Financial calamity declared in Rio weeks before Olympics, but Games will go on – ‘It is completely unprecedented’

Desdemona Despair

By Dom Phillips
17 June 2016

RIO DE JANEIRO (Washington Post) — Just weeks before it stages the 2016 Olympic Games, the state government of Rio de Janeiro has declared a “state of public calamity in financial administration” and warned that the situation is so dire it impedes the locale’s ability to meet Games commitments.

The Olympics start Aug. 5 with Brazil already facing an impeachment trial of suspended President Dilma Rousseff, a public health crisis over the Zika epidemic and a deepening recession.

In an official decree published Friday afternoon by acting governor Francisco Dornelles, the state government said the crisis could cause a “total collapse in public security, health, education, transport and environmental management.”

Coming less than two months before the city hosts its first Olympic Games, the move stunned many in the Olympic city.

“It is completely unprecedented,” said Paulo Baía, a professor of political science at the Federal University of Rio de Janeiro. He said while Brazilian cities had previously made similar declarations, he had never seen such a move from a state before.

The measure was intended “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,” Dornelles said Friday.

Mário Andrada, executive director of communication for Rio 2016, said the Games would not be affected.

“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,” Andrada said.

The state of Rio has 16 million inhabitants and relies heavily on royalties from the oil fields off its coast. Hit by falling revenues and the tumbling price of oil, the state has inched further and further into the red while a huge corruption crisis has left state-run oil firm Petrobras, one of Rio’s biggest companies, reeling. [more]

Financial calamity declared in Rio weeks before Olympics, but Games will go on