Friday, May 31, 2002
For Brazil, World Cup is more than soccer
By MICHAEL ASTOR
Associated Press Writer
RIO DE JANEIRO, Brazil — Brazil's team is ready for the World Cup, and more might be riding on its performance than just a soccer title — the nation's economy, for instance.
In 1994, Brazil won the World Cup. The accompanying shot of confidence was widely credited with helping a newly launched economic stabilization plan take hold. Years of hyperinflation ended in a matter of months.
In 1998, Brazil lost 3-0 to France in the final. Coincidence or not, France's economy took off and is among the best performing in Europe. Brazil's economy, on the other hand, unraveled and the country was forced, several months later, to devalue its currency by about 35 percent.
The relationship between soccer and economics is supported by a new report by Goldman Sachs entitled “World Cup and Economics.” The report finds a “very loose pattern of correlation with GNP capita” and the latest rankings by FIFA.
A study by HSBC Bank found the stock markets of developed countries that won the World Cup since 1966 outperformed the global average by 9 percent.
And nowhere is the relationship between soccer and economics more evident than in the self-proclaimed “country of football.”
“What makes Brazil a star in the world is soccer. So there's a feeling if we can't win at soccer we can't do anything right,” explained Ronaldo Helal, a sociology professor who specializes in soccer studies at Rio de Janeiro State University.
Now, as Brazil prepares for its opener against Turkey on Monday, the country finds itself at a crossroads both on the field and off.
Opposition presidential candidate Luiz Inacio Lula da Silva has taken a commanding lead in the polls heading toward October's elections. The possibility of a left wing Workers' Party victory has worried international investors.
Fearing an opposition victory would lead the country away from the current administration's market-friendly, fiscal austerity, several major banks have downgraded their ratings of Brazilian debt.
“If Brazil is a complete disappointment (at the Cup), people are going to show much more disenchantment with the status quo and the administration, so it will increase the probability of an opposition victory,” said Walter Molano, Latin American Analyst for BCP Securities.
Molano said regardless of the Workers' Party economic policy, an opposition victory could wreak havoc on Brazil's economy.
“Wall Street has been demonizing Lula for the last eight years, and because the lion's share of Brazilian debt is held by foreigners, if they decide to escape en masse from Brazil and bond prices fall precipitously, that will affect the economy,” he said.
The erosion in investor confidence in Brazil's economy mirrors Brazilians' loss of faith in their national team.
Brazilians have long taken pride in being the only country to win the World Cup four times, qualify for all 17 Cup finals and only lose a single qualifying match along the way.
But leading up to this year's tournament, Brazil barely made the cut, losing to Argentina, Bolivia, Chile, Ecuador, Paraguay and Uruguay along the way.
Throw in publicly aired charges of massive corruption in Brazilian soccer and it's not surprising confidence in the national team is at an all-time low.
The effects on the local economy are already evident. The traditional spike in sales of television sets that precedes the World Cup failed to materialize this year.
Worse yet, fewer people are spending money to decorate their streets with green and yellow streamers and garish murals depicting the national team as superheroes.
“Why am I going to spend money to celebrate?” said Leonice Silva, a 34-year-old cook. “The way the team's playing, we probably won't even make it to the second round.”
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For Brazil, World Cup is more than soccer
