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Brazil may be all smiles, but woes to remain after World Cup

Source: Reuters - Thu, 26 Jun 2014 14:53 GMT
Author: Reuters
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By Paulo Prada

RIO DE JANEIRO, June 26 (Reuters) - Grazielle Melo, a 27-year-old grammar school teacher, drank cocktails with two friends after watching Brazil's team at an outdoor screening of a recent World Cup game in Rio de Janeiro.

Not your typical Brazil fans, none of the three donned the canary yellow jerseys like the sea of revelers around them. In fact, they are entirely "anti-Copa" - against the event altogether.

But they are partying nonetheless.

"It's Brazil," said Melo, gearing up for an Afrobeat concert that followed Brazil's riveting match against Mexico last week. "We're going to have fun anyway."

Despite widespread fears of unrest, the World Cup has not brought an eruption of massive street protests like those that disrupted a warm-up tournament last year and worried the government and security forces for months.

Angry over a stagnant economy, poor public services, rising prices and the more than $11 billion that Brazil spent to host the Cup, more than one million people took to the streets to protest last June and July.

Now, though, much of Brazil is having a giant party even though the country, while putting on most of the matches so far without a hitch, failed to deliver much of the infrastructure and improved public services that its leaders promised the World Cup would bring.

The good times confirm what cynics among last year's protesters had already predicted - that frustrations would be forgotten once real fun was to be had.

By forgetting - at least for now - the issues that had it in a frenzy only a few months ago, Brazil is revealing a trait that many say keeps it from clearing the obstacles that have long hobbled its development.

"We live in the moment, intensely enjoy it and don't worry too much about the future," said Eduardo Giannetti da Fonseca, a prominent economist and author whose book, "The Value of Tomorrow" examined the trait. "It's a national characteristic - we celebrate the present and set aside the collective sacrifices that are necessary for progress."

With legions of foreign fans here supporting their home teams, and Brazilians themselves celebrating what has been one of the most memorable World Cup starting rounds ever, lingering protests and labor strikes have done little to kill the buzz.

Good for fun-lovers, no doubt, but bad for those who are still furious over the billions spent on stadiums, some of which will likely become white elephants once the tournament is over.

Nobody should be surprised that the land of soccer and samba is celebrating a World Cup, even if polls before the event still reflected widespread opposition to Brazil's role as host.

After all, how many countries take a week off for annual Carnival celebrations that fall before the actual Catholic holidays that inspired them? And how many countries would declare holidays in cities that host the World Cup's 64 games, let alone the entire country whenever the national team plays?

A DISTRACTION

Brazil has always dropped everything come World Cup time.

But the grievances shown in the last year are not something to brush off in a country that recently appeared on the verge of making a historic leap beyond the ranks of developing nations.

A decade-long boom helped lift more than 30 million people out of poverty and economic growth hit 7.5 percent in 2010 before it suddenly lost momentum. Growth has averaged less than 2 percent a year since 2011.

Newly empowered consumers who expected things to get even better revolted when it turned out their newfound gains were all there was to be had, not a mere taste of more to come.

"People had woken up for once, but look how little it lasted," says Beremis Freitas, a bottled-water distributor who in the 1980s played midfield for Bangu, a mid-tier professional soccer team in Rio's sprawling blue-collar suburbs. "I love the game, but right now it's a distraction from more important things."

Even if Brazil is distracted, the complaints will resurface, especially in the run-up to an October election in which leftist President Dilma Rousseff will seek re-election and a fourth straight four-year term for the ruling Workers' Party.

While mass protests aren't expected to break out again, and Rousseff is still favored to win, polls suggest the unease will push what had seemed easy victory into a second-round runoff.

Economists have long argued for big reforms to foster long-term growth in Brazil.

Investment, a crucial component to ease infrastructure bottlenecks and make Brazil more efficient, still represents less than a fifth of the economy - half the share, or less, invested by other big developing nations like China, India and Indonesia.

Much of the money Brazil could use to invest is tied up in vast government payrolls, generous pension programs and other costs needed to maintain its big bureaucracy. The result is third-world public services and other problems despite Brazil's notoriously first-world tax rates.

To invest more, Brazil would have to approve tax and labor reforms that have been discussed for decades, yet arrive stillborn each time they approach Congress.

Brazil's government, now breathing a sigh of relief over smooth sailing so far during the World Cup, acknowledges the tough work ahead and admits that it might not accomplish it all.

"A tax reform is difficult anywhere in the world," says Aldo Rebelo, the country's sports minister and a longtime Congressional whip and Workers' Party ally.

He points to the socioeconomic gains of the last decade and argues that "there is no conflict between effort, discipline and hard work and the joy that Brazilians exhibit."

Still, he recognizes that Brazilians aren't quite as thrilled as the soccer spectacle might suggest. "Even when we are sad, Brazil as a people keeps a smile on its face." (Editing by Todd Benson and Kieran Murray)

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