Brazil and All Developing Countries Should Learn the Lessons of India’s Commonwealth Games Fiasco: Observations by Hannah Gais, Volunteer Researcher for ACORN International

With Rio de Janeiro hosting the final game of the 2014 World Cup and, more importantly, the 2016 Summer Olympics and Paralympics, the BRICS are posturing themselves yet again as benefactors of mega-event induced economic growth. “Development acceleration” is the “hot” thing for BRIC bids, tapping into a certain metric of economic success. Brazil is obviously geographically, politically, economically and culturally different than some other developing countries, but there are lessons from other mega-events that should not be ignored as the final plans and preparations are made in this age of industrial tourism.

In particular, the 2010 Commonwealth Games in New Delhi provides a basis to critique the methodology and approach of mega-events proponents who assert that building event infrastructure and marketing the region will automatically lead to a significant boost in GDP and a decrease in poverty. Jargon and mythology aside, can these mega-events benefit “the commons,” or are their benefits short-lived and/or outweighed by the negative effects? In other words, does the push to “clean up” poverty for the sake of tourism and event planning truly act as a mechanism for healthy, i.e., politically and ethically sustainable, economic development?

India’s hosting of the Commonwealth Games was riddled with problems from the get go. The games, which have been going on every four years since 1930, are the third largest multi-sport event in the world following the Olympic Games and the Asian Games. Without proper infrastructure, political support and transparency, an event of this size is bound either to fail or prevent the home country from reaping the benefits of a massive influx of capital – i.e., tourism. Sustainable and ethical development requires first and foremost good governance and best practices; if there’s one thing modern developing economies have taught us, it’s that growth can’t come from corruption.

India, like the rest of her comrades in the BRICS block, is a massive and up-and-coming economic power. According to New Delhi’s Candidate City Manual, which explains a bidding nation’s primary motivation for seeking to host the Commonwealth Games, “‘India is not only the world’s second largest and a stable democracy. It is also the second-most populous nation in the world, home to nearly 16% of the world’s population.'” Yet “when one in three Indians lives below the poverty line in India, when 40% of the hungry live in India, when 46% of India’s children and 55% of women are malnourished,” is holding such an event going to be beneficial?

The general consensus seems to be “no” for several reasons.

First, the operating costs of mega-events are already gigantic. For India, the actual costs of infrastructure development – such as elevated metro stations, stadiums and housing facilities for athletes, improved power grids, more parking lots, and a “sports specialty hospital,” according to a 2010 report by the Housing and Land Rights Network (HLRN) – was three times its initial estimate in the Candidate City Manual. Furthermore, a “Right to Information” request revealed widespread financial misappropriations. 36 million was diverted for the games from Delhi’s pension funds; city employees lost 20 percent of their pay during the summer; 160 million dollars had been taken from the budget to assist former “untouchables. Despite all of this, no wonder then that the city’s finance minister saying in April 2010, “We are broke” (HLRN, pg. 8).

Second, there’s no evidence that the “containment” or relocation procedures regarding slums is tremendously beneficial. Delhi’s focus on demonstrating it’s a “world class city” of “international standards” is part of the culprit of this displacement and marginalization. It resulted in a revitalization of the Bombay Prevention of Begging Act (once a relic of the Asian Games), which was meant to “clean up” the streets. Even more frightening were the 300,000 people evicted from New Delhi proper in addition to the 280,000 tossed away from the banks of the Yamuna in a city with little to no low-income housing.

Is Brazil heading towards Delhi’s “class-based containment” policy with its treatment of the favelas?

Brazil has pushed for better policing in the favelas to combat traffickers and gangs, and there have been drops in the crime rate. At the same time, some residents are facing eviction due to the city’s construction plans. One settlement, Vila Autódromo, whose 4,000 residents have resisted the city’s attempts to raze their homes; another settlement, Metro, has residents who refuse to leave their already bulldozed homes; another attempt to raze Brazil’s first Indian Museum resulted in clashes between indigenous squatters and police. As a New York Times article pointed out,

The evictions are stirring ghosts in a city with a long history of razing entire favelas, as in the 1960s and 1970s during Brazil’s military dictatorship. Thousands of families were moved from favelas in upscale seaside areas to the distant Cidade de Deus, the favela portrayed in the 2002 film “City of God.”

Hosting the Olympics and the World Cup is meant to be recognition of Brazil’s upward rise and stance as an emerging power, and like India, China and South Africa before it, Brazil must grapple with struggles different from those of traditional superpowers, such as the United States and Europe. While the revamping of Rio may help the most impoverished in the long run, forced evictions and relocations are far from being true solutions to the poverty afflicting these up-and-coming nations.

Third and finally, the allure of tourism and better press is not necessarily accurate across all countries. According to one working paper, timing and country-specific characteristics can alter the after-effects of a mega-event. For instance, while tourism may have declined in Greece after the 2004 Summer Games in Athens, Australian tourism grew after the Sydney Olympics and remained the same for the U.S. after the games in Atlanta. Tourism may grow in the months running up to the event, but that doesn’t necessitate higher rates in tourism after the event.

