Hosting the Tokyo Olympics and Paralumpics without spectators is predicted to result in an economic loss of up to $29.1 Billion.Prof. Tim Harcourt, UT Sydney
Land of 2020 Olympics: Japan
The Olympics this year, which was scheduled for the year 2019 but got delayed by a year, due to the outbreak of the current ongoing COVID-19 pandemic. Since almost all the countries have faced deflation in the economy due to the pandemic, Japan saw the Olympic Games as an opportunity and marketed Tokyo 2020 as a chance to show the world that Japan had recovered from decades of economic stagnation and the destruction caused by the earthquake and tsunami that triggered the Fukushima nuclear accident in 2011.
But in reality, it rather was turned into one of the bad decisions due to the scandals and cost overruns, forcing the organizers to postpone the event for a year which resulted in soaring expenditures, economic losses, as well as the creation of political chaos, which in return caused great melancholy to its citizens.
The former Japanese Prime Minister Shinzo Abe portrayed the 2020 Olympic Games as a marketing campaign for a calm, confident Japan that was capable of competing with a rising China, which in return would evoke a nostalgia for the 1964 Olympics, wherein Japan had surprised the world with its advanced technology and economic prowess. Officials promised safe Games but took their time setting up the necessary conditions.
The officials promised a safe Games but took their time setting up the necessary conditions wherein the organizers debated on whether spectators should be allowed or not, eventually voting against it only when coronavirus levels were definitely rising.
Even after these drawbacks, the Games has given minor economic benefits to the country, which have been explained later in the article.
Pandemic, Not The Sole Factor
The total expenditure done in hosting the games is vague in nature, but it can be assumed that there is a reduction of around $1.3bn in the economic benefit section due to the absence of spectators at the Games.
The pandemic was not the only sole reason which has caused melancholy, the country also has its own blemish which was sundry in nature i.e. plagiarism, chauvinistic comments made by the head of the Japanese Olympic Committee, etc. which caused notoriety on the Games. As a result of which a number of prominent Games officials resigned due to poor decisions and errors.
These promoters of the Games had promised to celebrate the games with a low-cost, friendly environment along with also provided long-term economic goals and advantages. However, as the way construction of the site started, the cost of the officials had increased from $7.3 billion to $14.9 billion.
For example:- Toyota, one of Japan’s most prominent car-making firms, declared just days before the inception of the opening ceremony that it would not run its Olympic advertisements in the home market and that its chairman would not attend the event. Other sponsors also followed the same route quickly and withdrew themselves. Which also caused great setbacks to the Japanese economy.
In accordance with the analysis of stats done by the government, it was seen that the one-year delay of the Games due to the ongoing pandemic had created an increase of around 20% in its expenditures. Earlier, before the commencement of the pandemic, the audit of the Japanese government has declared an estimate of around $27 billion, which is still considered to be dodgy. Since the official estimates revealed that the event along with its after-effects would generate approximately 2 million jobs and increase more than $128 billion in the economic growth of the country through investments, tourism, and high spending.
Japan, which is considered to have a massive economy, its losses were seen as a hiccup on the radar, wherein its smaller shops along Tokyo’s main streets and winding lanes, on the other hand, may never recover.
Therefore, blaming the pandemic and creating it as the only sole reason for Japan’s economic loss is inappropriate in nature, since it was certain that the economy would have fallen short even whether the pandemic existed or not as the Japanese bureaucrats have established lofty goals.
Short-Term Economic Gains To Japan
The Games cannot be considered as a complete catastrophe for Japan as it had gained some short-term economic benefits which were less overt in nature.
- Construction Industry
68,000-seated National Stadium along with seven other venues was built in order to host the Olympics, which cost around $3 billion, along with this, 25 other places were renovated. Which after the completion of the games would turn into soccer, rugby grounds, and a place for cultural events. The athlete’s village would be converted into apartments. Simultaneously, the roads and the surroundings which also cost around $490 million were reconstructed.
- Electronic Retail Industry
Due to the surge in the Covid-19 cases, the officials had banned physical audiences, which in return had caused economic losses, But, keen watchers and sports enthusiasts watched on the internet and television splurged money on big screens (one of the famous one’s was the OLED TVs). Due to this, the electronic retailers were able to increase sales, which had increased by 30%, when compared to last year.
- Interest in Sports
Skateboarding, this year as the Games was seen as a keen interest among the audience especially among the youth. Famous skateboarders like Yuto Horigome, Sakura Yosozumo, Kokona Hiraki, and Sky Brown were given main focus, as the country had won gold medals under this category and also was a golden moment for them as they had won their first gold medal for skateboarding in the men’s category.
Seeing this, youths started rolling their skateboards and started this as a way of outdoor keeping in mind the COVID protocols and social distancing. A manager at the Murasaki Park in Tokyo said, “We’ve seen more people getting into skateboarding, kids and adults alike, especially recently because of the Olympics,”
- Economic Benefits Through Women
This time, Japan’s female athletes had given distinguished performance, they had reached the medals podium around 33 times out of 58 medals which the country had received. Seeing this achievement, Kathy Matsui, a former vice-chairman of Goldman Sachs coined the term “Womenomics” in the male-dominated societies of Japan so that the women of the country could promote the economic benefits of empowering women.
Lastly, it can be said the Olympics Games have affected the country partially, but these short-term benefits which have been stated above can only be said to have been achieved, only time can determine.