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Sep 11, 2013

Spectre of Economic Problems Brought by Previous Olympic Games Hangs Over Japan

On September 7, 2013, Tokyo was chosen as the host city for the 2020 Summer Olympic Games. Japanese Prime Minister Shinzo Abe has been eager to finally pull his country out of its nearly 20-year-long economic slump, and this may be exactly what Japan needs.

The Tokyo Metropolitan government is expecting to spend about JPY 3 trillion (USD 30 billion) on preparing the city to host the Olympics, which should lead to an estimated 152,000 jobs being created. The bulk of the stimulus money will likely be spent on constructing sports venues large enough to host the Games, an expected expansion of the city’s two airports, and general infrastructure improvements within the city.

After the bid was announced, Japanese citizens ran into the streets to celebrate.  Few expected Tokyo to win the bid over Istanbul.  Hosting the Games could indeed be a wonderful cure for Japan’s economic malaise, but if it’s a cure at all, it may only be a short-term one.

In 2004, citizens of Greece were filled with the same sense of hope as Japanese citizens today. Economic forecasters back then predicted similar gains of this or that nature, and almost every news outlet in the world was in general agreement that hosting the Games was going to be the best thing to happen to Greece since it began the very first Olympic Games millennia ago.  The games came and went, everything seemed fine, and then the problems started to become clear.

Greece, after all was said and done, ended up spending nearly USD 11 billion to host the Games – more than twice its initial budget.   Just a few years after the Games finished, all of the grandiose and expensive stadiums were left unused and derelict.  The stadiums, which no longer had patrons visiting them or athletes competing in them, were expensive to maintain, and became a drain on the country’s resources.  Greece responded to the problem by spending even more money, deciding to abandon some of the structures and attempting to convert some of them to other uses.  Nearly a decade later, a solution still hasn’t been found, and most empty stadiums still stand – covered in trash and weeds.  Today, the 2004 hosting of the Games is considered to have been an economic disaster for Greece, a net loss as opposed to a net gain.  To what extent the 2004 Olympics contributed to Greece’s current economic situation is anybody’s guess.

Then there’s China in 2008.  Today, the former Olympic structures are prime locations for amateur filmmakers who want to film movies with post-apocalyptic settings.  I have personally visited Beijing’s Olympic Park in 2011.  The paintjob on the Bird’s Nest’s is peeling off and the whole structure seems as if there hasn’t been any upkeep since 2008.  Parts are broken, and everything looks quite cheap.  Chinese soldiers regularly march around the nearly-abandoned Olympic Park, which now only hosts a few bored tourists – a miniature ghost town inside one of the world’s largest cities.

The Watercube, in a country where almost nobody knows how to swim, has been converted into a small waterpark.  You will find very few visitors.  The ceilings are leaking in several spots.  The water is collected into buckets.

The jury’s still out on London, but due to what happened in Greece and China, forming contingency plans for post-Olympic uses of all stadiums has become a regular practice.  I trust that London will not make the same mistakes as Greece or China.  Hopefully, Japan, also, will not.  It may take several years after 2020, however, before a complete economic assessment of the 2020 Games’ result can be had.

What do you think? Will hosting the Olympics in 2020 be beneficial to Japan?
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