I think that the world is already painfully aware that Brazil has problems, they just don't understand the magnitude of those problems. This fact is evidenced by São Paulo's failed attempt to win its bid for Expo 2020. Expo is the third largest world event, only surpassed by the Olympics and World Cup. Brazil was eliminated in the first round of voting, largely because of the high profile problems it is having with the World Cup and because of its poor past performance with events like the Panamerican Games of 2007, Confederations Cup earlier this year and the pope's visit for World Youth Day.
Other hosting nations for events such as the World Cup and Olympic Games have had their share of problems; that said most truly democratic nations haven't deprived their citizens of schools, hospitals, public security and other basic human services in order to stage those events. Brazil has effectively abandoned its population and left them to their own devices much more than any other host nation I'm aware of. This has sparked public demonstrations the like of which Brazil has not seen in decades.
I'm not convinced that the collapse of the World Cup and the loss of the Olympic Games which would surely result from that would be such a big hit to the Brazilian economy. I hardly think that would cause investors that are already in this country to run for the exit. Brazil is also too large of a potential market for foreign investors to ignore so I don't think that investment would dry up either. We see that the present "tunnel vision" displayed by this government which has focused all of its efforts on these two events, to the exclusion of all else, has brought about a slump in the economy which was until a little over a year ago still growing, albeit slowly.
To the contrary, I personally think that the World Cup will be a fiasco and could possibly bring about cancellation of the Olympic Games being held here. I also believe that would serve for a much needed wake-up call for the government of this great country. I think it would force them to focus on internal problems that desparately need to be fixed rather than some pie-in-the-sky dreams about launching itself into the "first world" with major international events. Clearly it is neither ready for those events nor for the first world; at least not just yet.