Following the crushing defeat of its soccer squad at the London Olympics, Brazilians are looking to President Dilma Rousseff to fulfill national expectations back home. The 2-1 loss to Mexico still stings because Brazil has five futebol World Cups but no Olympic gold.

Now, Rousseff's constituency and the world will be watching to see whether the president can deliver over the next four years as Brazil prepares to host three lucrative, globally televised sporting events: the 2013 Confederation Cup, the 2014 World Cup and, in Rio de Janeiro, the 2016 Summer Olympics.

Like her predecessor and political mentor, Luiz Inácio Lula da Silva, Rousseff is harnessing Brazilian passion for the sport—often called "the beautiful game"—to justify big spending on public infrastructure and social programs aimed at addressing some ugly realities of daily life in her country.

 

In August, she announced a $66-billion transportation stimulus spending plan that calls for new rail and road construction as well as port and airport improvements. Much of the work will be performed under long-term concessions, creating another windfall for a handful of big Brazilian engineering and construction-engineering firms. Most big E&C outfits already are gaining a share of the $18.7 billion set aside for World Cup preparations and the $14.4 billion budgeted for the Olympics by federal, state and municipal governments.

 

So far, public opinion polls show overwhelming popular support for the games, and Rousseff's approval ratings are almost as high as Lula's, one of the most popular Brazilian leaders ever. But support is by no means unanimous, and after a decade of expansion, the economy is slowing.

Gloom and Doom

Signs of stress in the social fabric are everywhere. Traffic congestion clogs the streets of Rio de Janeiro, São Paulo and other urban centers every day.

Power blackouts are a regular occurrence. In 2009, a storm triggered a big outage that plunged São Paulo into darkness and once again raised questions about the national grid's reliability.

Many favelas—Portuguese for a gritty neighborhood—remain violent as gangs fight police for power. Olympic plans for relocating people from many of Rio's most well-known favelas—Vila Autódromo, Morro de Providênciá, Santa Marta, Favelo do Metrô and Campinho—are raising hackles.

Ports are congested, adding shipping costs to Brazilian exports. Airline travellers often grapple with delays.