Monday, June 7, 2010

Blog Post for Monday June 7 and Tuesday June 8- classtime again

So for the last two days we've had classtime and more esteemed presenters. The first presenter on Monday morning was Savio Neves, president of the Business Council for Tourism and the director of the Corcovado train. I wanted to mention that I had gone to Corcovado to see the view from the Christ Redeemer statue the day before, and that the train wasn't working, but I thought it would come across as more of a pointless complaint than anything constructive.


So Savio discussed Brazil's rail system, and I couldn't help but think that my brother Richard would have loved this stuff (wouldn't be surprised if you've already tried to find info about this online, Richard). A major part of the discussion focused on the push to use the rail for tourism, and Savio mentioned a new federal law that specifically emphasizes the role of the railroad in Brazil's long-term plans for tourism. He elaborated, and explained that Rio will be beginning an ad campaign that will emphasize that Rio is much more than sun and surf. There are over 2000 "tourist attractions" in Rio alone, and this number will increase with the development of the Port Area in Gamboa, which will include a new aquarium, a 90 meter high Ferris wheel, 12 new hotels, and the refurbishment of 4 existing hotels. The redevelopment will be based on a model Barcelona used, and Rio will be hiring the mayor of Barcelona as a consultant. Much of this redevelopment will center around a business tourism model used in Chicago- when people travel for business they tend to spend more because they can charge portions of their trip to their employer. Currently, the U.S. and Argentina are responsible for the majority of tourism in Rio, but that this could increase if Visa requirements for tourism were easier and cheaper to obtain. For example, there has been a push by those in the tourism industry to pressure Brazil to find a way around reciprocity laws.


Savio also touched on Rio's desire to revitilize domestic tourism. He claimed that 10 years ago it was cheaper for Cariocas to go to Florida than the northeast of Brazil, and that Brazil is trying to change this by improving its rail system. He also mentioned Rio's interest in turning its downtown into a commercial and residential area similar to Manhattan, and has created a number of tax incentives to help facilitate this. Downtown has suffered ever since Brazil moved its capital from Rio to Brasilia and Sao Paulo became Brazil's financial center. While Rio expects an increase in rail usage of about 30% during the mega events, it projects it can still rely on an increase in domestic tourism to meet demand for this new development if the global economy continues to hinder international tourism.

Savio also mentioned plans for a $ 21 billion high speed rail system, though it will not be done before 2016. It should be interesting to track its development alongside the one planned for California.

The next speaker was Prof. Sergio Ferraz Magalhaes, President of the Institute of Architects of Brazil at the Federal University of Rio de Janeiro. Sergio underlined the complementray aspect of Sao Paulo and Rio, and explained how Rio is the capital of innovation. As examples he gave the high education HDI, the highest number of PhDs per capita, the only latin american business schools listed in the Financial Times global rank (e.g., COPPEAD), and large R&D clusters. He then spoke about Brazil more broadly, and mentioned that, while Brazil's GDP did not increase during the economic crisis, it did not decrease like other countries. Like many speakers, he brought up the topic of oil and its transformative potential for Rio- he claimed $70 billion is exepected to be invested in the state of Rio between 2010 and 2012.

Sergio then turned to social issues, and the difficulties involved in solving Rio's crime problems. He mentioned that recent law enforcement initiatives have brought homicide rates to their lowest level in 30 years. While Rio had much success with the 2007 Pan Am games, Sergio claimed they did not have as great a legacy as they could have, and that the upcoming mega-events leading up to the Olympics in 2016 should be transformative in unprecendented ways. He mentioned some projections for this legacy- the creation of $ 38 billion in public transport
projects, 120k jobs per year until 2016, and 60k new homes for people living in areas that are at high-risk for flooding.

The next speaker was Leslie Kikoler, who was very influential in the development of Rio's bid for the Olympics. He explained how his group is now transitioning form the bid commision to the organizing commission and that this is keeping him very busy. He described the bid and selection process, and explained how surprised he was when Chicago was eliminated after the first round- leaving Tokyo, Madrid, and Rio. Due to Obama's high involvement, Leslie thought the decision would come down to Rio and Chicago in the end.

Leslie's major claim was that Rio is not only ready to host these types of mega-events, but has been hosting at least two large gatherings of people for years: Carnival in March and a gathering of 2 million people on Copacabana beach for New Year's Eve. He then discussed the plan for the use of 70k volunteers in 2016, total youth participation, and social transformaiton thru sport.

Leslie then moved to the bid dossier, and explained how it was built on 3 pillars: 1. Technical excellence in all areas (up to par venues venues), 2. A unique experience for all participants (i.e., parties in streets, private beach for athletes), and 3. The transformation of a city and a nation (new transport, new airports, and the renovation of Rio's port similar to the model used in Barcelona- its port transformation made the city the 6th most visited city in Spain, while before it was obscure)

He also discussed the seemingly bureaucratic process for the bid dossier, and how any bid for the Olympics must have 52 "guarantees," which are like legal statements ensuring the city will be able to comply with IOC demands. These cover things like doping, security aspects, venues, and a variety of others. In April/May 09 an IOC committee came to Rio to interrogate the bid committee over three days. This committe included Rio's mayor and Lula, Brazil's president. Leslie claimed the decision ultimately came down to the potential for the games to transform Rio in a way the other cities did not need to be trasnformed. Chicago, Madrid and Tokyo were obviously ready, and are not in need of the same changes a mega-event like the Olympics can bring. Also influential, according to Leslie, was the map showing where different Olympic games have been located. Showing none in S. America, this underlined that the Olympics are long overdue in this region of the world.

