the causes an increase in consumption
infrastructure etc.; economy: for an entity to produce, of such goods and services. For
inputs (whether tangible goods, example, the wages of a worker
• Operation of the event: such as equipment or building involved in building a stadium can
preparation and management, by materials, or services, such as contribute to the purchase of a
the Local Organizing Committee electricity, insurance etc.) must be new car, representing an increased
(LOC), of the event, of the obtained from other sectors. demand for the automotive
specific committees in the host This is the so-called intermediate industry and so on.The domino effect of direct actions 11
can be clearly seen as a series
of economic, social and cultural
developments.
The set of consequences generated capitalizing on legacies, and for the
by the household spending channel economic efficiency of activities,
is referred to as induced impact, or minimizing, to the extent possible,
income effect. the opportunity costs, and excess,
unnecessary or misdirected
In order to capture all these expenditures, which will be
“multiplier effects”, this study, a analyzed in the second part of
joint effort by Ernst & Young Terco the study.
and FGV, developed an Extended
Input-Output model based on the Once the three types of World Cup
Input-Output Table of the Brazilian - related actions have been defined
Geography and Statistics Institute as well as their related impacts,
(Portuguese acronym- IBGE). classified as direct, indirect and
This model represents the Brazilian induced impacts, we will now
economy by means of 55 economic detail them and estimate them
activities, 110 product categories in numbers.
and 10 income/spending profiles
for the population, and allows to Direct impacts
estimate the total (direct, indirect
and induced) impacts of World in numbers
Cup-related activities on domestic
output, employment, income, The period of preparation for
spending and tax collection. the World Cup involves, as
already mentioned, a series of
The input-output analysis plays an investments in infrastructure
important role in a more general projects, construction and building
framework. It allows estimating the works, human capital formation,
systematic socioeconomic impacts capital expenditures and media
of a well defined set of activities and advertising. Part of these
and actions, considering that such investments will be supported by
activities will be conducted under the government and part will be
assumed parameters. funded by the private sector and
institutions associated with the
Thus, it should include other World Cup.
aspects: an assessment of
conditions for the successful This study reviewed the following
completion of the event, for types of investments:12 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
• Building and renovation of demand. In the other cities, the in media are estimated at some
sports stadiums: various host expected number of tourists R$ 6.51 billion on account of the
cities do not have stadiums exceeds their current hosting event in Brazil, conducted mainly
capable of holding international capacity, resulting in a total by the private sector and mostly
competition matches. Even those projected deficit of 62,397. concentrated in the year 2014.
stadiums that are among Brazil’s hotel rooms. The challenge to
most suitable do not currently overcome this deficit will require • Investments in information
meet all accessibility, safety, the industry to expand and adjust technology: in 32 days, the
comfort, lighting, structure and its capacity, which will demand 2006 World Cup in Germany
services requirements defined by significant investments. generated the production and
Fifa. In Natal, Recife and Salvador traffic of about 15 terabytes of
new stadiums will be built. Projected investments, totaling data, equivalent to 100 million
Stadiums in the other host cities some R$ 3.16 billion, will add books. This traffic has demanded
will be renovated for purposes 19,493 new housing units the implementation and operation
of adapting to the requirements. to the hotel complex of the of an extensive IT infrastructure
This item represents the main host cities. Note that this with the participation of
individual cost component of the projection is not sufficient over 1,000 professionals.
2014 World Cup, amounting to to fully meet the demand, The increased participation
R$ 4.62 billion. The proposed indicating that alternative types of professional media and
works are extensive and may cost of accommodation will likely be connectivity of amateur users, as
the host cities the opportunity used, such as seasonal rental well as the continuous increase
to host some matches if they are of property, accommodation in in digital image and video format
not performed in accordance with neighboring towns, or even the solutions, are indicators that the
Fifa’s requirements. use of idling cruise ships, as the 2014 World Cup will further boost
case was with the 2004 Olympic these figures. It is estimated that
• Expansion and adequacy of the Games in Athens. investments of R$ 309 million will
hotel complex: the World Cup be required to accommodate the
will generate an increasing • Investments in media and large flow of data and processing
demand for hotel complexes of advertising: similarly to previous capacity associated with
the host cities, not only due to Cups, the 2014 World Cup will the event.
the event itself, but also to the result in a large appreciation of
hike in tourist inflow caused media space (including television, • Implementation of media and
by the country’s increased radio, internet, physical space broadcasting centers (IMCs
international exposure as a and others). For instance, the and IBC): international
tourist destination. However, of World Cup in Germany boasted broadcasting and media centers
all the host cities, only Rio de a 5.1% growth in sales by the are essential for the running
Janeiro, São Paulo and Curitiba country’s advertising industry of the World Cup. International
are better prepared to meet this in 2006. Similarly, investments Media Centers (IMCs) are locatedInvestments in media and advertising, 13
totaling some R$ 6.51 billion, are
made primarily by the private sector
and mostly concentrated in 2014.
