ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Olympics have potential to benefit Japan
Publication Date : 01-03-2013
With the International Olympic Committee's on-site inspection scheduled to start Monday, Tokyo's bid for the 2020 Summer Games has put economic spillover effects as well as the city's fiscal power under the spotlight.
Though economic spillover effects are not on the IOC's inspection checklist, they are believed to be a strong determinant of the success of an Olympics.
Areas near Shibuya Station in Shibuya Ward, Tokyo, have had numerous posters on display advertising the city's bid to host the 2020 Games since last month. Many banners bearing the bid logo decorate passages leading to large commercial facilities.
There is also an electronic billboard displaying a countdown until September 7, when the IOC will decide on the host city at its general assembly.
The displays were organised by Tokyu Corp. and the Tokyo Chamber of Commerce and Industry.
Tomonori Sugisaki, chief of the chamber's division for urban policy affairs, said, "If Tokyo is chosen to host the Olympics, it will attract attention worldwide until 2020, when the Games are held".
Akio Mimura, an advisor for Nippon Steel & Sumitomo Metal Corp., also mentioned the Olympic bid in his speech about how to regain Japan's vigor at a session of the Yomiuri International Economic Society forum held Wednesday.
"It's a project that can energise the public. I desperately hope the bid will be successful and be actively utilised for revitalising Japan," he said.
According to estimates by the Tokyo metropolitan government and other entities concerned, if the Tokyo Olympics are realised, it will directly increase demand by 1.22 trillion yen in such fields as tourism, sales of Olympic-related goods and household spending, for example in purchases of new TV sets.
The estimates indicate the total economic effects will come to 3 trillion yen nationwide if private-sector investments are factored in.
Hotels and other service sectors stand to gain the most from the Games, with an estimated 651 billion yen in benefits predicted. The construction industry is poised to gain 474.5 billion yen, partly due to the new sports arenas that must be built.
The estimates also forecast that 150,000 new jobs will be created.
Prof. Katsuhiro Miyamoto of Kansai University, a researcher of theoretical economics who is famous for his studies on the economic effects of professional baseball championships, said, "Because private-sector investment causes nationwide spillover effects, the benefits will actually be much higher [than stated in the estimates]."
Tokyo Gov. Naoki Inose said, "Hosting the Olympics can help eliminate the public's 'deflation mindset' and lead to an escape from deflation."
As part of the 2020 Olympics in Tokyo, preliminary soccer games are scheduled to be held in other regions, including areas devastated by the Great East Japan Earthquake. It is also expected that several national teams will establish training camps throughout Japan ahead of the Games.
Thus the economic repercussions in areas other than Tokyo are estimated to be valued at 1.3 trillion yen.
Before the start of the Tokyo Marathon on Sunday, the governors of Tokyo and three other prefectures met and vowed to cooperate on making their bid for the 2020 Games successful.
Construction projects and improvement of infrastructure are proceeding on the assumption that the bid for the 2020 Olympics will be successful.
Three circular roads extending from Tokyo that are expected to ease the flow of traffic--the Central Circular Route of Shuto Expressway, the Tokyo Gaikaku Circular Route and the Metropolitan Inter-City (Ken-O) Expressway--are only 60 percent complete as of now.
The government and other entities concerned aim to raise the figure to at least 90 per cent by fiscal 2020. They also plan to improve aged expressway routes that were hastily built for the 1964 Tokyo Olympics.
Many additional large-scale projects have been proposed for the 2020 Tokyo Olympics, such as construction of a new national stadium.
In the metropolitan government's plan, about 430 billion yen of the about 730 billion yen total budget for hosting the Games will be spent on construction or improvement of facilities.
The planned Olympic Village will be converted and sold as private housing after the Games. Because funds from the private sectors will be used in the construction, the metropolitan government said the actual burden on public funds will be about 310 billion yen.
Additionally, it has been decided that the National Stadium, which has aged significantly, will be rebuilt regardless of the outcome of the Olympic bid.
The cost of hosting the 2020 Olympics will also be supported through ticket sales and advertising revenue.
Thus an official of the metropolitan government said: "The net public spending for hosting the Olympics will be about 150 billion yen. As the facilities will still be functional after the Games, the expenditures will not be a waste."