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Will the 2020 Olympics Really Help Tokyo?

Hosting major events like the Olympics brings some well-known issues. Tokyo would be wise to address them now.

By Tony Roshan Samara and Elleka Watts for

The International Olympic Committee’s (IOC) decision earlier this month to allow Tokyo to host the 2020 Summer Olympics was greeted with jubilation across Japan, and earned the nation congratulations from around the globe. To many, the upcoming 2020 Games will provide a much-needed boost for the economy and the country’s morale, similar to the role played by the 1964 Tokyo Olympics. Touching on these sentiments, Prime Minister Shinzo Abe predicted that hosting the 2020 Olympics would be an “explosive agent” for the national economy and would place Tokyo at “the center of the world.”

The celebratory rhetoric is understandable, but the promises made, particularly those involving tangible costs and benefits, demand a more sober scrutiny, even as the champagne corks pop. With the event itself years away, there are few repercussions for those who promise the moon today if, almost a decade later, their assurances prove to be hollow. The consequences for residents of the city, however, can be substantial.

Aside from worries about the Fukushima nuclear plant leak, there are at least three other challenges Tokyo will confront as event preparations begin in earnest, and which have bedeviled other host cities. These involve debt accumulation, infrastructure construction and post-event utilization, and finally, concerns about residential displacement and deepening inequality.

Debt

Increasing attention to costs and benefits in recent years is due in large part to the noticeable shift towards awarding major events to countries struggling with poverty and inequality. India, China, and South Africa have each held events in recent years, and Brazil will soon host both the World Cup (2014) and Olympics (2016). Yet, as we saw with London in 2012, the global recession and a turn towards austerity policies have made spending large sums of money on short-term events more difficult to sell than in earlier years, even in wealthy nations. A boost in status alone is no longer sufficient justification, and proponents – as with the case of Abe earlier this month – increasingly must frame these events as economic opportunities that will generate profit and contribute to the development of the host city.

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While this shift encourages a welcome scrutiny of the economic value of major events, it is in fact notoriously difficult to make a meaningful calculation of total expenditure versus total revenue, especially years before the event takes place. Pre-event estimates of costs, in many cases from reports commissioned by government agencies, are filled with rosy predictions and often read like public relations documents. Years of research, on the other hand, reveal how often these reports vastly underestimate the costs and inflate the benefits of the event.

As Kevin Rafferty recently reported in The Japan Times, initial estimates for the cost of the London Games hovered around £2.4 billion yet in the end reached almost £9 billion. Estimates for the 2014 winter games in Sochi began at around $12 billion but are now predicted to hit $50 billion. Two recently concluded events demonstrate just how misleading early predictions can be. Official estimates for the 2010 World Cup in South Africa began at $500 million in 2004, but in the end the cost reached almost $5 billion. And the 2010 World Expo in Shanghai was originally estimated to cost $4.2 billion, but by some post-event calculations eventually exceeded $50 billion. Addressing the Olympics, Rafferty notes: “Cost overruns for the Olympics have averaged 179 percent since 1960, and most games have made losses or tiny profits.”

The issue of revenue is equally important for assessing costs versus benefits. These too have a tendency to disappoint. A report from 2010 on the recently concluded America’s Cup race in San Francisco, commissioned by the city, made what it repeatedly called a conservative estimate that the race would lead to increased economic activity totaling $1.4 billion. This was a conservative estimate compared to the $9.9 billion estimate from earlier reports but even so it is unlikely the event generated anything close to that amount. The current official word on the London Olympics from the Organising Committee is that the 2012 games will only break even.

Tokyo’s bid came in at about $5 billion, and according to reports, most of that is already tucked away. Be that as it may, the reality is that ten years from now the original bid is very likely to be meaningless. Or as Adam Taylor put it for Business Insider, “That number is almost certainly complete nonsense.” Once the award has been made, according to an expert cited in Taylor’s story, a “blank check” has effectively been issued, as host governments are legally obligated to cover any cost overruns. As a result, even with reasonable and honest estimates at the outset, keeping costs under control will be a real challenge.

Infrastructure

The second challenge confronting Tokyo involves infrastructure: what will be built, who will build it, and how will it be used (and paid for) after the event? All too often, host cities build expensive stadiums, pavilions, Olympic parks and other costly infrastructure that turn into “white elephants” once these events have come and gone.

Both China and South Africa, for example, have encountered problems with keeping stadiums filled after their respective mega events. Beijing’s Birds Nest Stadium, designed by acclaimed artist, Ai Wei Wei, is capable of holding over 90,000 people, but is by many accounts underutilized and falling into disrepair.

