Just seven weeks before the opening ceremony of the Olympics, the governor of Rio de Janeiro has declared a “state of calamity.” Interim Governor Francisco Dornelles says the state’s government is bankrupt and can’t meet its financial commitments ahead of the games.
The financial emergency is just the latest crisis to hit Brazil. The country’s president is facing impeachment proceedings and the country is in the middle of an economic recession. A security crisis and the Zika virus have also rattled Brazil, as Lulu Garcia-Navarro has reported.
Lulu tells our Newscast unit that finances in Rio “have been so dire … that civil servants haven’t been paid and hospitals are operating on a shoe string.” She adds that even amid a countrywide recession, “the state that is hosting the Olympics has been particularly hard hit.” Here’s more from Lulu:
“Most of its revenue comes from oil and gas, and the state oil company has been at the center of a corruption scandal. The federal government is expected to bail Rio out with just enough money to see it through the Olympics – but what happens after the athletes go home is still unclear.”
In a decree, Dornelles said the state requires emergency measures to prevent “a total collapse in public security, health, education, transport and environmental management,” Reuters reported.
Dornelles said the decree is meant to “call the attention of the whole society of Rio to the problems the state has, opening the way for us to take very tough measures,” according to The Washington Post.
And “while the majority of Olympic infrastructure costs have been spread across city, state and federal budgets,” the wire service says, the state of Rio has shouldered the cost of “most day-to-day security and health services.”
Mário Andrada, executive director of communication for Rio 2016, told the Post that the Games would not be impacted by the emergency decree:
“We knew since last year that the financial state of Rio state was critical. We work with them every single day. They have fulfilled all their obligations for the Games. They created a state law for tax breaks that we were able to use.”
Rio state Finance Minister Julio Bueno said “security was the state’s biggest cost,” according to the Post. As Lulu reported, the dire financial situation is visible on the streets of Rio: “Crime is soaring because cops don’t even have gas for their cars.”
It’s also visible in the crime statistics, as Lulu has reported:
“Murders are up 15 percent from last year. Robbery is up 30 percent. Amid the economic and political turmoil, the state security budget has been cut by a third. The gangs are fighting for territory in advance of the Olympics, according to authorities.”