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Rio Olympics 2016: Rio government declares financial emergency

The state of Rio has plunged into a financial crisis with the Olympics just on the horizon.

Rio Olympics 2016

With less than 50 days to go for the Olympics, the state of Rio de Janeiro declared a financial emergency on Friday and has requested federal funds to provide proper public amenities during the Olympics that start on August 5. The announcement followed this week’s visit to Rio by Brazil’s Interim President Michel Temer, who said the federal government would ensure all obligations are met for a successful Games.

The official statement from the state government calls for emergency measures to prevent “a total collapse in public security, health, education, transport and environmental management.” The state’s finances have slumped over last two years due to a collapse in global oil prices as most of their revenue comes from the petroleum industry. 

The local organizing committee for the Games has said that this financial crisis will not affect the actual running of the tournament. Although most of the public costs for the Olympics come from the city budget and a large chunk of financing from private companies, the state is responsible for the transportation and security during the event.

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Brazil has been hit with its worst recession since the 1930s and has been gripped by a political crisis, which led to the suspension of President Dilma Rousseff last month. To host an event expected to bring in at least half-a-million people to Rio will be a massive task. 

The state has projected a budget deficit of $5.5bn (£3.9bn) for this year. Mayor of Rio, Eduardo Paes took to Twitter to assure that the economic crisis has not affected the preparation of the Games in any way, “The state’s financial emergency in no way delays the delivery of Olympic projects and the promises assumed by the city of Rio.” He also highlighted the fact that most construction projects have been completed, barring the 8.79 billion-real expansion of Rio’s metro that is expected to be finished just days before the Games open.

Since late last year, the state has been forced to delay pension and salary payments and pull down the shutter at some schools and hospitals, where crucial supplies, including medicines and syringes, are lacking. 

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There are also concerns of an outbreak of the Zika virus across the country, which has been linked to birth defects in which babies are born with abnormally small heads frequently associated with developmental issues.

Although this has been the story every four years; Athens was a mess, Beijing was in turmoil and Sochi in shambles, unfinished till the very last. But come the hour of the commencement of the Games, all seemed to have fallen in line and the event conducted smoothly thereafter. To expect the same this August would not be going very far, but Brazil will have to address the economic and political issues as quickly as possible to be able to pull off the Olympics.   

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