Optimists point to the fact that Tokyo will be an exception to the infrastructure trap simply because it plans to reuse some of the older venues originally built for the 1964 Olympics. The IOC even declared Tokyo as a “safe pair of hands” to entrust the Olympic bid to for this reason. However, just because some venues are being reused does not mean that these renovation projects will not be expensive. The national stadium renovation costs alone are already estimated to be 130 billion yen (approx. $1.3 billion USD), over 20 percent of the entire budget according to the bid submitted to the IOC.

Additionally, according to the bid, only 15 out of the 35 proposed venues for the event currently exist, meaning taxpayers will likely have to fund the construction of (at least) another 20 venues and potentially take financial responsibility for them after 2020.

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Olympics-related construction will also require a massive labor force, often for many years and working at an accelerated pace to meet strict deadlines. Labor abuses, particularly of migrant workers, have been a bane of grand events for decades. There is an ongoing campaign to strip Qatar of the 2022 World Cup in large part because of the state’s treatment of its migrant workers, dozens of whom have died while working on World Cup projects. Qatar may not be representative of how workers are treated, but abuses tied to these events is by no means unusual, and have been documented in the run up to 2010 events in China, India and South Africa, as well as in the ongoing preparations for the 2014 Olympic Games in Russia.

Most references thus far to construction work for the 2020 games have been in relation to job creation, but the likelihood that Japan will also have to import workers to meet the infrastructure needs of the Olympic Games is cause for concern, and the issue bears close monitoring.

Once the event is concluded, the issue of how to make efficient use of expensive venues and other infrastructure remains. In many cases, the visions that host cities have for their post-game urban landscape usually end up being very different in reality once the time comes. To avoid the financial and political burden that comes with ”white elephants,” Tokyo’s organizers will have to find a way to utilize the expensive new and renovated infrastructure after the Olympics are over. Those are plans best made now, rather than later.

Residential Displacement and Urban Inequality

Decisions about spending priorities and infrastructure development should be understood not simply as questions of finance, but also as reflecting broader conflicts around the use of resources and urban space. Major events like the Olympics have come under criticism for their role in exacerbating existing inequalities within host cities. To many critics, event preparations become part of efforts by policymakers and more affluent groups to implement a more comprehensive overhaul that leads to the destruction of historic districts, the razing of lower income neighborhoods, and the displacement of less affluent residents to the urban periphery.  

The result is often increased polarization and segregation. And while major events like the Olympics do not drive these transformations, they can accelerate them due to the unbending schedule they impose on a city, and obscure them behind the celebratory atmosphere of a successful bid and the pressure to avoid controversy as a matter of national pride.

Mass evictions are perhaps the most infamous example of how cities are transformed in preparation for events, particularly after the well-publicized evictions of over one million people in Beijing before the 2008 Olympics. But mass event-related evictions are endemic and an integral part of their history: 30,000 people were displaced by the 1996 Atlanta Olympics, and 720,000 by the 1988 Seoul Olympics. More recently, at minimum 200,000 were evicted in New Delhi as a result of the 2010 Commonwealth Games and reports of evictions in Brazil have already earned the condemnation of human rights organizations. The issue has become urgent enough for the United Nations Human Right Council to adopt a resolution on housing rights in the context of these events.

Some of Tokyo’s marginalized residents are already raising concerns about evictions and the impact on existing neighborhoods of development projects required for the event. Various media outlets have reported the unfortunate case of Mr. Kohei Jinno, a 79-year old Japanese man who was evicted from the 1964 games and will be asked to relocate again for the 2020 games because of the proximity of his apartment to the national stadium renovation project. Mr. Jinno, along with 200 other residents (a third of whom are senior citizens), will be moved to three other apartment complexes elsewhere in the city, but many of these residents are concerned about leaving their livelihoods and being able to readjust in a new neighborhood at such an advanced age.

Mr. Jinno told reporters how he has come to hate the Olympics, “It's like they're taking away the most precious thing I have after my family,” he said, “Because of the Olympics I'm going to lose the community I love so much, the friends that have kept me going so long… In their place I'm getting uncertainty, loneliness and pain.”

Examples such as this must be understood not only in relation to the experiences of previous host cities, but also against the backdrop of growing inequality and segregation in Tokyo, including an emerging wealth gap between certain inner city wards and the rest of the city.

Whether Olympic preparations will accelerate these trends or not is an open question, but if the past is any guide, chances are good the city will emerge from 2020 more expensive, more unequal and more segregated. The ability of Tokyo to substantially alter this trajectory is at this point limited. But the city can commit to genuine and sustained efforts to address the many challenges being a host city imposes on its residents, and show the world that a different Olympic legacy is possible.

Tony Roshan Samara is an Associate Professor of Sociology at George Mason University. Elleka Watts is an Editorial Assistant at The Diplomat.