World Cup investments
In millions of BRL (R$)
Airports
1,213.74
Information
Reurbanization Safety Highways Technology
2,837.30 1,697.38 1,441.02 309.00
Hotel IMCs
Media Stadiums Complex
3,163.93 and IBC
6,510.00 4,624.45
184.50
Energy Fan Parks
280.52 203.83
Table 4
in each host city and transmit • Public investments in transport investments of R$ 1.21 billion
information on events to the infrastructure: the long distance will be made. In addition, it will
International Broadcast Center between Brazilian cities and be necessary to intervene in
(IBC). This operates as a core the expected increase in tourist 4,334 km of highways, including
center from which information inflow will force the public reconstruction, maintenance
is sent to other countries. The sector to invest in the expansion and expansion works. These
IBC is a much more complex of airport capacity and in the works will require R$ 1.44 billion
center than the various IMCs and maintenance or renovation of in addition to the investments
requires its own specific place to highways. Throughout June already planned without the Cup.
operate, whereas the IMCs may and July 2014, the World Cup
be located inside the stadiums will generate an additional flow • Reurbanization of cities:
that will host the matches. The of 2.25 million passengers at as in previous competitions, the
IBC implementation will require Brazilian airports. This flow 2014 World Cup will represent
investments of R$ 184 million. corresponds to 11.8% of an an opportunity to revitalize
The implementation costs of average monthly demand on the tourist areas of the host
IMCs, however, are included in the aviation system in 2009. cities (totaling 379 km²), the
the stadium adaptation projects. To meet this increased demand, surroundings of their airports14 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Highway intervention works
In Km 1.70 billion will be required in
security infrastructure (vehicles
799 and aircraft, communications and
Reconstruction
technology systems), training,
1,368
weaponry and other essential
Renovation/
Maintenance expenditures.
Expansion 2,167 • Setting up of Fan Parks,
large parks or outdoor areas
turned into recreational and
0 500 1,000 1,500 2,000 2,500 public integration facilities:
Table 5 introduced at the World Cup in
Germany, these parks will be set
up in 12 host cities, featuring
(132 km²) and their stadiums Although some candidate entertainment activities, sale
(0.6 km²). These locations will cities face challenges involving of food and drinks, parties,
be targeted with initiatives such urban violence, the lessons big screens to broadcast live
as: street lighting; paving of learned from the 1992 Earth matches and stages for concerts
sidewalks and roads; renovation Summit and the Rio 2007 Pan between matches. With free
of street furniture; adaptation American Games shows that this admission, the 2006 Fan Parks
of urban spaces to meet the objective can be fully achieved, had many visitors, busy schedule
needs of persons with disabilities; provided that the necessary and excellent response from the
construction of recreational investments are made. Recent participants. At the German Cup,
areas; and embellishment experience shows that spending while the attendance figures
in general. In total, these on training and equipment tends reached 3.4 million people, the
initiatives represent an estimated to reduce the response time of Fan Parks attracted 18 million
investment of R$ 2.84 billion. police action and contributes visitors. Investments to establish
to reducing violence even after Fan Parks are estimated at R$
• Investments public security: the competition, an important 204 million, including physical
in an event of major proportions legacy of the event. To ensure infrastructure, cleaning, security
and visibility as the World Cup, a tournament with a high level and other services, in addition to
ensuring safety is essential. of security, investments of R$ entertainment activities.To revitalize the host cities tourism areas 15
as well the surrounding airport and
stadium areas, investments of R$ 2.84 billion
will be required.
entirely the responsibility of Fifa
Expenses on the operation of the event and will be R$ 854 million.
