Rio declares Olympics financial emergency

Rio de Janeiro has declared a state of financial emergency and requested federal funds to help fulfil obligations for public services during the Olympics that start August 5.
Rio is expecting about 500,000 foreign visitors during the Olympics, which has coincided with Brazil’s worst recession since the 1930s and a political crisis that last month led to the suspension of President Dilma Rousseff.
Rio expects a budget deficit of over $5.56 billion this year as spending planned before oil prices fell outstrips revenue that is tumbling during Brazil’s recession.
Rio state’s debt has been downgraded several times.
“The state’s financial emergency in no way delays the delivery of Olympic projects and the promises assumed by the city of Rio,” Mayor Eduardo Paes said on Twitter.
He also underscored that legacy construction projects, with the exception of an 8.79 billion-real expansion of Rio’s metro that is expected to be finished just days before the Games open, are the responsibility of the city and that most have been completed.
The local organizing committee for the Games said that the state’s fiscal situation did not impact its actual running of the Olympics, which relies entirely on private funds.
While the majority of Olympic infrastructure costs have been spread across city, state and federal budgets, with some financing from private companies, the state is responsible for most day-to-day security and health services in Rio.
The financial pinch resulted in a 30-percent cut in the state’s security budget – just as Rio has seen a jump in homicides and assaults in recent months, raising concerns about safety ahead of the Olympics.

 

Aisha JM