IOC: Study shows Rio Olympics provided significant economic benefit to city
A new independent study “confirms” that the Rio 2016 Olympic Games “provided significant economic benefit to Rio de Janeiro,” the International Olympic Committee has claimed.
The claim comes as the IOC continues to battle the widespread perception that the costs of hosting an Olympic Games outweigh the benefits.
The study, by Brazil's Institute for Applied Economic Research, argued: “By using the synthetic control method, we found out that the games delayed and mitigated the effects of the national intense macroeconomic crisis on Rio’s GDP per capita.
“The results point out that there were substantial increasing positive effects during those years, for both municipal and metropolitan levels. In the first case, the GDP per capita would have been almost 7.5 per cent smaller if the games hadn’t happened - which means it was approximately R$3,694.76 [$999]/year higher than it would have been in a no-games scenario.”
“Regarding the metropolitan area, the GDP per capita would have been nearly 5.1 per cent less. It improved about R$1,912.38/year due to the intervention. Furthermore, we verified that, if the games had not taken place, Rio’s real GDP per capita would have gone back to 2007 levels. Because of the games, its least level equalled that of 2012.”
The IOC said: “Rio 2016 helped mitigate the consequences of what would become Brazil’s worst recession on record for the games host city and region.”
The study said that “in a national macroeconomic landscape of intense crisis, the games delayed and alleviated the effects of such crisis in Rio’s GDP per capita. Our findings point to a positive, growing effect of considerable magnitude throughout the entire period.”
The study pointed out that: “In launching itself as the venue for the 2016 summer Olympics, Rio de Janeiro opted for a comprehensive urban development strategy, with direct effects on the dynamism of the local economy. The games were faced with an undertaking to ‘transform the city’. Infrastructure improvement projects were executed to receive the event. As a result, the investments in the preparation phase were substantial - in the order of R$39 billion.”
The study concluded: “In the medium and long term, advances in the economy of Rio de Janeiro are expected from: i) expansion and improvement of the infrastructure of the city; ii) improvement of productive and organizational processes - both in the private and public sectors; and iii) massive international advertising, which can positively impact tourism and exports.”
In July 2017, the IOC dismissed a claim for financial assistance from Rio 2016 organisers, saying that it already contributed a “record” $1.53 billion to the costs of the games and had “has closed all its obligations with the organising committee.”
The IOC was responding to a request from the organising committee to help pay remaining debts estimated at between $35 million and $40 million
Analysis published by AP a month earlier, based on city, state and federal data, claimed that the overall costs of the games totalled $13.1 billion, a mix of public and private money.