In millions of BRL (R$)
• Security operations: these
refer to the costing of the actual
LOC* number of police officers – up
854.00 to 78,000 people – required to
carry out security operations for
the event in the host cities. It is
estimated that the cost of this
security force (including payroll,
travel costs and other variables)
will total R$ 327 million.
• Electrical redundancy
operation: in order to ensure the
Safety quality of the event, Fifa imposes
327.00 a number of requirements
regarding the infrastructure
of venue cities and of facilities
Table 6 *Local Organizing Committee selected to stage World Cup
events. As regards electrical
infrastructure, the main item
The core actions of • Operations of the Local
Organizing Committee: the LOC
refers to the need for electrical
redundancy between cities.
the operation is responsible for managing the It can be noted, for example, that
tournament’s organization and the host city of Manaus has no
For the event to actually occur for covering its operating costs. redundant transmission lines.
under the standards required by
These expenses include travel It is assumed that this city
Fifa, an organizing committee
costs of the teams, delegations operates the existing thermal
is formed and accountable
and officials; committee’s power plants using the new
for overseeing and ensuring
compliance with the construction personnel costs and management transmission line as a backup.
work schedule. The three major fees; advertising and other The operating cost of these
core actions of the event are expenses. The funds required thermal plants in Manaus is
as follows: to cover all these expenses are estimated at R$ 280 million.16 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
The map of
INVESTMENTS AND THEIR
TOTAL In millions of BRL (R$)
7,181.3 Impact on GDP
City 2010 GDP
1,050,325.5
(0.7%) Direct Impact (% of 2010 GDP)
439.0
32,490.3
(1.4%)
Fortaleza
Castelão
Manaus
Natal
Vivaldão
Cidade das Dunas 758.6
10,650.7
Recife (7.1%)
Cidade Copa
Salvador
Brasília Fonte Nova
Estádio Nacional 378.7
664.5 27,504.1
45,672.3 (1.4%)
(1.5%)
597.3 Cuiabá
10,489.1 Belo Horizonte*
Verdão
(5.7%) Mineirão 625.7
35,481.4
São Paulo (1.8%)
Morumbi Rio de Janeiro
Maracanã
606.9
132,681.9
Curitiba
Status (0.5%)
Arena da 717.4
of stadiums Baixada 50,724.6
(1.4%)
Renovation
343.2 Porto Alegre
Construction 50,169.3 Beira-Rio
(0.7%)
723.3 987.4
339.3 424,806.0 185,270.8
(0.5%)
44,385.0 (0.2%)
* Not yet defined if Mineirão.
Independência or Arena do Jacaré, (0.8%)17
IMPACTS ON REGIONAL GDPs
Allocation of investments Rio with more funds
In millions of BRL (R$) In millions of BRL (R$)
Stadiums 4,624.50 Belo Horizonte 1,435.1
Hotel Brasília 1,219.0
3,163.93
complex
Cuiabá 1,212.9
Reurbanization 2,847.30
Investments
Curitiba 720.2
Safety 1,697.40
Fortaleza 890.6
Airports 1,213.70 Manaus 1,357.5
Natal 1,499.6
Fan Parks 204.00
Porto Alegre 724.6
IBC 184.50
Recife 779.8
Security 327.00
Expenses
Rio de Janeiro 1,973.2
Energy 280.52 Salvador 1,263.9
Total: 14,542.00 São Paulo 1,455.0
0 1,000 2,000 3,000 4,000 5,000 0 500 1,000 1,500 2,000
Higher airport activity Target 2014
Million passengers per year
Current capacity Other Word Cup
114.6 38.7 13.518 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Sustainable World Cup
Social-environmental An event such as the World Cup,
which has the provision of services
Carbon footprint - Since the
German World Cup, Fifa has been
responsibility at as one of its central pillars, cannot developing “The Green Goal”, an
stake ignore its responsibilities in relation
to these issues.
official program aimed, among
other aspects, at reducing CO2
emissions. It focuses on four
The analysis of socioeconomic
The socio-environmental aspect aspects: water, waste, energy and
impacts cannot be dissociated
permeates all of its activities. transport. The carbon footprint of
from the environment in a mega For example, in directly performing the 2010 World Cup is estimated
event such as the World Cup, or subcontracting services, it is at 896,661 tonnes of carbon, with
which often serves as a mirror important to identify criteria that an additional 1,856,589 tonnes
for future actions. Ensuring ensure workers’ health and safety, contributed by air transport, as
performance for sustainable working conditions, payment of shown in the table on the opposite
development in this type of global rights and benefits, quality of life,
page. The carbon footprint
tournament means contributing strengthened learning systems as
measures how much carbon
to a decrease in social and well as post-event employment and
dioxide is produced by all activities
environmental costs, and in sustainability.
