Tokyo Olympics – Can Japan afford cancellation of the games? The restrictions and state of emergency in several prefectures due to Japan’s fourth wave of COVID-19 have started taking a toll on the country economy as its GDP (gross domestic product) contracted by 1.3% in the first three months of 2021 alone. Despite public opinion going against Tokyo Olympics, the Japanese government will now be going ahead with the games to boost the economy as the government is due to contest an election next year.
The contraction is more than 5% annually and has erased the improvements Japan made in the last quarter. As Japan posted a 4% annual fall in GDP in 2020, the last quarter’s performance made a positive change despite the fact that Tokyo Olympics was postponed.
Tokyo Olympics: How is an Olympics linked to country’s GDP?
Tokyo Olympics – Japan Economy Shrinking: A large-scale sporting event helps the tourism sector as well as the business sector bloom due to a flood of international athletes and fans visiting the country. From local business to multinational companies and TV networks all contribute to the economy during such events. Olympics being the grandest event on planet Earth, it could have set Japan’s ailing economy straight after the COVID-19 pandemic ravaged it.
However, the decision to not allow overseas spectators and the prospect of holding the games in closed doors could incur further losses for the country. The Tokyo Olympics is already the most expensive summer games ever with an estimated expenditure of over $25 billion. However, that cost as expected has increased further as the stadiums and other facilities had to be maintained for a year without the games in 2020.
Furthermore, the cost is expected to increase manyfold as thousands of athletes will arrive in two months’ time needing regular testing, medical arrangements due to bio-secure bubbles and other pandemic-induced measures.
Tokyo Olympics: Increasing dissent over Summer Games
In 2019, Japanese people were excited about the Olympics but the perception has changed drastically due to the pandemic. As per a recent poll, over 80% of Japanese do not want the Tokyo Olympics to go ahead or be held in 2021. Over the last few months, the dissent has only grown with protests taking place outside the National Stadium during a test event and IOC’s visit.
With a slow roll-out and only 2% vaccination, Japanese people are nervous and concerned about the prospect of thousands of athletes, officials, support staff and others coming into Japan from countries with virulent strains like the UK, India and South Africa.
Despite IOC and the Japanese government’s assurance, the situation hasn’t changed much with an online petition that calls for cancelling the games garnering half a million votes in just nine days.
Tokyo Olympics: Japan can’t afford Tokyo Olympics Cancellation!
However, with the economy in freefall and surging cases mean further restrictions, it stares at further contraction. Hence, with a general election coming next year, the Japanese government, led by newly appointed Prime Minister Yoshihide Suga, would do anything to go ahead with the Olympics and minimize the losses.
Same is the case with International Olympic Committee, who at any cost wants Olympics to go ahead. For IOC, TV rights and advertising revenues is oxygen to survive and thrive for the next 4 years cycle, hence, even they have been putting pressure on the Japanese government to go ahead with the Tokyo Olympics at any cost.
“No, there’s not (chance of postponement). The prime minister of Japan said that to the president of the United States two or three weeks ago. He continues to say that to the IOC. We’re working with Japanese Prime Minister Yoshihide Suga on all of the safety measures. It’s going ahead,” IOC’s Vice-President John Coates told AFP last week.