Fall 2013, Latin America, World — January 6, 2014 at 4:34 pm

Corrupting the Cup

How FIFA Exploits Emerging Economies

by
facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

CPR_Drawing_1

The Fédération Internationale de Football Association (FIFA) is committed to ensuring that its member associations maximize the benefits of bidding for and hosting the World Cup, both for the continued global development of soccer and the achievement of wider social goals. These benefits are usually referred to, in the context of a major event, as its ‘legacy’: “The sustainable benefits generated for the host member association and country – well before, during and long after the event.”

In Brasília on June 15 2013, after years of struggling to recover the famed jogo bonito (“beautiful play”) of old, the Brazilian national team finally managed a convincing display and comfortably dispatched Japan 2-nil to kick off the Confederations Cup, the tournament that serves as a test run for the next year’s World Cup. The highlight of the day, however, was nowhere to be found on the match reel. Earlier, Brazilian President Dilma Rousseff came to the microphone to formally open the competition, only for the crowd to respond with enthusiastic boos and jeers, uncomfortably echoing the growing nationwide tension and protests outside the stadium. FIFA President Sepp Blatter improvised an attempt to defend his new pal by comically demanding of the crowd, “Where is your respect, where [sic] is your fair play, please?” His naïveté was duly rewarded with even louder protests. Dilma thundered a single sentence over the crowd and shuffled away from the spotlight to let the soccer take over.

Blatter, however, would soon find himself in good company: Pelé, soccer’s greatest legend, pleaded with fans to spare the national team their ire and to avoid protesting until after the World Cup. Another former great, Ronaldo, a member of the World Cup Local Organizing Committee, sparked outrage because of a quote pulled from a 2011 interview that circulated online: “World Cups aren’t held with hospitals.” Although the sentence was taken out of context, he nevertheless defended himself by pointing out that the World Cup itself was destined to generate investment in social priorities, and that protesters were merely using it as an easy target for Brazil’s perpetual problems. However well-meaning, such positive views of the 2014 World Cup are deliberately ignorant of the serious issues plaguing Brazil’s World Cup preparations, and to see the World Cup as an alternative to a depressing political scenario is a form of twisted escapism at best. These misguided stances reflect the emergence of a woefully misguided acceptance of the World Cup “development” model peddled by FIFA.

If FIFA is to be believed, the argument for hosting the World Cup rests on the claims of lasting socioeconomic benefits in the form of significant urban infrastructure development and sport’s potential for social engagement. The former is often touted in Brazil, where investments in public transportation, security, urban renovation, hotels, and airports are needed to accommodate the hordes of affluent tourists converging for the football bonanza. Arguments in favor of the bid expounded on visions of modern, seated stadiums, renovated airports, and modern transportation projects including a bullet train between Rio de Janeiro and São Paulo.

But in addition to these tangible benefits, the FIFA World Cup has recently adopted a kind of geopolitical rhetoric. To confirm this, one simply needs to look at the most recently selected hosts: South Africa, Brazil, Russia, and Qatar. All have been touted as emerging economies, and the chance to successfully host the World Cup has been advertised as a great positive, showing newfound economic status (anyone remember Shakira’s theme song for the South African World Cup?). FIFA, meanwhile, stands to gain from the continued expansion of the game and from tapping into the vast potential of more remote markets in undeveloped regions.

FIFA and national soccer executives certainly seem keen to believe this: Putin claimed that aiding developing countries was part of FIFA’s “philosophy” (he also rejected claims of FIFA corruption), and Sepp Blatter himself emphasized the importance of bringing the World Cup to new regions after awarding the World Cup to Russia and Qatar. Inevitably, this lopsided focus comes at the expense of selecting stable, prepared countries: both Russia and Qatar performed badly in the full FIFA evaluations leaked to the press. And while Russia does have a tradition in the game, Qatar has yet to qualify for a World Cup – its influence on the soccer world is for the moment limited to the growing power of Qatari investors off the pitch in European soccer. Yet despite this, the country was selected over another outsider, Australia, a more developed country with better qualifications and a blossoming soccer scene (the Socceroos have qualified for their third World Cup in a row).

