Rio de Janeiro declares ‘public calamity’ just weeks ahead of 2016 Olympics

‘Serious economic crisis’ blamed on tax shortfall as country’s oil revenues slide

Harry Cockburn
Sunday 19 June 2016 10:30
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The Statue of Christ in Rio de Janeiro
The Statue of Christ in Rio de Janeiro

The state of Rio de Janeiro has declared a “state of public calamity” due to severe financial difficulties less than 50 days before the start of the Olympic Games.

State governor, Francisco Dornelles, said the “serious economic crisis” could stop the government from “honouring its commitments” to host the Games.

The Olympics are set to begin on 5 August, and the country already faces a public health crisis over the Zika epidemic, as well as a presidential impeachment trial and a deepening recession.

The governor has blamed his state’s financial crisis on the impact the global oil crash has had on tax revenues, while Brazil has battled worsening recession.

In a decree, Mr Dornelles said the economic situation could trigger a “total collapse in public security, health, education, mobility and environmental management”, and has appealed to the federal government for aid ahead of the Games.

Mr Dornelles said: “The objective of the decree is to present to the society of Rio de Janeiro the financial difficulties of the state, paving the way for tough measures in the financial field and calling attention of the federal authorities to the difficulties that we have been having with the metro, with health, with public security, so that they can work with us.”

During a visit to the Olympic Park, Brazil’s interim president Michel Temer promised significant financial help for the Games, but has not yet named a figure.

Rio’s mayor, Eduardo Paes, said: “The position of the Rio City Hall is absolute fiscal and financial comfort.

“The state of calamity decreed by the state government in no way delays Olympic works and the commitments made by Rio.

“Therefore, I want to reassert here the confidence that we will hold exceptional Games.”

The state of Rio relies heavily on tax revenues from the oil fields off Brazil’s south eastern Atlantic coast. However, the tumbling price for oil has hit state finances, causing Rio to inch further and further into the red.

The situation has been exacerbated by a huge corruption scandal that has engulfed the country’s state-run oil company Petrobas, with senior government ministers implicated in bribery claims.

The crisis has meant that public sector workers and pensioners in Rio state are owed wages in arrears, and hospitals and police stations have been unable to get basic supplies.

Local media reported that the state-run morgue was even forced to stop receiving bodies as a consequence of the financial chaos, the Washington Post reports.

A spokesman for Rio 2016 said: “As we don’t receive any government funding from any level, there is no impact on our preparations.”

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