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Tokyo Olympics: Worries about a potential COVID economic blow intensify | Business and Economic News

After being cancelled due to COVID-19 last year, the Olympics will open in Tokyo in five weeks. But as the opening ceremony approaches, many Japanese continue to question the decision to host the Olympics and may trigger another wave of infections, which may undermine the country’s fragile economic recovery.

Although foreign spectators are prohibited from participating in the Olympics, the event will still attract athletes and officials from all over the world, increasing the risk of new variants of COVID-19 being introduced into Japan.

Some public health experts worry that the Olympics may become a “super spreader” event. Last month, the head of the Japan Doctors Union warned that the gathering might even produce a new “Tokyo Olympics” COVID-19 strain.

Japan is in the declining phase of the fourth wave of COVID-19 infections, and its declared third state of emergency will be relieved next week.

Although Japan has stepped up its vaccination efforts, it still lags far behind other developed countries in terms of vaccination. [File: Pawel Kopczynski/Reuters]

Although the government has stepped up its vaccination efforts, it still lags far behind other developed countries in terms of vaccination.

According to our data world, as of Wednesday, only over 6% of the population in Japan is fully vaccinated, and less than 10% of the population is partially vaccinated.

More and more voices are getting louder and louder, and well-known business leaders including the nurses’ union, medical associations, and heads of Rakuten and Softbank-even a top medical consultant in the government-are calling for another postponement The Olympics may be cancelled directly to protect the country’s already stretched healthcare system and keep the economic rebound on track.

Like other countries in the world, Japan’s economy last year was severely hit by the COVID-19 blockade and restrictions. But it has returned to its pre-pandemic health and lags behind its peers. According to the latest government data, when the economy shrank by 3.9% from the previous quarter, the rebound in the virus emergency stalled in the first three months of this year.

Although many economists believe that the country will achieve moderate growth in the second quarter, some worry that if the Olympics cause more damage to COVID-19, the recovery may be severely hit.

“The Olympic Games may become a catalyst for a new round of expansion of the spread of the coronavirus. This negative impact on the economy may be huge,” Takahide Kiuchi, an economist at the Nomura Research Institute, told Al Jazeera.

The former Bank of Japan economist estimated that so far, the three pandemic-related shutdowns have cost Japan 6.4 trillion, 6.3 trillion and 3.2 trillion yen (US$58.1 billion, US$57.2 billion and 29 billion respectively). US dollars).

Kiuchi said that if the Olympics triggers another wave of infections and leads to a state of emergency, it may cause the economy to shrink again in the last three months of this year.

Kiuchi added that when weighing how much revenue the Olympics can generate—$15.1 billion to $16.4 billion, depending on whether or not domestic fans fill up the stadiums—the potential financial cost of hosting the Olympics dwarfs the potential benefits.

Ramen shop owner Etsuko Yamazaki has been struggling to maintain her business during the continuous wave of COVID-19 in Japan. She hopes to see the Olympics cancelled instead of risking another infection peak and business weakening. [Courtesy of Yumi Morikawa]

Business split

One person who wants to cancel the Olympics is Yamazaki Etsuko. As the owner of a ramen shop in Suginami Ward, Tokyo, she told Al Jazeera that she had sold personal belongings to maintain her business during the continuous lockdown.

In May of this year, a passerby posted a photo of a handwritten placard she posted outside the store on Twitter, which read: “I didn’t get any assistance from Tokyo. I’m embarrassed to say that I don’t have more. Personal items can be sold. I have reached our limit…Customers, please help me.”

This tweet went viral on the Internet, and customers are now sipping noodles in unison. But she worries that if the Olympics triggers another wave of COVID-19 and introduces more restrictions that weaken business, this relief will only be temporary.

“I can’t say that we will be fine. If the Olympics make the situation worse, it will be difficult for us to continue our business,” Yamazaki told Al Jazeera. “All restaurants and bars are struggling now.”

But not all small and medium business owners are so keen to unplug. Motokuni Takaoka is the president of Tokyo-based bedding supplier and Olympic sponsor Airweave. He estimated that his company lost 5-10 million U.S. dollars when the Olympics were postponed last year, and he would love to see the Olympics this year proceed as planned.

“If the Olympics are held, we need to support it,” he told Al Jazeera.

The role of the International Olympic Committee

Some experts pointed out that it is not Japan that has the legal power to cancel the Olympics, but the International Olympic Committee (IOC).

Paul O’Shea, a senior lecturer at Lund University in Sweden, wrote that although Japan may terminate its contract with the International Olympic Committee, “the cost will be huge.” conversation.

As O’Shea pointed out, although the host city usually loses money at the Olympics, the income of the International Olympic Committee comes from hosting the Olympics.

Laura Misener, dean of the School of Kinesiology at Western University of Canada, said that due to billions of dollars in sponsorship, the International Olympic Committee is working hard to ensure that its brand is not tarnished.

Panorama of Tokyo Olympic Stadium (National Stadium) [File: Pawel Kopczynski/Reuters]

“Of course, I think the irony is that if it doesn’t go well and they do bring everyone there, then the brand they are leaving will be much worse than it is now. Cancellation clause [the] The game at this time,” she told Al Jazeera.

But others believe that there may be a stubborn political calculation when the media reports that Prime Minister Yoshihide Suga may hold an early election after the Olympics.

The International Olympic Committee rejected Al Jazeera’s request for an interview. The Tokyo 2020 Press Office was unable to meet Al Jazeera’s request for interviews for this article due to time constraints.

Robert Baade, an economics professor at Lake Forest College in the United States, once wrote about the economic impact of the Olympics. He hardly believes that contractual obligations and the threat of huge financial penalties are determining Japan’s acquiescence to the International Olympic Committee. Regarding whether to cancel.

“I think the Japanese government wants the IOC to make this decision. They can always blame the IOC,” he told Al Jazeera. “I think if something goes wrong, but considering the fact that the Olympics are not popular among citizens, then maybe it is logical for the Japanese government to do so.”

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