Olympics win gives Japan’s revival a boost
JAPAN’S reputation as a ‘safe pair of hands’ gave it the edge to win the race to host the 2020 Olympics and Paralympics.
The decision immediately boosted investor confidence - despite on going concerns over the Fukushima nuclear crisis which has revealed that radioactive water is leaking into the Pacific Ocean.
Japanese Prime Minister Shinzo Abe assured the International Olympic Committee (IOC) that the Fukushima leak was not a threat to Tokyo and took personal responsibility for keeping the games safe.
Winning the bid gave shares in Japan an instant lift with construction companies, real estate and tourism expecting to benefit from the economic impact of staging the games.
This is expected to create 150,000 jobs and have a US$30 billion economic impact for Japan, equivalent to 0.5 per cent of gross domestic product (GDP), according to an estimate by the Tokyo bid committee.
It is expected to boost the mood of investors spurring Japan’s economic recovery with a redeveloped Tokyo, improved infrastructure and attracting foreign tourists.
The most important factor, apart from measurable economic impact, is the boost the games give to Japanese public sentiment, after two decades of lacklustre growth and the March 2011 triple disaster of earthquake, tsunami and nuclear accident.
Japan experienced an unprecedented high-growth period when it last staged the summer games in 1964, also in Tokyo, and was on the way to becoming the world’s second largest economy.
Tokyo defeated Istanbul, Turkey, in the final round of secret voting by the IOC. Spain’s bid with Madrid was eliminated earlier.
Japan had positioned itself as the reliable choice for host nation at a time of global political and economic uncertainty.
Persistent concerns over the leak of radioactive water from the nuclear plant crippled in the March 2011 tsunami in Fukushima had dogged Tokyo’s bid. The leaks from tanks storing radioactive water used to cool the reactors have added to fears that the amount of contaminated water is getting out of control.
The crippled nuclear plant is about 250 km (155 miles) north east of Tokyo. The IOC was not concerned with Japan’s economic or political situation and had no concerns about its ability to stage the games.
The successful bid, announced on September 7, 2013, has far-reaching domestic and international implications.
Domestically, the Abe government will benefit from years of preparation by previous governments and this lucky break for Shinzo Abe.
Winning the bid will further stabilise his Liberal-Democratic Party government which, after nine months in power, still enjoys public support of about 65 per cent, which has not been achieved by the six previous governments. The LDP’s well-oiled PR machine has immediately begun to emphasise the ‘Abe gets the job done’ message.
The decision is a welcome distraction for the prime minister from the Fukushima nuclear crisis and negotiations about the Trans-Pacific Partnership – a free-trade agreement with the United States – which remains unpopular among the rural population, which is a traditional stronghold for the LDP.
The decision will support the popular belief that Japan’s turn-around has finally begun. It will contribute to the upbeat feeling in Japan since the beginning of Abenomics.
Tokyo’s already overwhelming role in Japan’s politics and economy will increase further. The city, the world’s largest urban agglomeration with a 37 million population and vast economic output, will substantially modernise its traffic infrastructure, including the run-down web of flyovers built for the 1964 Olympics.
The less developed eastern parts of Tokyo will gain dramatically from the Olympic facilities.
Internationally, the vote is as an expression of confidence in Japan and its revival. Mainstream media in the Asia-Pacific often portray Japan as the fallen angel, a country suffering more than any other major industrial nation from the four Ds – high public debt, persistent deflation, bad demographics, and dysfunctional governance.
The IOC decision emphasises that the international community sees Japan as a haven of stability and wealth in a region.
The Olympics are likely to provide an opportunity to play down the territorial issues which have damaged relations between Japan, China and South Korea. The claims and counter claims are likely to level off in the coming years as all three parties understand that they fare much better through cooperation.
The successful bid will also help Tokyo re-position itself as a global megacity after two decades of losing out to Shanghai, Singapore and Seoul.
The Tokyo Olympics will be used to show off Japan’s sophistication to the world.