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Brazil Hopes to Score Win In Its World Cup Gamble


Also See: Brazil Beefs Up Security Ahead of World Cup

When the 2014 FIFA World Cup officially kicks off June 12 at São Paulo’s futuristic Corinthians Arena, the eyes and TV screens of the world will be glued to Brazil, whose national soccer team plays Croatia in the opening match.

It’s a moment Brazil’s top envoy in Washington, Mauro Vieira, has been eagerly awaiting for years.

“This is the largest sporting event we have ever hosted,” said the ambassador, estimating that 1 million tourists, including nearly 150,000 Americans, will flock to Brazil for the World Cup. “We’ve been playing soccer for at least a century, and ever since Pelé in the 1950s, our players have become national heroes. Over 2.5 billion people follow soccer. The World Cup now attracts even more attention than the Olympics” — whose 2016 Summer Games Brazil will be hosting as well.

The month-long World Cup tournament — which consists of 64 matches to be played across a dozen cities from Rio de Janeiro to Recife — marks the second time Brazil has hosted the World Cup. The only other time was in 1950, and Uruguay won (though Brazil did snare the championship on five other occasions).

“This will allow us to showcase all the diversity Brazil has to offer,” Vieira told The Washington Diplomat in an hour-long interview at his residence on Massachusetts Avenue. “Brazil is a melting pot. We are very happy people. Sports and music are part of our identity, and I think it’s the right moment and the right occasion to celebrate.”

Yet millions of Brazilians won’t be celebrating. The estimated $11.5 billon Brazil is spending on the games has infuriated people throughout a country that’s struggling with a stagnant economy, violent crime, high taxes and inadequate public services. Widespread media reports of fraudulent billing, kickbacks and outright bribery bring to mind the Russian corruption scandals associated with the Sochi Winter Olympics earlier this year (also see “Russia Puts Its Olympic Dreams, Reputation on the Line at Sochi” in the February 2014 issue of The Diplomat).

FIFA, i.e. the Fédération Internationale de Football Association — itself a frequent target of critics who say many of its officials are deeply corrupt — has made no secret of its view that Brazil could have done a better job preparing for the games, which return to South America for the first time since 1978.

Jérôme Valcke, secretary-general of FIFA, told reporters the angry protests that sent hundreds of thousands of Brazilians into the streets last June during the Confederations Cup qualifier would likely return for the World Cup, even though political demonstrations and banners won’t be allowed inside the stadiums.

“Reasons for being in the streets in 2013 have not changed,” the French official said at a May 9 press briefing, referring to protester complaints such as dismal public transportation services. “There are social problems in Brazil. It will take time.”

São Paulo’s Corinthians Arena, which has been expanded to accommodate 65,000 spectators (including 14,000 heads of state, dignitaries, journalists and other invited guests), is emblematic of such criticism. The $425 million stadium is expensive, late and within sight of a makeshift tent city set up by protesters who claim they’ve been made homeless by the neighborhood’s rising rents.

Even worse is the Mane Garrincha stadium in Brasília, whose construction cost has nearly tripled to $900 million in public funds, making it the world’s second-most expensive soccer arena — even though the capital city has no major professional team. Auditors allege that as much as one-third of that $900 million consists of fraudulent billing. An Associated Press analysis of data published in mid-May revealed “skyrocketing campaign contributions by the very companies involved in the most Cup projects.”

“These donations are making corruption in this country … increasingly difficult to fight. These politicians are working for those who financed campaigns,” Renato Rainha, an arbiter at Brasília’s Audit Court, told AP. Added Gil Castelo Branco, founder of the watchdog group Open Accounts: “Is there corruption in the Cup? Of course, without a doubt. Corruption goes where the money is, and in Brazil today, the big money is tied up in the Cup.”

Complicating matters, more than a dozen workers have so far died in accidents during the building of Brazil’s 12 World Cup arenas. And this is nothing compared to the chaotic efforts being expended to ready Rio for the 2016 Summer Olympics, which will cost untold tens of billions of dollars.

In late April, International Olympics Committee Vice President John Coates raised eyebrows when — following six official visits to Rio — he said that preparations for the 2016 Games were “the worst I have ever experienced.” He added that Rio was even more unprepared than Athens, where strikes and infrastructure delays nearly cost the Greek capital the 2004 Olympics.

