IOC SOCIOECONOMIC IMPACT OF OLYMPICS PAGE 1. IOC International Olympic Committee Socioeconomic Impact of Hosting the Olympic Games

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1 IOC SOCIOECONOMIC IMPACT OF OLYMPICS PAGE 1 BACKGROUND PAPER: IOC International Olympic Committee Socioeconomic Impact of Hosting the Olympic Games INTRODUCTION: Brazil has been and will be under the spotlight of the International media. The recent publicity regarding the 2014 FIFA World Cup and the upcoming 2016 Summer Olympics in Rio de Janeiro has put Brazil's economic preparations and actions under scrutiny. The nation has faced issues dealing with budget allocation and financial planning as well as several thousands of Brazilians being forcibly displaced from their homes. The IOC must analyze the current situation and update the Olympic Charter in order to prevent socioeconomic instability for future games. CURRENT STATUS/BACKGROUND: Brazil has undergone dramatic socioeconomic changes in the last decade. After falling into a brief recession, and quickly recovering, Brazil soon became one the 10 largest economies internationally. In light of the nation's progress they were chosen to host both the World Cup and the Olympics. Brazil set a budget for $13.3 billion for the Rio Olympics, much of which was intended to be spent on public works projects in the surrounding areas. Brazil's population was explicitly told that money spent on venues would be funded privately, while all infrastructure projects would be

2 IOC SOCIOECONOMIC IMPACT OF OLYMPICS PAGE 2 government expenditures. The Brazilian Government however has strayed far from this promise and has spent a large majority of the budget on constructing stadiums. Citizens have already begun protesting against the unlawful allocation of funds. The Olympic games are not the economic revitalization project the Brazilian Government lead its people to believe it was, but merely a high profile social event. The games are projected to provide only temporary jobs and a brief spike in tourism, which will mainly benefit the wealthy. Major projects like the Trans Olympic Highway in Brazil are the root of more problems other than just being extremely costly. Major construction like the highway is causing the displacement of thousands of Brazilians. Majority of those forcibly moved are residents of favelas, or slums. These citizens are either not well educated enough to legally challenge the government regarding their displacement or aren't financially capable. The preparations for the 2014 World Cup already removed 170,000 Brazilians from their homes and it is projected that another 30,000 people will be evicted due to Olympic related construction. The Olympic Charter already calls for a certain amount of financial planning in order to apply for candidature to host the games. Obviously the rules and bye laws presented are not adequate in keeping the host governments on track. BLOC POSITIONS: Host countries are greatly affected by the economic and social spotlight they receive from international media. By analyzing the preparation and planning process of famous host cities, the IOC can gain a better understanding regarding changes that may need to be made in the Olympic Charter.

3 IOC SOCIOECONOMIC IMPACT OF OLYMPICS PAGE 3 One of the most economically unsuccessful Olympic Games was in Athens, Greece in After spending $15 billion ($9 billion over budget), Greece was left with 21 vacant Olympic venues and an exorbitant amount of debt. After 8 years Greece finally went bankrupt. It was obvious that the lack of financial discipline during the Olympic Games was a major factor in the debt crisis. Greece poured money into both public works projects and venues. Unfortunately the development of roads and airports was not enough to counteract the amount of capital lost. Probably the most expensive and most corrupt Olympic Games is the 2014 Winter Olympics in Sochi, Russia with a total expenditure of $50 billion. The first financial red flag was the location. Sochi has a subtropical climate and building venues to hold winter sports in those weather conditions was a costly and strenuous process. Many venues had to be built and rebuilt to accommodate for the weather. Secondly, all public works were negligently constructed, surrounding bodies of water were polluted, newly built sewage pipes burst, and local villages were torn apart for industrial usage. These environmental oversights destroyed homes and villages, forcing 2,000 individuals to relocate and left many without a reliable source of water or transportation. With such unsuccessful public works projects and practically useless venues, there is almost no chance that Russia will be able to recover their $50 billion. The country guiltiest of displacing their citizen for the Olympics is China. The 2008 Summer Olympics in Beijing forced a total of 1.25 million people to move out of their homes. None of the evicted citizens were properly compensated, and protesters were beaten and jailed. China rejected any pleas against the human rights violations and continued with the games.

4 IOC SOCIOECONOMIC IMPACT OF OLYMPICS PAGE 4 The 1992 Summer Olympics in Barcelona was one of the most rationally and successfully planned games. The city was totally transformed to accommodate for the games in a way that the changes would benefit Spain years after the games had ended. A cosmetic upgrade of the coastline, enhanced railway and airport systems, and new roads and sewage systems provided a total of 20,000 permanent jobs in Barcelona. The Olympic Venues still host concerts and events even today and Spain continues to generate income from the Olympics they hosted 20 years ago. COMITTEE MISSION: The purpose of this committee is to make amendments to the Olympic charter. These amendments should ensure that the host country will not encounter the financial instability caused by inadequate allocation of funds and political misinterpretation. The charter should also establish an explicit set of regulations regarding the displacement of civilians and human rights violations. The primary goal of the IOC is to target the pressing issues in Brazil's preparation for the upcoming Olympic Games, and codify the charter to prevent such obstacles from taking place in the future. The Committee can also consider the increased or decreased role of NOCs and IFs in the financial planning in the Olympic games. The NOCs are an important voice in the groundwork of the games and their involvement is a crucial aspect in the effectiveness of the host country. QUESTIONS TO CONSIDER: 1.) Has your nation hosted the Olympics before? If so, how have the games financially impacted your economy? 2.) If your nation is looking to host the games in the future, what kind

5 IOC SOCIOECONOMIC IMPACT OF OLYMPICS PAGE 5 Amendments regarding finances would help your country to reach that goal? 3.) Would hosting the Olympic Games be a danger to your country's citizens? How can the people negatively affected by the games be properly compensated? What measures in the planning stage should be taken to avoid this situation all together? SOURCES: Olympic Charter Huffington Post New York Times Al Jazeera studies/financing ethics and the braz ilian olympics the social cost of brazil hosti ng world cup brazil rio.html

Learning from experience: How hosting the Olympics can leave a positive legacy

F E B R U A R Y 2 0 17 Learning from experience: How hosting the Olympics can leave a positive legacy Bill Hanway Careful planning and an eye on the future can help the cities that host them. Deciding