(transport, electricity, etc.) carried
inefficiencies and waste, as well
out by an individual, a company,
as contributing to a greater social In relation to the public, it is
an event – these activities normally
integration and to the continued essential to ensure urban quality,
use fossil fuels such as oil, gas
development of individuals, accessibility, security, access
and coal.
communities and relationships to information, environmental
between the society and education and usefulness of
The term ‘carbon footprint’ refers
facilities, as well as urban
the environment. to another expression, ‘ecological
interventions after the event.
The government agencies and footprint’, which indicates the
According to the criteria adopted amount of natural resources
private entities involved with the
by the United Nations Environment required to support a given
World Cup should be required
Program (UNEP), the economic, population. The carbon footprint of
to ensure the responsible use of
social and environmental natural and economic resources, the 2010 World Cup in South Africa
dimensions must be integrated and responsible sourcing of should be eight times larger than
to meet the challenges of six acquired raw materials, products in the 2006 World Cup in Germany,
priority areas: climate change, and services. The goal is to reduce excluding air travel.
disasters and conflicts, ecosystem carbon dioxide (CO2) emissions
management, environmental from burning fossil fuels, as this As shown in the table 7,
governance, harmful substances is one of the major causes of the international travel by plane
and efficient use of natural resources. greenhouse effect. corresponds to 67% of the carbonThe socio-environmental aspect permeates all of
19
the World Cup-related activities, from stadiums built
based on the “green building” criteria to the impact
of air travel on determining the “carbon footprint”.
Summary carbon footprint for the 2010 World Cup
Emissions
Component (tCO2e) Emissions
International transport 1,856,589 67.4%
Intercity transport 484,961 17.6%
Intracity transport 39,577 1.4%
Building of stadiums and materials 15,359 0.6%
Stadiums and additional energy use 16,637 0.5%
Use of energy in accommodations 340,128 12.4%
Total excluding international transport 896,661
Total including international transport 2,753,250 100%
Table 7
footprint, since most visitors should - environmental responsibility. responsibility of states and areas
use this means of transport to Performance indicators can defined as priorities by Fifa for the
arrive in South Africa. Based on be defined as benchmarks or German Cup. The following is the
Brazil’s location and its continental values derived from benchmarks
first attempt of a preliminary set
size, CO2 emissions will certainly based on standards designed
of quantitative indicators identified
compare to these results in the to meet an environmental and
2014 World Cup. social responsibility program. in accordance with predetermined
The standards consist of principles, standards of environmental
The performance measurement for criteria, targets, indicators responsibility of the priority states
the sustainable development of a and verifiers. and areas of the Green Goal,
country, state, city or community
considering the Brazilian reality.
requires the definition of a set of The standard to be established by
This set of indicators should be
indicators that should be proposed states and organizations involved
in accordance with pre-selected in implementing the 2014 World evaluated and tested according to
and defined performance criteria, Cup can be based on the scope the dynamics of each state and/
based on compliance with socio of environmental and social or organization.20 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
SEVEN STEPS
to the green Cup
1Energy conservation and
climate change
Principle:How to minimize the
2
Water
Principle:How to promote water conservation
through reduced use
carbon footprint
CRITERIA INDICATORS CRITERIA INDICATORS
Calculation of the carbon Amount of carbon Technologies for
footprint for the 2010 Cup. dioxide generated. water reuse in several
Measurement
environments: stadiums,
Implementation Measurement of reduction of water saved.
quarters, hotels and
of carbon offsetting. in CO2 emissions. tourist locations.
Energy efficient Measurement of energy Alternative sources to Measurement
technologies. reduced in one year. meet irrigation needs. of water saved.21
3
Integrated waste management
Principle: How to reduce, reuse and recycle
waste supported by landfill scavengers,
4
Transport, mobility and access
Principle:How to attain energy efficiency,
using universal accessible means of transport
including them in the management process that minimize pollution
CRITERIA INDICATORS CRITERIA INDICATORS
Selective waste collection Measurement of waste for
program at stadiums, selective collection per class and Km of bike paths built.
quarters etc. type of waste. Infrastructure for cyclists
and pedestrians.
