Tokyo 2020: A $15.4 Billion Nightmare 

Less than a year after his appointment as Prime Minister of Japan under the rule of Emperor Naruhito, Yoshihide Suga (72) has announced that he will resign on Sept. 30, 2021, leading the country into new elections. The current P.M. had been chosen to replace Shinzo Abe, a central figure in Japanese politics and former premier, who disrupted the international scene by resigning due to important health concerns in August 2020. 

Mr. Suga, known for his behind-the-scenes figure in the country’s leading Liberal Democratic Party, has had enormous difficulties on multiple fronts during his short experience as head of government. These troubles include his lack of popularity, his reaction to the ongoing COVID-19 pandemic, a relatively slow vaccine rollout and, eventually, the disastrous financial costs related to the Tokyo 2020 Olympic Games. 

Although Japan was among the first nations to experience COVID-19 outbreaks, its rising health awareness, increasing life expectancy and prompt governmental action managed to keep infections and deaths to a much lower level when compared to other wealthy, industrial nations, totaling 1.5 million cases and 16,369 deaths over a population of 126.3 millions. Despite such a successful response to the pandemic, Suga’s government has not been as successful in delivering COVID-19 vaccines to the general public, with only 58% of the population having received at least one vaccine dose, as well as a 31% decrease in vaccination rates when compared to last week. This conflicting data, when looking at the international community as a whole, puts Japan in a position of relative weakness.

When Tokyo was chosen to host the XXXII Olympic Games in 2011, Japan was far from expecting a global pandemic, as the country was dealing with the aftermath of a massive magnitude 9.0 earthquake that caused 15,897 deaths. Ten years later, the only certainty was the uncertainty surrounding the future of the Games. The general consensus over whether to postpone or maintain the Games was clear: the Japanese population was 83% against proceeding as planned. Despite such an important response from the taxpayers who made these Olympiads a reality, the government and the national Olympic Committee took the most dooming, unpopular decision. 

There is no doubt that the Games were a logistical and financial nightmare. While the world was able to see its teams and players win medals and compete against one another, the country that managed to turn this dream into a reality is left to deal with a $15.4 billion bill in an economic environment that left its mark with a -4.8% GDP growth rate as of March 2020. All but $6.7 billion came from taxpayer funding. While the Olympic Games are often portrayed as beneficial for the hosting country, there is no data that corroborates that, as suggested in a recent AP article. What economists are certain about, however, is that the costs of hosting the games have been constantly increasing throughout the years, generating doubt and uncertainty surrounding the future of such a staple event in the world of sports. If the International Olympic Committee (I.O.C.) wants to keep generating the revenue that keeps it functioning, it must start thinking about functional and smart solutions so that hosting the future Olympic Games won’t be a burden to the host country, but simply a synonym of international pride and success.