“There’s a sense that the World Cup is a major test for Brazil,” said Michael Shifter, president of the Inter-American Dialogue, a Washington think tank. “Under normal circumstances, this would be a time of great joy and celebration. Instead, there’s a sour mood, because the country is facing lots of economic problems, corruption and concerns about the quality of public services. There seems to be a perception among many Brazilians that the government’s priorities are misplaced. They wonder why so much money is being spent on these Potemkin villages when basic needs are not being met.”

The barrage of negative headlines is a stark reversal of fortune for Brazil, an emerging nation of 200 million whose economy blossomed under former President Luiz Inácio Lula da Silva — lifting tens of millions of Brazilians out of poverty — but has since cooled under Lula’s successor, Dilma Rousseff.

After a spate of economic growth that peaked in 2010 at 7.5 percent, Brazil’s economy slowed to 2.7 percent in 2011 and 1 percent in 2012. The growth rate for 2013 is expected to be about 2.5 percent,” wrote Tim Ridout of the German Marshall Fund in a Feb. 19 analysis. “These disappointing numbers can be attributed partly to the drop in global commodity prices, but also to Brazil’s protectionist policies, poor infrastructure, unwieldy bureaucratic red tape, and its statist approach to investment. The Brazilian economy has not proven nimble enough to adjust to changing global realities, especially as investment flows back to the United States,” the scholar argued. 

Brazilians initially basked in the glow of securing the rights to host both the World Cup and Olympics as a sign of their growing international clout, but now both events are exposing the structural weaknesses of the country’s two-decade-long economic boom.

“For a long time, Brazil had a wave of extraordinarily positive press, and now the coverage has changed dramatically,” Shifter told us. “Brazil has swung from one point to the other. Its economy grew over 7 percent in 2010, and the last couple of years have been very sluggish. President Rousseff looked like she was in a very strong position to be re-elected in October. She’s still the favorite to win, but this is by no means assured.”

Christopher Sabatini, senior director of policy at the Americas Society/Council of the Americas, told us that “in the end, they’ll pull off” the World Cup, despite the setbacks that have plagued it ever since Lula, the country’s immensely popular, charismatic former president, announced triumphantly on Oct. 30, 2007, that FIFA had officially awarded Brazil the 2014 games.

“The real question is, will this be Brazil’s moment to shine as Lula promoted it? Even a relatively smooth World Cup will not bring enough benefits and may actually bring frustrations,” Sabatini warned. “It’s coming at a time when the bloom is beginning to fade on Brazil’s economic success story.”

Of course, Vieira doesn’t see things that way — at least not publicly.

“The economy has not slowed down. It’s just not growing at the rates we had until 2010. This was two years after the financial crisis of Brazil,” he said. “Brazil had 7.5 percent GDP growth when most countries around the world had negative rates. We never had a crisis or depression. One year, we grew just 0.1 percent, but we never receded.”

The ambassador reeled off statistics to back up his claim. Unemployment is only 4.9 percent, he pointed out. The United States is still the largest single foreign investor in Brazil ($14 billion out of a total $62 billion in FDI last year), and Brazil today accounts for 3.4 percent of the world economy, up from 1.4 percent in 2000. Moreover, he points out that over the last decade, Brazil’s innovative social policies helped lift 31 million people into the middle class and almost eradicate extreme poverty. Today, more than 100 million Brazilians are middle-income earners.

However, this unbridled optimism doesn’t always square with reality — and the reality for millions of ordinary Brazilians is that the country simply cannot afford one, let alone two, world-class sporting events when their own economic house is not in order.

Tom Vogel, a former Wall Street Journal bureau chief in South America, has written about the region for more than 20 years.

“A growing number of Brazilian politicians have pivoted from unreserved chest-thumping pride about the country hosting the 2014 World Cup and the 2016 Summer Olympics to a more cautious, even critical, stance,” said Vogel, who now runs Rachlan, a New York-based strategic communications firm. “One can track the start of this shift to nationwide protests last year against the rising cost of public transportation. These demonstrations grew and quickly tapped into a vein of discontent among Brazilians, particularly those from the lower middle class and below, about their country’s socioeconomic policies, corruption and the spending of billions of dollars to create facilities and other infrastructure” to host the 2014 and 2016 events.

One high-profile example of this “pivoting,” Vogel told The Diplomat, is Eduardo Paes, the mayor of Rio de Janeiro.

