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Bill Radke: The Summer Olympics in Rio de Janeiro are six years away, and we’re already hearing that money troubles are threatening the games. Brazilian lawmakers want to take most of the oil-tax revenue the city of Rio generates and spread the money around to needy parts of the country. Marketplace’s Bob Moon reports that could deny the host city billions it was counting on to build up for the Olympics.
Bob Moon: Brazil’s president has promoted the country’s recently discovered offshore oil reserves as a key to easing social inequality. But the local Olympic Organizing Committee is suggesting the money they represent made this possible:
Announcer: The Games of the XXXI Olympiad are awarded to the city of . . . Rio de Janeiro!
In recent days, the governor of Rio has wept publicly over the prospect of losing royalties worth $4 billion a year. That would make it impossible, he contends, to host the Olympics. But Christopher Garman, who watches Brazil for the Eurasia Group, doubts it’ll really come to that:
Christopher Garman: I think this is a little bit of grandstanding that’s going on. What the governor of Rio de Janeiro is doing is trying make as much of a political splash as possible in order to ensure that if this reform proposal is approved in the Senate, that the president will veto that provision.
Indeed, President Luiz Inacio da Silva is insisting on changes that won’t jeopardize the games.
At the University of Texas, Olympic scholar John Hoberman says it’s unusual, but no doubt effective, for local Olympic organizers to wield so much influence over such a politically charged matter.
John Hoberman: The Olympic games are a very big stick to hold in your hand when you are asking for an allocation of national revenues. So I would expect in the long run they’re going to get the money to support the games they’re calling for now.
Local organizers are warning that any funding shortfall could lead to a breach of Rio’s contract with the International Olympic Committee.
I’m Bob Moon for Marketplace.
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