Fiscal crisis makes Brazilians rethink Carnival financing

. Mar 01, 2019
Fiscal crisis makes Brazilians rethink Carnival financing

Carnival is not only a time for people to tune out from their everyday lives and throw themselves into a five-day celebration featuring dance, music, and outrageous costumes—often prepared months in advance. However, according to a recent national poll, it seems that revelers do not think that public money should pay for their celebrations.

Apparently, 85.8 percent of people agree with reducing public investments for the party, redirecting them instead to priority areas such as education or healthcare. Also, 94 percent of people believe that the private sector should at least share the bill—most of them (72 percent of the total) want companies to pay for every dime spent on all the music infrastructure, booze, and security involved.

</span></p> <h2>Who should pay for Carnival?</h2> <p><span style="font-weight: 400;">The debate about who should pay for Carnival is not new but has been gaining momentum after <a href="">Brazil&#8217;s worst recession on record</a>. In 2019, </span><a href=""><span style="font-weight: 400;">prosecutors sued the city of Goianésia</span></a><span style="font-weight: 400;">, in the state of Goiás, trying to prevent it from using public money on Carnival. Plaintiffs alleged that a city struggling to meet its population&#8217;s basic needs shouldn&#8217;t allocate BRL 1 million to municipal festivities.</span></p> <hr /> <p><img class="alignnone size-large wp-image-14454" src="" alt="Fiscal crisis makes Brazilians rethink Carnival financing" width="1024" height="280" srcset=" 1024w, 300w, 768w, 610w, 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <hr /> <p><span style="font-weight: 400;">In the town of Carolina in Maranhão state, prosecutors have requested the local mayor be impeached for the same reasons.</span></p> <p><span style="font-weight: 400;">Other cities are </span><a href=""><span style="font-weight: 400;">voluntarily canceling Carnival altogether</span></a><span style="font-weight: 400;"> after not receiving subsidies from state governments. That was the case in the town of Formiga and Arcos, in Minas Gerais.  </span></p> <p><span style="font-weight: 400;">But finding resources from the private sector is not as easy as it seems. A report by newspaper </span><i><span style="font-weight: 400;">Folha de S.Paulo</span></i><span style="font-weight: 400;"> shows that </span><a href=""><span style="font-weight: 400;">Carnival block parties in Rio de Janeiro are struggling to find funding</span></a><span style="font-weight: 400;">, mostly due to the administration model adopted by the city.</span></p> <p><span style="font-weight: 400;">Municipal authorities hire private companies to coordinate the infrastructure, which gets the lion&#8217;s share of state resources in exchange for the authorization to negotiate sponsorships. But some of the needs, such as medical assistance, still must be provided by the block party organizers, which don&#8217;t have the money or expertise in finding such services on the private sector.  </span></p> <p><span style="font-weight: 400;">Despite financial struggles, the carnival party keeps getting bigger. Rio de Janeiro estimates it may host even more tourists during this year&#8217;s festival than the </span><a href=""><span style="font-weight: 400;">1.5 million who visited the city in 2018</span></a><span style="font-weight: 400;">. The National Confederation of Commerce, Services and Tourism estimate that Carnival will generate 23,600 temporary jobs and </span><a href=""><span style="font-weight: 400;">a financial impact of BRL 6.78 billion</span></a><span style="font-weight: 400;"> in tourism in 2019—and Rio alone will get BRL 2.1 billion of it. </span><span style="font-weight: 400;">

Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Most recently, she worked as an Editor for Trading News, the information division from the TradersClub investor community.

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