Canceled carnival has heavy effect on Brazilian economy

By Gabriel Toueg

SAO PAULO, Brazil (AA) - In a “normal” year, a Friday like today would be of parties throughout Brazil.

Streets would be full of people celebrating the longest holiday on the country's annual calendar. Street blocks would liven up cities like Salvador (Bahia), Rio de Janeiro (Rio), Sao Paulo, Recife, Olinda (Pernambuco) and many others.

The Brazilian Carnival is one of the best known events worldwide, but in 2021, in the midst of a severe increase in contamination by COVID-19 in the 213-million-inhabitants nation, festivities were canceled throughout the country.

The financial impact is already being felt and may exceed 8 billion reais ($1.5 billion). This is the CNC’s estimate for the loss for the country's economy considering 2020 figures.

The CNC, the National Confederation of Trade in Goods, Services and Tourism, is the entity that aggregates one of the main sectors of the Brazilian economy, which account for about a quarter of the country's GDP and generate roughly 25.5 million direct and formal jobs within over 5 million companies.

“The cancellation has a very negative impact on an industry that, by far, has suffered more from the pandemic,” CNC’s economist Fabio Bentes told Anadolu Agency, referring to the services industry.

He says that the State of Rio alone accounts for about 1/3 of the amount circulated during Carnival, followed by Northeastern capitals, which heavily depend on the event to generate their revenue.

“Revenue from Carnival represents about 30% of all the income in the tourism sector during the month in which the holiday falls,” which can vary between February and March, as it is a moving date on the calendar.

Bento sees a little relief for the sector.

“As many cities have declared an optional holiday, some tourism establishments will be able to reduce the impact with this prolonged break,” he says.

Carnival lasts until next Wednesday and there is no national rule on whether the five days long break should be kept as a holiday or adopted as normal working days.

Different cities and states have their own rules. “Whoever travels inland, for example, will help to drive tourism, but with derisory values”.

The total cancelation of street parties was adopted by several states and municipalities, such as Salvador and Rio, as a measure to contain the spread of the coronavirus.

In Rio, Mayor Eduardo Paes has banned parades and street blocks between today and Feb. 22, at risk of incurring a crime against public health. In addition, 20 out of 27 states have also canceled the holiday and will have normal office hours.

The CNC estimated that about 25,000 temporary Carnival-related jobs would no longer be created in the first two months of 2021. Carnival usually mobilizes an extensive chain of suppliers from different areas of industries, businesses and services.

Tourism and the hotel industry are among the sectors which most feel the impact.

Last year alone, tourism lost 437,900 formal jobs, with a 12.5% reduction in the workforce when compared to 2019. The hosting segment accounted for 65,400 of these lost vacancies.

Alexandre Sampaio, president of the Brazilian Federation of Hosting and Food (FBHA), says that “while the vaccine is not available on a large scale for the population, the tendency is that other major celebrations will equally suffer with cancellations, which will impact the entire productive chain of the sector”.

The CNC’s Bento agrees.

“The services sector is on hold waiting for the vaccination program. In the tourism sector as a whole, there is still great concern in relation to 2022,” he told Anadolu Agency.

“Without enough vaccines or with the slowness in the program, 2022 Carnaval may also be at risk,” he says. “With such a small coverage of the vaccinated population, the circulation of people will be reduced, which may affect the generation of revenue”.

Tonight the city hall of Rio, main destination for foreign tourists during Carnival, will inaugurate a special lighting in honor of COVID-19 victims at the Sambadrome, where the samba parades are held annually.

Until Saturday, the place will be lit up every night until midnight. By far it is not compared to the joyful and colorful images that Rio’s Carnival produces every year. But it surely is a reminder of the delicate days we all live.

Second country with the highest number of COVID-19 casualties in the world, Brazil has already 236,400 deaths and more than 9.7 million confirmed cases.

Experts see a worsening of the health crisis, with accelerating cases and deaths since the beginning of the year. Less than 22 vaccines were applied so far to every 1,000 inhabitants, showing slowness of the immunization program, which has been strongly criticized.