Obviously, though Brazil has one of the richest traditions in soccer history, its selection as a host was predicated on similar terms, facilitated by a continental rotation system for World Cup hosts. The mechanism was implemented after 2000, when Germany narrowly beat out South Africa for the right to host the 2006 World Cup. A tie would have allowed Sepp Blatter to cast a winning vote for South Africa; but an Oceania executive abstained from voting, citing the applied pressure of the many “gifts” sent from both sides. After instating the rotation policy, Africa and South America were selected as the next host continents, all but guaranteeing the selection of South Africa for the 2010 event. But when the time came to vote for South America’s host, Brazil was the only country in the running for final six months of the process after the other two bids desisted. Not surprisingly, the system was dropped soon thereafter.

But despite the flawed bidding process, politicians and soccer executives sang a tune of Brazil’s recognition on the World stage. The booming economy had managed to stay afloat during the 2008 financial crisis, and Rio de Janeiro’s victorious bid for the 2016 Olympics a year later only seemed to confirm the validity of their hyperbole. Politicians swore that public funds would remain out of stadiums and under strict control, and that infrastructure projects would be finished by the World Cup. In 2011, the Ministry of Sports calculated a total growth of $70 billion thanks to the World Cup, and even as recently as last month, the Brazilian Institute of Tourism estimated total profits of $10.5 billion, almost twenty times the $513 million made by South Africa in 2010. But alas, recent estimates have put the total cost of the World Cup at a whopping R$28.1 billion (about $14 billion), and of this total, only R$5.6 billion (about $2.8 billion) are private investments. Of the R$7.5 billion (about $3.3 billion) invested in stadiums, a paltry R$820 million (about $410 million) originated from private funds.

Where did this debacle come from? Since Brazil’s victory in the bidding process was certain from the start, the submitted World Cup project had not even selected the host cities, let alone the infrastructure projects to be implemented. Delays in the public auctioning of World Cup projects went on for years, until special legislation was passed in order to deliver the promised preparations on time. The virtues of economic growth and modernization previously so central to the World Cup project are now merely a “generous objective”. Only four out of 53 urban projects have been completed, and many of the more ambitious subway and monorail projects were dropped early on. To complicate matters further, the Brazilian senate passed a resolution in March to allow unfinished World Cup projects to postpone completion until after the World Cup, while maintaining the laxer financial regulations and bidding processes that were installed to ensure the completion of these postponed projects. Naturally, corruption runs amok. To name a few, prosecutors recently discovered evidence of fraud and overpricing in the bidding process of the Cuiabá Light-Rail Vehicle, and seats for Cuiabá’s Pantanal stadium were recently revealed to have been purchased at the cost of 150% of the regular price.

Eventually, Brazil’s 0rganizing committee settled for a total of twelve host cities – three more than South Africa. Spread throughout Brazil to include the entire country, the choices nevertheless reflect a criminal disregard for the landscape of Brazilian soccer. Only four first division teams are located outside the south and southeastern regions, and one of these is located in Goiânia, which is not a host city. Even if we were to take into account the tradition clubs of the north, the inclusion of Cuiabá, Manaus, and Brasília remains downright outrageous, since none host clubs with any tradition or large following within Brazil’s game. High-quality stadiums costing hundreds of millions of dollars are being spent on cities without clubs to use them – although a politician in Manaus wisely suggested that the stadium be repurposed as a staging area for convicts after the World Cup. And of course, long delays and worker strikes have plagued the construction from the start, resulting in rushed timelines and embarrassing lapses in organization, such as when a court blocked a Brazil-England friendly a day before the match when the Maracana stadium failed to secure all the necessary permits for hosting the event (a judge from another government organ overturned the decision).

