Should you be fortunate enough to be seated in a window seat aboard Emirates’ daily flight to Rio de Janeiro, host of next week’s Olympic Games, cast your eyes outside as you start to descend and you will gaze upon one of the most spectacular cities on Earth.
Tropical-green cliffs plunge into a crystalline ocean, beautifully-thronged beaches and modernist buildings compete with lush forest, and thousands upon thousands of colourful little homes sit charmingly crammed together on every hillside.
Yet looks can be deceiving. This is no paradise and once the plane lands, reality strikes. The cliffs are not the only thing plunging into the sea: an Olympic legacy cycle track collapsed into the ocean earlier this year, killing two people.
A few weeks ago, beachgoers found dismembered body parts washed up close to the Games’ beach volleyball venue in Copacabana. And those colourful little homes combine to create favelas, Brazil’s famous shantytowns in which drugs, gun violence and police brutality are commonplace.
Therein lies a great lesson regarding this blemished beauty known as Cidade Maravilhosa, the Marvellous City: looked upon from afar, things rarely appear as they are.
It is a principle that works both ways: if, on that same Emirates plane, you happen to pick up an international newspaper, you will inevitably read about a plethora of issues “crippling” Rio, from Zika to ISIL to a toxic water crisis.
In May, The New York Times went as far as to publish a column calling for the Olympics to be postponed, while only last week, 10 men were arrested on suspicion of planning a terror attack, prompting increased safety training exercises in the Cidade Olímpica.
Yet walking the streets of Ipanema, a neighbourhood that will house many of the half-million tourists expected to flood into this South American metropolis in the coming days, few locals – or cariocas, as they are known – show much concern for such issues. Close to the five-star Hotel Fasano, teenagers slurp açaí smoothies, old ladies walk small dogs, couples navigate the pot-holed pavements dressed only in swimwear, and the inescapable beat of a drum rises from the nearby beach. The people complain, but rarely about the hot-topic issues appearing in the international press.
“I do not fear the Islamic State and I especially don’t fear Zika as it’s winter now, but I do fear this government,” says Lucas Lopes Cunha, a computer programmer who moved to Rio from Belo Horizonte 18 months ago. “That is the real crisis in Brazil because the vast majority of politicians here are concerned only with their personal interests.”
Rio residents have enough to worry about without focusing on catastrophes that may never happen. More pertinent problems already exist, like a suspended president, Dilma Rousseff, who is facing an impeachment trial; a government embroiled in a multi-billion dollar corruption scandal; an economy suffering its longest recession since 1930; and an unemployment rate that has risen by nearly 20 per cent in a year.
In 2009, when the city won hosting rights for the Games, Brazilian organisers estimated the total cost would be 28.8 billion Brazilian reais (Dh32.478 billion). When the torch is passed to Tokyo at the closing ceremony on August 21, that figure is expected to be closer to 40 billion reais, more than 35 per cent over budget.
Yet, be it the ebullient carioca spirit or living by the mantra of “Vamos rir pra não chorar” – let us laugh so as not to cry – the smiles on the street means Rio, at least, does not feel like a city in crisis.
It speaks volumes though that few people were surprised when Olympic Games projects were embroiled in corruption allegations earlier this year. Reuters reported in May that Brazilian investigators are probing all venues and services financed with federal funds, including the failed legacy project to clean the city’s contaminated Guanabara Bay, which will host Olympic sailing.
Similarly, three construction companies involved in the renovation of the Maracanã, host venue for the Games’ opening ceremony, have been found guilty of improper enrichment at the expense of the state.
With the economic crisis leaving Rio with a 19 billion reais deficit, earlier this summer the state cut up to 2 billion reais from the police and special forces budget. A group of off-duty police officers responded by greeting tourists inside the arrivals hall of the city’s Galeão International Airport with a banner reading: “Welcome to Hell. Whoever comes to Rio de Janeiro will not be safe.”
None of which helps to generate public support for a sporting mega-event that, it is often contested, is geared more towards those visiting Rio than those residing here. While athletes are starting to flow in, previous construction of the Olympic Village and the regeneration of otherwise neglected areas in the north and west of the city has led to entire communities being destroyed and families displaced. Numbers are greatly conflicted, but data presented by Rio de Janeiro’s City Hall last year stated a total of 22,059 families – or 77,206 people – have been removed from their homes.
According to a series of surveys by Brazilian polling agency Datafolha, 50 per cent of Brazilians are against the Olympics, 51 per cent have “no interest” in the Games, 33 per cent have “a little interest” and 63 per cent believe the three-week event will bring “more harm than benefit”.
These figures might go some way to explain why 6.1 million tickets went on sale but 1.7 million remained unsold as of last week. Organisers, however, insist they expect the remaining 30 per cent of tickets to sell out, and a final marketing push proved fruitful as 100,000 additional tickets were sold in four-and-a-half hours.
Meanwhile, the Olympic Village opened its doors on Sunday, only for Kitty Chiller, leader of the Australian Olympic delegation, to reveal the country’s athletes will not be checking in because of concerns regarding “blocked toilets, leaking pipes and exposed wiring”.
Eduardo Paes, Rio’s sharp-tongued mayor, responded by saying he felt like “putting a kangaroo in front of their building to make them feel at home”, to which Team Australia replied they would prefer plumbers. Meanwhile, the state-sponsored doping scandal continues to engulf Russia, after the International Olympic Committee did not impose a blanket ban on its competitors at the Rio Games, leaving the decision with each international sports federation. The country’s track and field team has already been banned.
The mood is more festive along the Copacabana beachfront where Games posters hang on lampposts and the wavy pavement is bustling with entrepreneurial street vendors undercutting the nearby official megastore by 70 per cent. A sculpture of the famous five Olympic rings is proving popular with tourists and taggers alike – within a day of its installation, it was covered in anti-government graffiti.
Emergency federal support has now finally arrived in the city. Up to 85,000 police and soldiers are expected to man the streets – double that of the number on guard at the London Olympic Games four years ago. For a city in crisis, there has likely never been a safer time to be among Rio’s six million residents.
Which all begs the question: what happens next? Given that the final impeachment vote for Rousseff will take place immediately after the Games and the federal support is merely a loan, those aboard Emirates’ daily flight into Rio after the Olympic circus packs up would be well advised to fasten their seat belts. Further turbulence is on the way.
Gary Meenaghan is a freelance journalist based in Rio de Janeiro and a former sports writer at The National.
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Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
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Ads on social media can 'normalise' drugs
A UK report on youth social media habits commissioned by advocacy group Volteface found a quarter of young people were exposed to illegal drug dealers on social media.
The poll of 2,006 people aged 16-24 assessed their exposure to drug dealers online in a nationally representative survey.
Of those admitting to seeing drugs for sale online, 56 per cent saw them advertised on Snapchat, 55 per cent on Instagram and 47 per cent on Facebook.
Cannabis was the drug most pushed by online dealers, with 63 per cent of survey respondents claiming to have seen adverts on social media for the drug, followed by cocaine (26 per cent) and MDMA/ecstasy, with 24 per cent of people.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”