ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

Why canceling the Olympics would be good for Japan's economy

If the games must go on, they should be completely free of spectators

| Japan
Could there be a miracle vaccine by then?   © AP

William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."

The list of nations having a good 2020 is spectacularly short. But Turkey warrants a mention as it observes the Summer Olympics fiasco warping Japanese politics.

In 2013, Istanbul was the overwhelming favorite to host the 2020 Games. It was to be the first time the Olympic torch burned in the Middle East. Somehow, though, Tokyo came in just under the wire to snatch the event.

And has come to regret it terribly as COVID-19 forces Japan to plan a 2021 Games amid a once-in-century pandemic now staging a second wave. Is it not time the International Olympic Committee accept reality and cancel? And time Japan admit that scrapping the Games would actually help its economy?

Bear with me here.

As of now, Tokyo and the IOC are planning a socially-distanced affair starting July 23. The hope is that (a) a vaccine will be widely available, (b) smartphone apps save the day and (c) Tokyo 2021 will not be a super-spreader nightmare that posterity deems insane. Yet why should 126 million Japanese accept the role of lab rats in an experiment ripe with the stench of hubris?

IOC President Thomas Bach is in Tokyo this week to review preparations. Let us hope he and Japanese Olympic Committee officials review geopolitical reality, too.

If the Olympics must go on, they must be held completely free of spectators. It is fanciful to think millions of overseas visitors will not import more COVID-19. It is fanciful to believe there could be anything but a terrible ending to those millions of tourists mingling, eating, drinking, cheering and crowding temples, shrines and Shibuya crossing. Social-distancing fatigue already has COVID-19 staging a comeback, never mind 249 days from now.

Could there be a miracle vaccine by then? Perhaps, but thinking it can be deployed widely and efficiently enough in eight months seems as farfetched as Donald Trump winning gold in the 100-meter sprint. Banning spectators is the best insurance against an unforced public health disaster.

There are two common arguments why canceling the Tokyo Games is a non-starter. One, Japan might lose face. Two, the economic fallout is just too great. The first excuse is silly. Why would anyone blame Tokyo for a deadly pandemic that makes a bunch of sporting events seem trivial by comparison?

The second is its own canard. Sure, Japan invested epically in Tokyo 2020. The initial $7.3 billion budget has long-jumped to at least $25 billion. More even, as we taxpayers foot the bill for the many billions it is costing to delay things. And yes, sponsors will be very disappointed. Toyota Motor, Coca-Cola, Alibaba Group, Visa, Samsung Electronics and other corporate behemoths will miss their VIP rooms and cocktails parties with top clients.

But the loss that really matters -- after human life, of course -- is what economists call opportunity cost. To what extent, in other words, has obsessive attention to a few weeks of festivities distracted Japan's government from bigger pursuits like lumbering up the economy? Greatly, actually. One reason why former Prime Minister Shinzo Abe's reform process flopped is that he figured the Olympic Games were the reform.

This gets into magical thinking dating back to Tokyo 1964, when Abe's grandfather Nobusuke Kishi procured the Olympics during his prime minister days. It was Japan's postwar comeback party. Tokyo wowed the globe with new bullet trains, neon-lit skylines and futuristic stadiums.

The opening ceremony for the 1964 Tokyo Summer Olympic Games: it was Japan's postwar comeback party.   © Getty Images

Tokyo 2020 was a ploy to recreate that hopeful moment. To wash away 20 years of deflation and remind planet Earth that Japan is Asia's preeminent power, not China. Trouble is, the world had already discovered Japan, a top destination with or without the Olympic torch. Conde Nast and TripAdvisor have gushed about Kyoto, Kagoshima, Kanazawa and Tokyo's tuna auctions for years.

Abe could have busily modernized labor markets, cut bureaucracy, catalyzed a startup boom and made "womenomics" more than just a marketing campaign for his Liberal Democratic Party. Instead, the vast majority of the LDP's attention focused on pulling off a great Olympics.

Never mind that the most tangible legacies of the modern Olympics is record-breaking debt and graft. In Japan's case, it also means seven years of distraction neither Abe nor current leader Yoshihide Suga can get back.

It is hard to discern exactly when heavy lifting on reforms got conflated with Tokyo 2020. The government came to assume, though, that Olympics glitz would on its own make companies more competitive and productive, modernize Tokyo ministries, reawaken Japan's innovative spirit to create tech unicorns, attract foreign talent, improve English proficiency and address the mismatch between rising-debt and shrinking-population.

These problems, and myriad others, will remain long after the IOC's five-ringed circus leaves town. Odds are, so will COVID-19. Like athletes training for a comeback, viruses evolve and mutate to thrive another day. No doubt, Japan's institutions and health care system are better equipped for 2021 than Turkey's might be. Yet host city Tokyo should think very carefully about welcoming multitudes of human hosts who help make the coronavirus a never-ending marathon around the globe.

Likewise, Japan must overcome distraction and get the third-biggest economy in shape to engineer a true revival. Not just stage one.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more