Naturally, the less than perfect execution of the World Cup preparations has strained the relationships between the Brazilian government and the Confederação Brasileira de Futebol (CBF), Brazil’s soccer federation. Changes in leadership, ironically, have not helped. Former FIFA President João Havelange and CBF President Ricardo Teixeira, the two top Brazilian soccer executives, were both toppled by accusations of bribery, leaving CBF Vice-President Josè Maria Marin to take the reins (although Teixeira continued to receive his $100,000 salary for several months after he resigned). Marin, however, is a politician with close ties to the old military dictatorship, a permanent stain on his record, and an excuse for President Rousseff to loathe and avoid him. In retribution, Marin prevented the victorious national team from visiting the by dismissing them immediately after the final match. It all seems petty and trifling, but the lack of friendly relations between the top-brass of the two organizations most involved in the World Cup speaks volumes.

CPR_Drawing_2

How has FIFA reacted to all of this in? In March 2012, Jérôme Valcke suggested that Brazil needed “a kick up the ass” after witnessing the astonishing lack of progress just two years before the main event, which spurred an injection of R$ 857.3 million into the stadiums. But in general, these obstacles matter little to FIFA, since their business model depends almost exclusively on sponsorship, marketing, and televising deals without paying billions for infrastructure. In addition, FIFA requests a number of changes to the host country’s commerce laws and an exemption from federal taxes, which guarantees most of the revenue pie for itself (one estimate claims that the exemption will cost Brazil close to R$ 1 billion).

FIFA’s exigencies regarding commercial laws are, likewise, controversial. One of these, for example, permits the establishment of “exclusive zones,” areas with a maximum range of two kilometers around a stadium where FIFA and partners have exclusive rights to the advertisement and sale of licensed products and services. Other hotly contested measures include the lifting of a ban on alcohol within stadiums to accommodate FIFA’s beer sponsor, Budweiser, a clause e s t a b l i s h ing the federal government’s civil liability to FIFA in case of accidents or damages, and even a change in school calendars to align the World Cup with students’ vacation. Much more sinister than any of these, however, is the recent approval of a Russian law that would allow FIFA and its multinational partners to set working conditions for migrant laborers outside the framework of regular Russian law.

FIFA’s understanding of fair play, it seems, is not that of following the rules, but in simply making convenient ones whenever the organization stands to gain from doing so. Simply put, taking the World Cup to developing economies with accommodating governments makes it far easier for FIFA to operate and profit without drawing attention to the fragility of its promises and the inherent unfairness of its model. FIFA Secretary Valcke even went as far as to admit that organizing tournaments in less democratic countries was far easier than navigating Brazil’s dysfunctional bureaucracy. To back up his colleague, Blatter then spoke of his experience organizing the Argentinian 1978 World Cup, and his vision of the home side’s victory as a “kind of reconciliation of the public, of the people of Argentina, with … the military system at the time”.

It is perhaps for this reason that the use of the Confederations Cup as a focal point for Brazilian protests was so unexpected. That Brazilians, so often stereotyped as soccer-crazed, would actually use the World Cup as a symbol of their discontent is a threat to the package of bliss FIFA portrays the World Cup as. It is little surprise that Blatter would later stress that protests were solely related to Brazilian society’s internal problems – the (correct) association of the World Cup with the impunity of corruption and the squandering of public resources is perhaps the most potent recent challenge faced by FIFA, which anticipates more protests during the main event.

At the root of FIFA’s denial of responsibilities is an unwillingness to draw attention to its own uncomfortable connections to political problems and human rights violations in host countries that could be avoided by pursuing a more stable World Cup selection policy focused on a country’s prior facilities and credentials. It seems that if FIFA has no incentive to pursue a more sustainable model, then the onus is on governments, fans, and even players to demand an economically sustainable World Cup with the responsible allocation of public funds.

facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>