Additionally, these events may not help a country’s image in the way originally intended. In India’s case, the run up to the Commonwealth Games was one riddled with corruption, incompetence and poor public relations, and the fallout is still making waves (cf., Suresh Kalmadi’s arrest in February 2013 for “cheating, conspiracy and causing a loss of more than $16 million to taxpayers”). While Brazil’s preparation doesn’t seemed to be marred by controversies over toilet paper and a filthy athletes village, images of poverty and inequality after an aggressive tourism and foreign investment campaign can hurt a country’s branding, such as what happened to South Africa after the World Cup. Evictions may push extreme poverty away from the game sites, but it won’t eliminate it or sweep it under the rug.


Tiempo Pasado para la Justicia de Remesas

Como la suma total de pequeños sacrificios, las remesas, que empiezan como simples transferencias de dinero de un inmigrante o trabajador migrante, a miles de kilómetros de su familia y de su país de origen, no son solo de vital importancia para sus familias y comunidades, sino que son una fuente critica para la economía nacional del país de origen de aquél. De acuerdo con el Banco Inter-Americano de Desarrollo, las remesas son un componente necesario del PNB de muchos países en vías de desarrollo y hasta superan los insumos de asistencia económica del exterior o inversiones privadas de otros países.

Una y otra vez los países donde viven miembros y afiliados de ACORN International, aparecen en la lista de beneficiarias de remesas: India, Méjico, Honduras, Republica Dominicana, Kenia, Filipinas y Corea, especialmente. Esto tiene gran importancia personal y nacional para nosotros en nuestros países de origen y nuestros países adoptivos donde tenemos familia. Claramente, las remesas son valiosas para las familias inmigrantes y sus parientes. Hay muchos países en vías de desarrollo donde uno de los principales ‘artículos’ de exportación es el trabajo migratorio y las remesas en dólares son una de las importaciones mas criticas. Y aun así, los bancos centrales y las instituciones financieras mundiales parecen impotentes al ser enfrentados con bancos y organizaciones de transferencia de dinero.

ACORN International construyó una tabla de remesas que muestra los costos ligados a enviar dinero al extranjero. La mayoría de estos costos están ocultos y algunos, incluso, no están disponibles al público. Nos concentramos en diez (10) países en los que ACORN International tiene oficinas y/o afiliados. ACORN International enfocó el estudio en las principales instituciones financieras de Estados Unidos y Canadá. Recolectamos información de los costos asociados a enviar remesas de 100 dólares canadienses desde Toronto, Canadá, y/o 100 dólares americanos desde Nueva Orleans, Luisiana hacia los diez países donde ACORN International trabaja y/o tiene miembros. Elegimos 100 dólares ya que es la suma comúnmente enviada, de acuerdo con nuestros miembros y otros estudios.

De acuerdo a nuestra investigación, estos costos no incluyen las comisiones por recibir tales cantidades. En algunas instituciones, el precio varía dependiendo de la velocidad de la transferencia y las opciones de entrega. Otras, tienen costos extras como, por ejemplo, comisiones por “comunicación” o “procesamiento.” Luego de realizar el cambio a la moneda del país receptor, la diferencia por tipo de cambio también se convierte en ganancia para estas instituciones. Este costo se calcula restando el tipo de cambio de cada institución al cambio oficial. A veces esta diferencia no es grande. Otras veces, sin embargo, el costo es abismal, especialmente en conjunto con el resto de las comisiones involucradas en este tipo de operaciones.

Un ejemplo dramático es el del caso del Banco de América en Estados Unidos, el cual cobra $45 por enviar $100 a Kenia. Además, hay una comisión de $16 por recibir tal dinero. $13 son también perdidos luego de realizar el cambio de moneda. Es decir, que al inmigrante o trabajador migratorio le cuesta $75 para enviar $25 a su familia en Kenia.


ACORN International concluyó que para promover justicia en remesas y riqueza popular para nuestros miembros necesitamos la arquitectura de tres prolongados esfuerzos:

  1. Transparencia: Los reales costos y comisiones han sido expuestos de la manera más clara posible para que no haya ninguna duda sobre la naturaleza predatoria de las empresas ni de como varios actores desempeñan su papel para impedir una fijación de precios justa y razonable.
  2. Regulación: Tenemos que determinar por qué existe tal anarquía institucional. Hay algún cuerpo de los organismos financieros mundiales como el Banco Mundial o el Fondo Monetario Internacional o el G8 y otras deliberaciones? Y, en ese caso, podría ser aplicado a remesas para familias inmigrantes y trabajadores migratorios? Si las instituciones globales son inadecuadas, cuál es el rol, si alguno, de las instituciones nacionales de la banca central tanto en los países desarrollados como en los países en vías de desarrollo? Como podemos lograr rendición de cuentas, regulación y reforma?
  3. Presión: Junto a nuestros afiliados debemos promover la Campaña para la Justicia de Remesas fomentando y haciendo cumplir negociaciones, demandando acuerdos con instituciones y promulgación de políticas y programas con reguladores donde sea posible.