Environmental education Number of bike path users.
Number of people trained
program focused on
to be multipliers.
selective collection. Type of public
Number of people covered by the transport implemented.
environmental education program. Public transport Assessment of vehicle
with reduced pollutant black smoke.
Number of landfill scavengers emissions.
Master plan on solid included in the process.
Amount equivalent
waste including landfill to reduced carbon.
scavengers should be Number of processing facilities set
prepared. up under shared management with
Number of eco-taxis in
landfill scavengers associations.
the urban fleet.
Share of recyclable waste Eco-taxis.
allocated to landfill scavengers Amount equivalent to
in relation to total waste. reduced carbon.
Number of landfill scavengers and
organizations covered by the plan.
Plan on landfill Number and type of training
scavengers’ sustainability offered to landfill scavengers.
after the World Cup.
Number of associations/
cooperatives that could implement
a business plan.22 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
5Landscape and biodiversity
Principle: How to preserve biodiversity by promoting
natural landscape
6
Green buildings
and sustainable lifestyles
Principle:How to promote awareness
and sustainable lifestyle
CRITERIA INDICATORS CRITERIA INDICATORS
Number of ecological parks
Number of employees trained. implemented.
Landscape training Area
Ecological park
to promote Type of training offered. (in square meters or hectares).
and smart living center.
natural landscapes.
Number of hours invested Number of parks that survived
in training. for one year.
Number of showcases Positive evaluation of ECC quality
implemented. and effectiveness (more than
Biodiversity showcases. 50% of users).
Public access to showcases. Number of course
Environmental Education materials produced.
Number of registered participants Campaign (EEC).
per age group. Number of people covered.
Students contest
for the garden around Number of projects implemented. Number of people trained
the soccer field. as multipliers.
Number of projects sustained one
year after implementation.
Number of planted trees and
Environmental education community embellishment efforts.
program focused
on city embellishment. Number of course materials
produced.23
7
Sustainable construction
Principle:How to ensure sustainable construction
in construction and building processes
CRITERIA INDICATORS AND VERIFIERS
Amount of reduced CO2 emissions – both in
construction and operation of buildings.
Amount of tap water saved.
Amount of segregated waste sent under
a selective collection system.
Internationally recognized Certification
for projects and construction Types of raw materials that had their
of sustainable stadiums and quarters responsible source evaluated.
(Leed, Acqua, Breeam etc.).
Positive result from the Labeling process –
Procel label.
Health and safety program implemented.
Frequency and severity
of work-related accidents.
Amount of reduced CO2 emissions – both in
construction and operation of buildings.
Amount of tap water saved.
Sustainable construction criteria to be met
by infrastructure construction works. Amount of raw materials that had their
responsible source checked.
Amount of energy saved by implementing
a solar power program for public lighting.24 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Environmental and social currently one of the alternatives
responsibility - Meeting the – and perhaps the most advertised
performance defined based on – to reduce carbon dioxide
this set of principles, criteria and emissions in the atmosphere. But
indicators requires considering the it takes a systemic view that allows
impacts on implementation costs of integrating emission reduction
programs and public policies and (which includes applying eco
of processes and their products. - efficient solutions, rational use
If, on the one hand, there is a cost of natural resources, assessing
for organizations that undertake the companies’ energy matrix, etc.)
to comply with their social and and emission offsetting.
environmental responsibility, on
the other hand there are social and For a sustainable project
environmental benefits; stronger management, goals, indicators
learning systems; contribution to and action plans should be
the good reputation of companies outlined. One of the actions that
and organizations (public and may be planned for each of these
private); and opportunities for steps is, for example, the carbon
investment in the carbon market. footprint offsetting program, which
encourages the use of vehicles
Carbon offsetting - Adopting the that run on ethanol or biodiesel,
criteria for developing carbon the search for energy efficiency
offset projects should be integrated of companies, “green building”
with actions and programs that projects and monitoring of carbon
go beyond planting trees, which is emissions before, during and afterEncouraging the use of ethanol or biodiesel25
vehicles and searching for energy
efficiency are some of the actions aimed
at offsetting the carbon footprint.
