Despite the Latest $255 Million Budget Cut, Brazil Looks Well Prepared to Host the 2016 Olympic Games

ENGLEWOOD, Colo.--(BUSINESS WIRE)--

With the Rio de Janeiro 2016 Olympics just a little less than four months away, the city is facing several pressing issues such as crime, civil unrest and counter-terrorism. Also, questions continue to swirl around Rio's health-service readiness, due to the Zika virus. However, in the latest special report focused on the city's readiness, business information provider IHS Inc. IHS believes Rio remains well-prepared for the big event.

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Crime and pacification of the favelas

With crime rates down in Rio over the last year and murder rates in 2015 at their lowest level in 24 years, the main threat for visitors will be street robberies and theft. Even with declining crime in the area, of the five Olympic sites, downtown Rio poses the biggest threat. These crimes of opportunity usually entail an assailant taking wallets, jewelry, mobile phones and purses, sometimes with the threat or use of violence, with women and seniors as the most common targets.

"The pacification of the favelas (slums) has improved security and reduced no-go zones within the city," said Carlos Caicedo, senior principal analyst for Latin America at IHS Country Risk and one of the report's authors. "This pacification program with the Pacifying Police Unit (UPP), particularly those close to hotel areas, has contributed to improvements in safety and reduction of Rio's murder rate to its current relative low mark."

Civil unrest and possible terrorist activity

Protests in Brazil are not considered criminal behavior. Still the government has temporarily introduced exceptional measures for the duration of the games in lieu of frequent and spontaneous protests between pro- and anti-government supporters of embattled president, Dilma Rousseff. While the impeachment process is under way, if Rousseff remains in power in August, violence is likely to escalate. "In that event, tensions are likely to be taken to the streets, as demonstrators attempt to garner international attention," said Carla Selman, Latin American analyst at IHS Country Risk. "Protest hotspots are close to some of the Olympic sites, particularly Copacabana and Rio's city center."

To reduce crime and deter violence, the federal government will deploy 85,000 military and security personnel - double the numbers employed during the London 2012 Olympics. Saturation of security forces' presence, together with coordinated intelligence, as with the 2014 World Cup, will help to reduce crime and physical threats to foreign visitors.

With no presence of domestic terrorist groups, the risk of a large-scale terrorist attack remains low, IHS says. Though there is a precedent of terrorist attacks at sporting events, there are no foreign terrorist groups maintaining a domestic presence in Brazil, keeping the threat level low.

Rio's financially stressed healthcare system and the Zika virus

The outbreak of the mosquito-borne Zika virus has attracted many headlines, with more than 5,000 cases detected in Brazil since October 2015. However, the actual level of the threat remains unclear. The main geographical focus of the virus is located in the northeast of the country rather than Rio. There are well-equipped hospitals in Rio, located close to the main Olympic structures in Barra; there are also private hospitals near Maracanã.

The government has responded to the virus with a focus on prevention, in the absence of a vaccine, by controlling mosquito populations. Despite the financial difficulties faced by Rio's healthcare system, and the fact that some hospitals will struggle to provide a full service during the Olympics, Rio possesses health infrastructure at both the public and private levels that can offer primary and secondary care for patients who might require assistance during the games. Additionally, the federal government has agreed to provide the city with more funding, following the Zika-related health emergency declared by the state governor in early January.

Economic crisis and budget cuts affect infrastructure

Major works on Olympic venues are likely to finish on schedule, but the new metro rail line is unlikely to be completed. There have also been delays in the construction of venues due to the country's economic downturn, and to corruption investigations affecting major construction companies in Brazil.

If the metro link to the main Olympic site is not completed in time, visitors will face long journeys from the Zona Sul to Barra, IHS says. Transport by road is likely to be slower than normal, with some journeys taking up to two hours, including from Zona Sul to Barra or to Deodoro. Traffic will slow even further if extra buses are deployed. In addition, the constant movement of delegations of athletes and officials between Olympic locations and hotels is likely to cause further transport delays.

Because of Brazil's economic crisis, a USD255.36 million budget cut was announced by the government to the Olympic Committee in March 2016 – a 12 percent cut from the total USD2.09 billion to be invested in Rio for the Olympics. These cuts affect water sports and the proposed construction of temporary, de-scalable structures.

About IHS (www.ihs.com)

IHS IHS is the leading source of insight, analytics and expertise in critical areas that shape today's business landscape. Businesses and governments in more than 140 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs nearly 9,000 people in 33 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2016 IHS Inc. All rights reserved.

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