Tokyo Olympics: fears grow over potential economic blow COVID | Current Affairs in Commerce and Economics

Following last year’s cancellation due to COVID-19, the Olympic Games are launched in Tokyo in five weeks. But as the clock ticks on the opening ceremony, many in Japan continue to question the decision to hold the Games and risk triggering another wave of infections that could derail the country’s fragile economic recovery.

Although foreign spectators were prevented from participating in the Games, the event also attracted athletes and officials from around the world, increasing the risk of introducing new variants of COVID-19 in Japan.

Some public health experts fear the Games could become a “superspreader” event. Last month, the head of Japan’s Medical Union warned that the meeting could also generate a new “Tokyo Olympic” strain of COVID-19.

Japan is on the verge of its fourth wave of COVID-19 infections, and its third declared state of emergency will be released next week.

Although Japan has increased its vaccination campaign, it is far behind other developed countries when it comes to administering vaccines. [File: Pawel Kopczynski/Reuters]

Although the government has increased its vaccination campaign, it is far behind other developed countries when it comes to administering vaccines.

As of Wednesday, just over 6 percent of Japan’s population has been completely vaccinated and less than 10 percent have been partially inoculated, according to Our World in Data.

A growing chorus of voices involving nursing unions, medical associations, leading business leaders including the heads of Rakuten and SoftBank – as well as one of the government’s top medical advisers – have called for the Olympic Games to be postponed again. , or abolished the right to shut down the country’s already widespread health system and keep its economic recovery on track.

Like other nations around the world, Japan saw its economy battered last year by blockchain and COVID-19 restrictions. But its return to pre-pandemic health is lagging behind that of peers. The emergence of viruses has seen its economy change in the first three months of this year as the economy has shrunk by 3.9 percent from the previous quarter, according to the latest government readings.

Although many economists see the country post modest growth in the second quarter, some fear that the recovery will be treated with a severe blow in the event that the Olympics trigger more COVID-19 damage.

“The Olympics could be a catalyst for another round of expansion of that coronavirus spread. That negative impact on the economy could be very huge,” Takahide Kiuchi, an economist at the Nomura Research Institute, told Al Jazeera .

The former Bank of Japan economist estimates that three pandemic-related shutdowns have cost the country 6.4 trillion, 6.3 trillion and 3.2 trillion yen respectively ($ 58.1 billion, 57 million). , $ 2 billion and $ 29 billion).

If the Games cause another wave of infections leading to a state of emergency, Kiuchi said it could cause the economy to shrink again in the last three months of this year.

When weighed against how much revenue the Games could generate – $ 15.1bn to $ 16.4bn, depending on whether national fans fill the seats to capacity – the potential financial cost of going ahead with the Games heralds potential benefits, Kiuchi added. .

Ramen magazine owner Etsuko Yamazaki has struggled to keep his business afloat during the subsequent COVID-19 waves in Japan and would like to see the Olympics canceled rather than risk another spike in infection and restrictions on commercial exploitation. [Courtesy of Yumi Morikawa]

Split businesses

One person who wants to see the Games canceled is Etsuko Yamazaki. The owner of a Ramen shop in Tokyo’s Suginami district, told Al Jazeera that she had resorted to selling her personal belongings to keep her business afloat due to subsequent closures.

The 35-year-old became a celebrity on social media in May after a passerby tweeted a picture of a handwritten sign she had posted outside her magazine that said, “I haven’t received any help from Tokyo, and I’m embarrassed to say that I no longer have private clothes to sell. I’ve reached our limit … customers, please help me. “

The tweet went viral and customers now flashed tags in solidarity. But he fears the relief will only be temporary in the event that the Olympics ignite another wave of COVID-19 and usher in more sapping business restrictions.

“I can’t say we will be okay. If the Olympics worsen the situation, it would be more difficult for us to continue the business,” Yamazaki told Al Jazeera. “All the restaurants and bars are fighting now.”

But not all owners of small and medium-sized businesses are so willing to pull the plug. Motokuni Takaoka is president of the beds supplier in Tokyo and Olympic sponsor Airweave. He estimates his business lost between $ 5m to $ 10m when the Games were relaunched last year, and is looking forward to seeing them move forward this year as planned.

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

The role of the CIO

Some experts have pointed out that it is not Japan but the International Olympic Committee (IOC) that has the legal authority to cancel the Games.

While Japan could break its contract with the CIO, “the costs will be huge,” said Paul O’Shea, a lecturer at the Swedish University of Lund, writing in a Conversation.

As O’Shea points out, even though host cities typically lose money for the Olympics, the CIO makes its income from holding them.

Laura Misener, director of the School of Kinesiology at Western University in Canada, said that with billions of dollars in in-game sponsorship, the CIO is moving forward to ensure its brand is not tarnished.

An overview of the Olympic Stadium (National Stadium) in Tokyo [File: Pawel Kopczynski/Reuters]

“I think the irony of course is the fact that if it doesn’t go well, and they bring it all in, the brand they’re going to walk away from will be as bad as it could be in terms of cancellation. [the] I’m playing at this point, ”he told Al Jazeera.

But others believe there could be a tough political calculation at stake amid media reports that Prime Minister Yoshihide Suga will be able to call a quick election after the Olympics.

The CIO denied Al Jazeera’s request for an interview. The Tokyo 2020 press office, citing time restrictions, was unable to accept Al Jazeera’s request for an interview for this article.

Robert Baade, professor of economics at Lake Forest College in the United States who wrote about the economic impact of the Olympics, gives little credence to the theory that contractual obligations and the threat of massive financial penalties say the Japan’s apparent acquiescence to the CIO on its own.

“I think the Japanese government would want the IOC to take this decision, and they can still blame the IOC,” he told Al Jazeera. “I think if something goes wrong, but given the fact that the Games are unpopular among citizens, then maybe this is a logical thing to do by the Japanese government.”

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