gE Blog Series: Global Infrastructure Development Part 2 – Brazil's Infrastructure Gap

A few months ago, Brazilian authorities officially announced that $2.3 billion will be spent on infrastructure projects alone for the 2016 Rio de Janeiro Olympic Games. These costs will rise as projects are added along the way, and efforts to solve Brazil’s infrastructure gap continue. The pressure on the country continues as Brazil will be the first South American country to host the Olympic Games. On top of the 2016 Olympics, Brazil is also hosting the 2014 FIFA World Cup this summer and has experienced delays in its infrastructure preparation. Therefore, the focus on infrastructure development has sharpened in Brazil. Now the question is: How will Brazil’s infrastructure growth impact its long-term prospects as an emerging country in the global economy?

Infrastructure projects are not only important for major international events such as the World Cup and Olympics, but are also significant for global business activity. Enhanced transportation systems, better communication, and a stronger technological presence are all aspects of infrastructure projects that make a country more attractive for international business and foreign investment. Brazil has recognized this importance and has been developing its infrastructure long before it had plans to host the World Cup and Olympic Games. In the midst of public protests about the money being lavished on these international sporting events, Olympic organizers in Brazil made their budget clearer by separating legacy projects from those associated with the games. These legacy projects serve the future of the country as a whole and were started before the preparation for the World Cup and Olympic Games.

To achieve true competitiveness with other countries, infrastructure projects must become one of the highest priorities for Brazil according to PwC, a major financial services firm. The private sector and the international community are key players in Brazil’s infrastructure development goals. Partnerships with the private sector account for more than 70 percent of Brazil's infrastructure budget for the Olympics. Furthermore, foreign direct investment from countries around the world is another way for Brazil to accomplish its infrastructure growth plans. Sparked by the pressure of hosting the World Cup and Olympic Games, Brazil’s infrastructure growth will undoubtedly impact the country’s future. If successful in its goals, the growing South American country of Brazil might just become a major economic force to reckon with on a global scale.