“In February 2012, he quoted President Barack Obama in a TED talk about Rio winning the 2016 Olympic bid, saying, ‘We really showed that, yes, we can,’” said Vogel. “However, just 18 months later — and less than two months after the June 2013 protest, Paes told ESPN Brasil that it was a ‘vergonha’ [Portuguese meaning shame or embarrassment] that his city was hosting the Olympics, and he blamed the Brazilian federal government for the slowness in preparing for them.”

But if Ambassador Vieira feels any vergonha, he certainly didn’t share it with us.

“There were some protests last year which were not connected with the World Cup — different groups protesting for better infrastructure — but I think this World Cup will produce huge benefits for Brazil. The government has partnered with the local sector to build six new stadiums and to renovate six others, including Maracanã [in Rio de Janeiro]. This is a legacy that will stay.”

So is the new 47-acre passenger terminal at São Paulo’s Guarulhos International Airport, which opened May 11 — with only 32 days to spare before the World Cup itself. Overhauls at other major Brazilian airports are running way behind schedule, though Vieira pointed with pride to 45 new urban transport projects in the 12 World Cup host cities as well as “a huge new expressway being built from the airport in Rio to the place where the Olympic villa is being built” for the 2016 Summer Games.

“One lesson we can learn from previous World Cups is that you must work hard in organization and good security to promote a joyful event,” the affable diplomat said. “I was posted in France when Paris hosted the World Cup in 1998, and it was a huge celebration.”

Vieira insisted he has absolutely no concerns about large-scale violence or terrorism during the World Cup.

“The government is well prepared. We have 14 new integrated control-and-command centers — two are national and 12 are local — in each city hosting events,” he said, noting that 170,000 police officers will be on hand to ensure security for the duration of the event. “Brazil is a very open and transparent country. We have never had any kind of terrorism in Brazil and we love to receive foreigners.”

Yet violent crime in the country’s largest cities has reached critical levels. During the first three months of 2014, Rio alone reported 1,459 homicides — a 22 percent increase compared to January-March 2013. The incidence of street robberies jumped even higher, by 46.2 percent.

Asked about Brazil’s crime problem — it recorded more than 51,000 homicides in 2011, more than any country on Earth — Vieira seemed rather defensive.

“Violence is not a characteristic of any country, but a result of poverty, unequal income distribution and access to markets. The government has a number of policies in place to fight violence, transnational crime and drug trafficking,” he said. “This is not only a Brazilian disease; it’s all over the world.”

Vieira, 61, has been Brazil’s ambassador in Washington for more than four years and has made a career out of achieving consensus and avoiding controversies.

“I consider myself a discreet person. A diplomat has to be discreet, and that’s also a reflection of my personality,” he told The Diplomat back in September 2010, when we first interviewed him. “I’m not very effusive. I’m not a pop star.”

Born in the city of Niteroi, across the bay from Rio de Janeiro, Vieira began his diplomatic career in 1975 and landed his first overseas posting three years later at the Brazilian Embassy in Washington. He was next assigned to the Latin American Integration Association in Montevideo, Uruguay, and served at Brazilian embassies in Mexico City (1990-92) and Paris (1995-99).

Vieira also held senior positions within the Brazilian Foreign Ministry and various government agencies, including the Itaipú Binacional hydroelectric power plant jointly owned by Brazil and Paraguay. In 2004, he was appointed Brazil’s envoy to Argentina, where he remained until his return to Washington in 2010.

In an analysis published by Inter-American Dialogue, researcher Matthew Schewel described Vieira as “an expert at resolving conflicts and building alliances” with Brazil’s immediate neighbors.

Vieira’s tendency to put a diplomatic face on difficult situations was evident during our most recent interview. He said Brazil’s ties with Washington are “excellent” and have been ever since the United States became the first country to recognize Brazilian independence in 1822.

“We have always worked together because we have very similar values,” he said, noting that Brazil has received 14 visits from U.S. presidents — beginning with Herbert Hoover in 1928 — while 17 Brazilian heads of state have visited the United States since 1876.

Yet “excellent” hardly seems the way to describe the current state of bilateral affairs. Last September, NSA whistleblower Edward Snowden leaked details of a secret surveillance program in which the National Security Agency monitored Rousseff’s phone calls and emails, wiretapped communications by her aides, and spied on Petrobras, the state-run oil and gas conglomerate.

Outraged, Rousseff canceled her long-planned October state visit to Washington and used the U.N. General Assembly meeting to lash out at the Obama administration.