events. Another example is the air involve waste management, Research Establishment
quality management, which may based on the three Rs (reduce, Environmental Assessment
include building more bicycle paths reuse, recycle), water and sewer Method), in turn, created in the
that provide access to major event management, focusing on reducing U.K., is being introduced in the
sites, for example. the use, and also the policy on Brazilian market.
engagements: contracts should
The “green building” concept may prioritize suppliers that adopt ISO 14001, the standards that
be applied to the construction of sustainable management principles set guidelines for corporate
stadiums and hotels. For example, for their services and products. environmental management,
the structural materials to be used
have been gradually adopted
should not be harmful to health and Certifications – There are
by real estate developers,
the environment, should originate several certification criteria
especially after the ISO
from sustainable sources and that ensure “green buildings”.
9000 culture grew stronger.
prioritize energy consumption; the Projects and construction of
Conversely, large organizations
technologies used should reduce stadiums and quarters may receive
and/or institutions, which aim
water consumption and promote an internationally recognized
water reuse; energy consumption certification (Leed, Acqua, Breeam, to perform their construction
should be minimized (with etc.). In Brazil, two environmental processes with environmental
intelligent refrigeration, lighting certifications focusing on and social responsibility, tend to
and ventilation systems) and waste construction (project and building internally develop customized
should be managed in both the process) are currently used: Acqua, and personalized certification
construction and operation phases. created in France, already adapted standards. In this case, it is
for Brazil; and Leed (Leadership in necessary to recognize the
Reduce, reuse and recycle - Energy and Environmental Design), essential involvement of an
The sustainable measures also a U.S. certification. Bream (Building outside auditing agent.26 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Microeconomy
and social impact
Thousands of thousands) of micro and small
enterprises and services that will
microenterprises certainly be greatly boosted. Besides
will benefit the direct and indirect impacts on
economic sectors already mentioned
In addition to the impact on the on page 4 here in, there are at least
macroeconomy discussed so far, 11 other sectors including a large
the World Cup also impacts a number of small, medium and large-
multitude of hundreds (even sized companies that will be directly
World Cup’s impact on 11 economic sectors
Total GDP Sector GDP
per sector growth due Total impact Direct impact Indirect impact
Sector (R$ million) to the Cup (R$ million) (R$ million) (R$ million)
Textile 18,604.99 3.12% 580.47 0.07 580.40
Parts and accessories
23,416.56 2% 469.23 3.87 465.36
for motor vehicles
Household appliances 4,193.7 10.24% 429.40 0.11 429.28
Electrical machinery, devices and materials 15,922.79 2.41% 384.20 42.78 341.42
Machinery and equipment,
31,675.18 0.84% 267.64 1.24 266.39
including maintenance and repair
Wooden products – including furniture 11,182.77 2.32% 259.97 0.38 259.59
Leather goods and footwear 9,305.75 2.61% 242.70 0.16 242.54
Medical, hospital, measurement and
9,641.35 1.36% 131.44 0.60 130.83
optical devices/instruments
Other transport equipment 9,494.36 0.86% 81.92 48.37 33.54
Trucks and buses 3,331.29 1.43% 47.62 37.41 10.21
Office machines
3,380.72 0.12% 3.95 0.21 3.74
and computer equipment
These sectors includes small, medium and big companies. GDP base year – 2010
Table 9Chain reaction effects arising from 27
the World Cup stimulate and encourage
social benefits such as: increase in income
and decrease in violence and crime.
affected by the World Cup, as shown • Potentially reduced violence and
in the table below. crime as a result of investments
in security;
Social effect - Another indirect
impact scenario involves the social • Social benefits from investments
effects and chain reaction arising in infrastructure; and
from World Cup-related activities.
• The microeconomic impacts
The impacts mentioned so far of the construction and
can be classified as systematic improvement of stadiums
as they refer to expected and a whole new window of
variations in the aggregate
opportunities that is created
behavior of economic sectors.
around them because of the
For this generality and predictability,
mega event.
these impacts are susceptible
to quantitative estimates.
By their very nature, the specific
impacts are not captured in
What this study refers to as specific
models that describe the economic
impacts are those that are particular
relationships between agents and
to the microeconomic or social
characteristics of the event and the institutions from a purely monetary
people affected by it. These include, and aggregate perspective, thus
among others: removing them from the scope of
the input-output methods used.
