Brazil’s Olympic host state Rio broke, in need of emergency bailout

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RIO DE JANEIRO, — Brazil’s southeast state of Rio de Janeiro, host of next year’s Olympic Games, received emergency supplies and funding Thursday to alleviate a cash crisis that has shut down public hospitals.

The state declared a health emergency after it ran out of funds to keep most of its public health system operating.

The federal government provided 300,000 medical items, including medications, syringes and surgical gloves, while the city of Rio de Janiero provided a loan of 25 million reals (about 6.25 million U.S. dollars) to pay the salaries of medical staff.

“We hope to be able to normalize payments by the end of the week,” state Gov. Luiz Fernando Pezao told reporters, referring to paying the organizations under contract to operate public hospitals, which haven’t been paid in weeks.

At least 10 hospitals and 12 outpatient facilities in Brazil’s third-most populated state were forced to close their doors, disrupting the public health system.

The closings led hundreds of patients to crowd outside hospitals, protesting the lack of service.

The city of Rio’s aid, which could reach 100 million reals (about 25 million U.S. dollars), allowed two hospitals to open in the populous neighborhoods of Realengo and Campo Grande.

The state government blamed the cash crunch on the fall in oil prices, the state’s main source of revenue.

“Rio de Janeiro needs help. Tax collection has dropped 16 percent this year. And if tax collection drops, so do the funds earmarked for the health sector. But we are going to cut other costs to give priority to health, education and security,” said the governor.

State authorities say they need some 350 million reals (about 91.1 million U.S. dollars) to “normalize” service at hospitals, and expect to receive 90 million reals (about 22.5 million U.S. dollars) from the federal government at the start of the year.

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