“What we have before us, Mr. President, is a serious case of violation of human rights and civil liberties; a case of invasion and capture of secret information pertaining to business activities, and above all, a case of disrespect to national sovereignty of my country,” Rousseff said, moments before Obama took the podium.

Vice President Joe Biden announced in early May that he plans to attend the June 16 soccer match in Natal between the United States and Ghana, then meet with Rousseff in Brasília, in an effort to patch things up.

Even so, said Shifter, relations are “strained and distant” at best — and Washington is now in damage-control mode.

“After Rousseff was elected, Obama went to Brazil and tried to build confidence. But the Snowden issue created a major strain between the two countries,” he said. “The U.S. is doing what it can to keep good relations going, but there won’t be any major progress until at least after the Brazilian elections in October. Right now, the United States is trying to make sure things don’t get worse.”

Vieira, though, says things aren’t that bad: “What happened last year is that President Rousseff postponed her state visit to the U.S,” he explained. “The moment was very bad. Together with President Obama, they decided to postpone it to a better moment, after everything had calmed down, so that the focus of public attention would not be on the spying issue. The [NSA spying] revelation had a big impact in Brazil, but this doesn’t mean we’re not on speaking terms.”

Shifter says the ambassador is trying to manage the situation as best he can. “U.S.-Brazilian relations have enormous potential, but they can only be realized if both governments are really committed to it. Right now, I think that commitment is not clear.”

But Sabatini of the Americas Council says bilateral tensions run deeper than the NSA fracas.

“At the practical, day-to-day level, relations are actually quite strong. Educational and commercial exchanges continue as before, along with diplomatic coordination regarding the worsening situation in Venezuela,” he said. “The larger issue is Brazil’s voting pattern in the U.N., where it has consistently abstained in the cases of Libya, Syria, Iran and Russia. That is a point of friction, in that it’s a prickly partnership.”

Brazil’s increasing ties with Cuba have also irked U.S. officials, yet relations with Washington are not the 66-year-old president’s biggest concern at the moment.

Rousseff — a one-time Marxist revolutionary who served as Lula’s chief of staff from 2005 to 2010 and then succeeded him as Brazil’s first woman president — has seen her popularity fall from 55 percent in February to around 48 percent today. Her two younger rivals for the presidency are Aécio Neves, a 54-year-old senator who heads the Party of Brazilian Social Democracy, and Eduardo Campos, 48, leader of the Brazilian Socialist Party.

Both men are trained economists who later became congressmen and then governors, dramatically reducing poverty while boosting tax revenues in their respective states despite fierce opposition from labor unions — and both were re-elected by wide margins. Even so, few pundits expect Rousseff’s center-left Workers’ Party to be kicked out after 12 years in office.

“Ms. Rousseff remains the favorite to win,” The Economist reported May 10. “Unemployment is at historic lows and disposable incomes are unlikely to slide between now and October (although the possibility of protests at the World Cup may provide a focus for discontent). She will enjoy more free TV time than Messrs. Neves and Campos put together. But she is in a fight.”

Back in Washington, Vieira has kept himself busy raising Brazil’s profile across the United States. He said the United States remains the top foreign investor in Brazil, which ranked as its ninth-largest trading partner in 2013 (with $72 billion in two-way goods trade).

As ambassador, Vieira has visited 22 states; his most recent trip took him to Texas and New Mexico.

“I meet with governors, mayors, chamber of commerce people. I also reach out to the universities,” he said. “Our goal is to send 100,000 Brazilian students abroad at government expense. So far, we’ve sent over 10,000 students to the United States alone.”

The ambassador doesn’t plan on visiting Brazil during the World Cup; instead, he’ll probably be hosting parties here in Washington. He’s already thrown several parties at the embassy residence, most recently in April, when nearly 400 people came for a reception to view the FIFA trophy, which had already visited 88 countries on a nine-month, 93,000-mile world tour before stopping at the embassy on its way back to Rio.

Vieira, ever the optimist, says he’s confident that whatever issues divide Brazil and the United States can and will be resolved — and that both nations will eventually come out looking like champions.

“I only see a very bright future for us,” he said. “A country the size of Brazil has a number of interests. Some are convergent with U.S. interests, some are not. The important thing is that even if we disagree, our final goal is the same. We are both huge democracies and multiethnic societies, and we both fight for human rights. It’s just that sometimes we have different ways to get to the final goal.”

About the Author

Larry Luxner is news editor of The Washington Diplomat.