Tokyo Games Won’t Provide Much Economic Stimulus To Japan

2012 Olympics Won't Provide Much Economic Stimulus To Japan

TOKYO (AP) – IOC member John Coates, who oversees planning for the Tokyo Olympics next year, said the postponed games could help “revive” the Japanese economy.

Japan, like many countries, was devastated by the coronavirus pandemic and could be in recession when the Olympic Games opened on July 23, 2021.

“These games are a very positive opportunity for economic recovery,” said Coates during a teleconference Thursday with the Tokyo organizing committee. “These games can help kick-start the economy. These games could be the revival of the tourism industry. “

Coates also congratulated Japanese Prime Minister Shinzo Abe, calling him “a very, very intelligent man.” He said Abe also sees next year’s games as an economic stimulus.

But economists and Olympic researchers contacted by the Associated Press on Friday said any economic recovery would be negligible given the Japanese economy’s size of $ 5 trillion and the limited tourism and economic benefits of the 17-day games.

In some previous Olympic Games, soaring prices and overcrowding have discouraged tourists rather than attracting them.

“His predictions go against all the research on the financial impact of hosting a” good day “games – and the current global crisis cannot be called a” good day “,” Helen Lenskyj, professor emeritus at the University of Toronto, said in an email.

Lenskyj has written eight books on the Olympic Games, including his most recent – “The Olympic Games: A Critical Approach”. She suggested that Japan would be better off if it didn’t have to fund next year’s games.

“At this point in history,” a very intelligent man “would like his country not to have the added burden of hosting the Olympics,” said Lenskyj.

Japan officially spends $ 12.6 billion on hosting the Olympics, although a government audit report in December says it was twice as much. With the exception of $ 5.6 billion, everything is taxpayer money.

The IOC and Japanese officials say they do not know the cost of the one-year delay, but estimates range between $ 2 billion and $ 6 billion. Almost all of the additional costs are borne by Japan under an agreement signed in 2013 when the games were awarded in Tokyo.

Coates confirmed that the IOC would spend “several hundred million dollars” because of the delay. The funds will go to the international federations and the national Olympic committees in difficulty, and not to Tokyo.

Tokyo Organizing Committee CEO Toshiro Muto called the additional costs “massive” and Coates acknowledged “there will be negative impacts”.

“If Tokyo hopes that a surge in tourism will cover the travel costs of the one-year games, they will probably be very disappointed,” said Victor Matheson, a sports economist at the College of the Holy Cross, in a statement. E-mail.

Matheson and his colleague Robert Baumann calculated the impact of foreign tourism on the 2016 Rio de Janeiro Olympics. They reduced local spending because it was simply a matter of shifting spending from one place in the country to one other.

They said Rio had 60,000 more arrivals and an estimated expense of $ 5,000 per arrival – an impact of $ 300 million.

Rio spent about $ 13 billion to host the Olympics, and some have estimated the figure at $ 20 billion.

Matheson and Robert Baade of Lake Forest College published a 2016 study titled “Going for Gold: The Economics of the Olympics”. They examined the impact of short- and long-term tourism, sports and other infrastructure, employment, trade and the intangible “well-being factor” of hosting the Olympics.

They concluded that “in most cases, the Olympic Games are a waste of money proposition for the host cities; they only generate positive net benefits in very specific and unusual circumstances. “

The IOC and Japanese organizers promised Thursday to remove the frills to curb spending. They are still trying to determine if the 43 Olympic and Paralympic venues will be available next year, and at what cost.

“On the Japanese side, they are assessing the impact of the postponement, including the costs,” said Coates. “These are not questions that will happen quickly. I could not put my finger on when the additional costs will be assessed and carried out. “

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