JOHN TULLOH. Olympics and oil – a tale of two South American countries.

Jul 13, 2016


Back in 2009, the International Olympic Committee made a bold decision. It decided the 2016 Games would be held for the first time in South America, a continent not noted for its political, economic or social stability. Rio de Janeiro in Brazil would be the host city even though the evaluation of three others – Tokyo, Madrid and Chicago – was superior. At the time, Brazil’s economy was thundering along, overtaking Russia in strength and sitting comfortably in the world’s top 10. It was boom time in Rio. Today it is more like gloom time as Brazil’s economy contracts and suffers its worst recession since the 1930s. This should have come as no surprise in a continent synonymous with volatility. Nor is it a surprise that another South American country, Venezuela, once awash in oil revenue and wealth, should implode and now be mixing it with the world’s most hopeless economic cases.

South America brings to mind a combustible cocktail of recent history: hyperinflation (2000% a year in Chile at one stage), devaluations, black markets, coups, comic opera dictators, military juntas – often US-backed and including in Brazil, tyrants in suits, massive corruption, drug barons and their gangs, state-sponsored executions, urban guerrillas (Shining Path in Peru, the Tupamaros in Uruguay, FARC in Colombia), Che Guevara, a vast disparity in wealth throughout the continent and boom to bust countries – Argentina once upon a time and today Venezuela being prime examples.

But there has always been a cheerful image of Rio with its throbbing samba festivals, gaudy Mardi Gras parade, hedonistic Copacabana beach, the haunting girl from nearby Ipanema, the air of sensuality, multi-ethnic make-up, football obsession and the giant Christ the Redeemer statue like a guardian overlooking the city from atop a hill. It has long been associated with good times, such as Fred Astaire’s song in 1933 of Flying down to Rio: 

Flying down to Rio, come with me
Where the lovely Brazilian ladies
Will catch your eye
By the light of the million stars
In the evening sky 

My Rio, Rio by the sea-o
Flying down to Rio where there’s rhythm and rhyme
Say feller, twirl that old propeller
We’ve got to get to Rio and we’ve got to make time 

You’ll love it, soaring high above it
Looking down on Rio from a heaven of blue
Send a radio to Rio De Janeiro with a big hello
Just so they’ll know and stand by there, we’ll fly there. 

     Half a million visitors are expected to follow Fred’s example and fly down to Rio for the Games. But they are unlikely to share all of his excitement. Recent airport arrivals were greeted by striking policemen holding a sign in English reading: ‘WELCOME TO HELL. POLICE AND FIREFIGHTERS DON’T GET PAID; WHOEVER COMES TO RIO DE JANEIRO WILL NOT BE SAFE’.

Fifty days before the Games are due to begin, the Rio governor declared a ‘state of public calamity’ because money had run out. There have been strikes, delays in salary payments to government employees, occupation of schools and government buildings and even the police having to rely on donated paper to record reports of the numerous crimes. All this comes in the wake of the suspension of the Brazil’s President Dilma Rousseff, the biggest corruption scandal in living memory, political paralysis, an economy in reverse and mindless violence.

Soon after Rio won the Games, it gave priority to creating Pacifying Police Units, a heavily-armed force whose task was to reclaim the favelas – the city’s slum shame – from the gangs. But, according to the New York Times, they seemed to have worsened the drug wars rather than stamped them out. So far this year, 43 police officers have lost their lives and 238 civilians have been killed by police. The paper also noted frequent shootouts near Olympic venues. More than 70 people have been hit by stray bullets, 21 of them dying. Then there is the scare of the Zika virus which has deterred some athletes, notably golfers and tennis players, from showing up. But one estimate said that women are 10 times more likely to be raped than catch the virus. All in all, it seems the IOC evaluation investigators made no allowance for likely trends in Rio based on the South American experience. Never mind, Rio’s ever optimistic mayor said the city will still stage an ‘exceptional Games’.

Spare a thought for Venezuelans who have little chance of fulfilling the Rio Games motto: ‘Live your passion’. Thanks to having the world’s largest oil reserves, it was once the most prosperous country in South America and known as ‘Venezuela Saudita’. This was back in the 70s when, according to the Chicago Tribune, Cadillacs and Buicks filled the streets of Caracas. ‘Free-spending Venezuelans routinely jetted off on shopping sprees in Miami, where they were known for their catch phrase ‘Dame dos!’ (‘Give me two of those’), the paper noted in a recent editorial. No longer. Today they are desperate for food and their country is a shambles. ‘We want food’, shouted demonstrators recently outside the presidential palace. A recent survey said 87% of Venezuelans said they do not have the money to buy enough food.

Venezuela’s principal problem has been what is its greatest asset, oil. It represents 96% of its export revenue. Oil prices, of course, have plunged. Like Brazil, its economy has gone backwards, contracting by 5.7% last year. Time magazine reports that inflation is expected to reach 481% by the end of this year and more than three times that by the end of next year. It also reports that Venezuela is the most corrupt country in the Americas and ninth most corrupt in the world.

Life for most Venezuelans has become a misery with empty supermarket shelves, scavengers for scraps of food, power cuts, water shortages, riots, schools closed, children skipping school to queue for what little food there is, government employees reduced to working two days a week to save on salaries and criminals exploiting the widespread hunger. Beer production has come to a halt because there is no money to import barley.

It is unlikely that President Nicolas Maduro will be able to lead Venezuela out of the abyss. He is a former bus driver who inherited a failed socialist regime from the late Hugo Chavez, president from 1999 to 2013. Chavez nationalised key industries and was inspired by the Cuban model of social reform. President Maduro blames his country’s woes on internal plotters and the usual nemesis for so many South American leaders trapped in awkward situations, Uncle Sam. According to the Washington Post, quoting US intelligence analysis, Venezuela may face a ‘full-fledged uprising’ before any sort of stability is restored.

But there are signs of optimism in South America. Chile’s President Michelle Bachelet, who was detained and tortured by the Pinochet regime before going into temporary exile in Australia, says that Latin America is a ‘land of opportunity’. Her country, once a tyranny, is prosperous and stable. She noted the region’s GDP has more than tripled in 20 years to US$6.4 trillion. ‘Democracy demands the continuous improvement of society, not the maintenance of the status quo’, she said. That is a big ask in a continent where the way of life, old habits and customs are so entrenched.

FOOTNOTE. Somebody will profit from the Olympic Games, noted a New York Times reporter in Rio, but it won’t be the majority of the city’s population. One of the biggest will be the owner of six square kilometres of land embracing the main Olympic venues and the athletes’ village. Once the Games are over, he is reported to have said he wants the area cleared of poor communities and converted into an area of luxury housing called ‘Ilha Pura’ (Pure Island). The Rio Governor was right, the reporter concluded. ‘It is a calamity’. 

Plus ça change. 

John Tulloh had a 40-year career in foreign news.

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