Tuesday, August 9, 2016

OF THE OLYMPICS AND WHITE ELEPHANTS

By the time you read this we will have been enthralled by a beautifully choreographed opening ceremony of the 2016 Rio Olympics. For the next three weeks we shall marvel at the feats of speed, strength and stamina of the young men and women who have endured blood, sweat and tears to perform on the world stage.

Unfortunately the Olympics – except for the 1984 Los Angeles Olympics, have proven to be a black hole for state resources and when the final finishing tape has been broken it has been difficult to discern the benefits to the hosting economy’s  of the quadrennial event.

"This is sad but not surprising. These extravaganza’s characterised by dodgy procurements and cost overruns have been proven to be what the resident technocrats need to finish their palatial homes or pay tuition for their pampered offspring. The promise of an economic boost or elevated global status often don’t materialise for the former and for the latter amount to 15 minutes of fame and not much else...

In fact hosting the Olympics in 2004 was at the heart of Greece financial woes a decade or so later. 

Borrowing heavily to spruce up infrastructure for the centennial games, after the games the Greeks were stuck with massive stadia that had little economic value once the show rolled on. But the debt had to paid. Like other developing nations the Greeks favourite past time is tax evasion so they were soon in a bind and almost found themselves out of the European Union when they were almost submerged by their debt obligations a few years ago.

The Olympics are great entertainment and I like most will be watching with bated breath as the athletes tear down the track or the gymnasts tumble up and down the mat or the swimmers cut through the water. But I will be suspending disbelief because I know after the party will come the hangover.

To be fair all these lovefests should be hosted only by nations that can afford the subsequent losses.
Brazil is already staggering under hard economic times. The Olympics and the soccer World Cup of two ago do nothing to raise incomes, improve services or improve the general wellbeing.

While it is the seventh largest economy in the world, just behind the UK, it has third world income inequalities. A Brazil has a gini coefficient – a measure of income inequality, of 0.505 with a figure towards zero being ideal and one towards one being disastrous.

The estimated $12b or $60 per Brazilian, that has been used to host the event would have been better spent improving social services and more economically beneficial infrastructure.

"The Olympics are a white elephant for poor countries. A white elephant like roads to nowhere or overinflated power dams or unsustainable state owned airlines. And like all white elephants they are often dimmed necessary to increase the surface area for corruption and serve as an ego trip for powerful people. Unfortunately they are paid for by hard earned taxes....

I love the Olympics but one cannot help feeling that such events, are a racket by global elite to divert resources into theirs and their cronies’ pockets to the detriment of the rest.

Things would be very different if the bills for these events were footed by the companies, who now are the major beneficiaries of these events. You would have leaner, less extravagant effects which would still provide the entertainment value we have become accustomed to with little negative effect on the general public.

If wishes were horses.

They say that when businessmen lock themselves in a room together you know they are conspiring against the consumer.

So while I cheer on these young athletes achievements I will have at the back of my mind that we are being had – especially the Brazilian tax payer, and there seems nothing we can do about it.

Pass me the popcorn

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