June 18, 2016
To prevent a “total collapse in public security, health, education, transport and environmental management” with less than fifty days before the inauguration of the Olympics, the governor of Rio de Janeiro has announced a state of financial emergency and pleaded for federal support.
The plea for funds is an embarrassment for the host of South America’s first Games and adds to a long list of woes that includes the impeachment of the president, the deepest recession in decades, the biggest corruption scandal in memory, the Zika epidemic and a wave of strikes and occupations of government buildings.
Brazil’s economy is expected to shrink by about 4% this year as a result of weak commodity prices, low demand from China, political paralysis and the Lava Jato (Car Wash) corruption investigation, which forced the suspension of many construction contracts and led to the arrest of dozens of senior executives. Rio is particularly hard hit because it is the headquarters of the state-run oil company Petrobras, which is at the centre of the investigation.
Faced by falling tax revenues, the state government has slashed health, police and education budgets. Teachers and doctors have faced lengthy delays in receiving their salaries, prompting strikes and occupations of schools and hospitals.