Discussing safety, and perceptions of safety, Leslie brought up the widely publicized establishment of the UPPs (Unidades Pacificadoras de Policia, or Peace Keeping Unit), and that this is the biggest PR effort to change the image of Rio into a safe city. The UPPs are an effort by the state of Rio to create a police force that is better able to partner with community leaders, and not simply react to crimes in a strictly adversarial way. While the focus for the UPPs is on the Favelas, from the people I've spoken to, there is a great demand to introduce these elements into the policing of middle class neighborhoods as well.

The next speaker was Dr. Alvaro Bezerra de Mello, from the hotels and hospitalty industry. Alvaro mentioned his surprise when he found out Rio is to host both the World Cup and Olympics, and pointed to the benefits from stabalization of Brazil's currency 16 years ago. He mentioned that this is especially significant because the currency was not stable for the vast majority of his life. He then discussed his excitement for the 40,000 hotel rooms that will be needed by 2014, and claimed his organization is doing better than it ever has (8% better than last year).

We next heard from Romulo Dante Orrico Filho and Eduardo Fredrico Cabral de Oliveira- Sub secretaries for transportation and regulation, respecitvely. Romulo reitereated a number of the basic stats for Brazil, including population, gdp, gdp per capita, and HDI. He then talked about the differences in public transit use between cities in different countries. The US was way below almost all the other countries, as expected. He then discussed the key challenges for urban mobility in the the BRIC countries (Brazil, Russia, India, and China, though sometimes South Africa is included in this). His common recommendation for all four BRIC countries was that public transport can be well organized enough to minimize transportation investment. As the BRICs develop, those in power will want to take a private car philosophy to transport, which will put pressure on people like Romulo, and so he and people like him see their role as needing to make public transport a viable competitor in the overall transport market. He then summed up Rios trasnport problems with three main points: 1. 50% of the area of the city has inefficient public transport, 2. Pub transort is expensive, 3. There has not been enough supervision in the implementation process of public transport. This implementation issue is one that seems to come up repeatedly in discussion. Nearly every speaker emphasizes this gap between planning and implementation. While the bid document is exciting to read and very well organized the speakers' continuous reference to implementation difficulties is worrisome.

Next we heard from Eduardo Cabral de Oliveira, a member of the military police, who was hired by the mayor to help with the planning for public transport over the net few years. There is a huge lack of regulation of taxis in Rio. Lot's of corruption and crooked practices. It's so bad that the Government decided that they needed to hire this member of the military police to do something about it!

On Tuesday, June 8, we heard from Antonio Camilo Branco de Faria from the Specialized Security Consultancy. As with many of the presenters, Antonio began with a discussion of some stats about Rio. He described the larger metro area as the 23rd largest in the world. He then mentioned the hue investments Rio will be making in security ove the coming years. He noted the creation of PRONASCI, a Federal Governemnt Crime Reduction program that will have had $3.35 billion US dollars invested in it by 2012. There will also be scholarships for peace officers that participate in crime-control technology education, as well as those who participate in the UPPs.

Antonio also described the broad structure of security efforts in Brazil. This is built into the constitution, and include 4 categories of police and outlines their duties:
1. Federal Police, who patrol borders and national threats
2. Federal Highway Patrol,
3. Civil Police, who investigate and prosecute crimes, and
4. Military Police, who are charged with discouraging crime, Military Firemen, and Municipal Guards, who are charged with controlling traffic. The municipal guard's recent role in prosecuting small crimes has freed up the military police

I was a little confused by this last category, but supposedly there is harmony between these groups, and that this has only recently been achieved. As Leslie Kikoler and others have done, Antonio then went on to describe Rio's successful experience with large national and international events, including the Rolling Stones in Copacabana in 2006, NYE, and Carnival, and special trainings security personell are going thru to make the better able to deal with tourists.

Our next speaker was Antonio Henrique Borges de Paula, and spoke about the growing trend of international tourism to Brazil. He emphasized the imporatnce of sustainability in the develeopment of Rio's tourism industry, and that this sustainability has many components: ecological, cultural, social, and economic.

Our next speaker was Pedro da Luz, and spoke about urbanism and architecture. He advocated the idea of not expanding the Barra da Tijuca region, but rather making better utlilization of Centro and downtown. He concluded with a discussion of the current negotiations surrounding the movement of part of the Media Center to the port downtown. The port redevelopment project is one of the most heavily debated issues for the city. On the one hand, development in Barra could be very lucrative, but at the same time, development in Rio's port could help the nearby downtown area.


So we've begun thinking about the project and presentation our class is going to put together, and have separated into different groups. I've included myself with a study of safety and security, and did a great deal of research tonight. Supposedly we'll be giving a presentation to Ruy Cesar, who has the title of Special Secretary for the World Cup in 2014, as well as the 2016 Olympics.



1 comment:

  1. hi,You have a very good blog that the main thing a lot of interesting and useful!thanks Mergers and acquisitions consultants

    ReplyDelete