• The Volunteering Program In fact, given the complexity of
impacts on the people’s the interaction networks involved,
education and income; it is often hard to find adequate
quantitative models that reliably
• The country’s exposure in the describe these phenomena, with
world media and consequential qualitative analysis and case studies
effects on tourism; prevailing in such cases.28 SUSTAINABLE BRAZIL Social and Economic Impacts of the 2014 World Cup
Risks and
constraints
Steeplechase planning and control may result • Hospitality system
in excessive or unnecessary
expenditures, misallocation or • Safety
For the people to fully benefit
misappropriation of funds, and
from the various socioeconomic
failure to use opportunity costs. • Urban planning (public utility
opportunities brought by an event
services, urban operations,
such as the World Cup, certain
• External factors: in addition to quality of city streets, public
constraints or risk factors must be
the risk factors directly associated transportation, operations
taken into account, as follows:
with the Cup itself, there are under adverse conditions)
• Meeting the needs of host several external constraints, at
national and international levels, • Support services (food,
cities: a successful event
taxi, communications, health
depends on the ability to meet the that are beyond the stakeholders’
and retail)
diverse needs of the host cities intervention capacity, but can
by 2014, by means of actions and bring significant risks to the
The above list indicates a range
investments in public and private process of preparing and holding
between “large” and “small” needs.
sectors. Some of these needs the Cup.
require Cup-specific actions, while In general, these needs can be
others can be met in the context What do the host satisfied by means of “top-down”
of broader actions and activities. or “bottom-up” public policies or
cities need? actions. Each of these categories
• Capitalizing on the legacy: gives rise to various weaknesses
preparing and holding the Cup The 12 cities hosting the World
and failures, as seen below.
will give rise to various tangible Cup have different needs that must However, the risks are the same:
and intangible legacies. These be satisfied for a successful event. that such actions and policies
legacies could bring well-being These needs can be summarized in result in inefficient and costly
to the population in a timeframe the following categories: interventions or fail to meet the
extending far beyond the event needs in question.
itself. But for that to happen they • Energy
must be well used by the country. Brazil has a long tradition of
• Arterial transport (highways, vertical town planning, where
• Economic efficiency: the World airports etc.) decisions are taken by central
Cup implementation activities governments and spread out to
and the use of legacy should • Event infrastructure (stadiums, local organization points. Often
be efficient. Lack of adequate IBC/IMCs, Fan Parks) there is little local autonomy, littleRecent events in Rio de Janeiro and São Paulo
29
show that the host cities have to improve
planning aspects to prevent the matches from
being held together with urban chaos.
being, therefore, subject to the
Types of needs systemic risk of institutional
failure that may impact
Systematic Individual critical aspects of the event.
Common among the various cities Specific to each city The “small” needs, on the
other hand, present difficulties
Relating to federal and state Relating to city or private sector of central planning, but can be
responsibilities responsibilities
remedied by private or public
Table 10 actions of each host city, as
long as autonomy, initiative and
resources are in place.
feedback on the effectiveness and takeover of public administration
efficiency of decisions, and little at various levels, which represents
In general, failing to meet, in
control over the alignment a significant obstacle to the
full or in part, the needs of venue
of agents responsible for implementation of bottom-up
cities may result in:
the stipulated policies. public policies. In fact, incipient
These characteristics can attempts, in cities such as Rio de
be identified not only in the Janeiro, to develop urban solutions • Poor quality of services
relationship between the federal through subdivisions of the local provided to visitors and
government and the other government (the subprefeituras) to the population;
federal entities, but also at or similar arrangements collide
state and municipal levels. not only with coordination • Bottleneck effect (limited
problems, “political will”, lack of number of visitors due to
Therefore, the need for any “top resources and inflexibility of the price increases or capacity
down” public policy or intervention legal instruments, but also with exhaustion);
introduces an institutional risk to the very difficulty of articulating
the extent that, due to the flaws in the peoples of each community in • Economic and human losses
the decision-making process, such terms of shared responsibilities and (caused by accidents,
interventions can be incorrect or needs. commotions, or other negative
unnecessarily costly, or simply not impacts from the inflow
materialize. Systemic risk - Considering these of visitors);
aspects, it should be noted that
As regards the difficulties of the “large” needs of the host cities • Presentation of a negative
central planning, one can note are subject to central planning and image of Brazil in the
the crystallization and political direct government intervention, international media coverage.You can also read
