Olympics should cher­ish merit of cost con­trol

China Daily (USA) - - VIEWS -

The Olympic Games cel­e­brates strug­gle for ex­cel­lence, not costs. As more emerg­ing economies are host­ing the Olympics, it is time to re­call the Olympic Creed.

When Brazil won the right to host the Sum­mer Olympics six years ago, its econ­omy was boom­ing af­ter years of for­mer pres­i­dent Luiz Ina­cio Lula da Silva’s suc­cess­ful eco­nomic poli­cies. To­day, the Brazil­ian econ­omy is strug­gling amid its worst re­ces­sion since the 1930s.

But the eco­nomic fall of Brazil as host coun­try is only part of the big pic­ture. The other part has to do with cost over­runs. The ini­tial cost of or­ga­niz­ing the Rio Olympics was es­ti­mated at $2.8 bil­lion. The cur­rent bud­get is closer to $5 bil­lion. But the to­tal Olympic bud­get, ini­tially es­ti­mated at $12 bil­lion, is closer to $20 bil­lion— more than 22 times what Brazil is spend­ing to con­tain the Zika virus.

Worse, cost over­runs have been the rule of Sum­mer and Win­ter Olympics since the 1960s.

When the first mod­ern Olympic Games was held in Athens in 1896, the final bill was $10 mil­lion in to­day’s money. With ex­pen­di­tures climb­ing since the 1970s, cost over­runs have of­ten meant sub­stan­tial so­cial losses. The Mon­treal 1976 Olympics is a case in point. The Cana­dian city spent the next three decades pay­ing off the multi­bil­lion dol­lar bill.

The Barcelona 1992 Olympics ($9.7 bil­lion cost, 266 per­cent cost over­run) andAthens 2004($3 bil­lion, 49 per­cent cost over­run) con­trib­uted to soar­ing debts in SpainandGreece.

In the case of the Sum­mer Olympics, only fe­whosts— Bei­jing in 2008— have man­aged to keep the cost over­run low. The cost of the London 2012 Games was $15 bil­lion, with the cost over­run be­ing 76 per­cent.

The Win­ter Olympics started in France in 1924. For nine decades mainly ad­vanced economies hosted the Win­ter Games, with some host­ing it twice or more (in­clud­ing Switzer­land, the United States and Ja­pan).

Mex­ico be­came the first emerg­ing econ­omy to host the Sum­mer Games in 1968, fol­lowed byMoscow in 1980 and Bei­jing in 2008. The past decade sawthe Olympic torch shift­ing from ad­vanced to emerg­ing economies. The trend will con­tinue as SouthKorea and China will host the 2018 and 2022 Win­ter Games. There are three prob­a­ble fu­ture sce­nar­ios for the Games. In the “dead-end sce­nario”, the Olympics will con­tinue as be­fore. In that case, soar­ing costs and cost over­runs will vir­tu­ally en­sure the Games is held mainly and re­peat­edly in pros­per­ous economies, or in a fewlarge emerg­ing ones. In weaker economies, the Games are vul­ner­a­ble to fur­ther eco­nomic ero­sion and so­cial di­vi­sion. In the “cost­con­trol sce­nario”, suc­cess­ful plan­ning, rig­or­ous cost-con­trol and abil­ity to re-pur­pose the Olympic fa­cil­i­ties will play the key role. But the Games will stay mainly in those fe­wad­vanced or emerg­ing economies that are will­ing and able to foot the bill.

In the “mul­ti­po­lar sce­nario”, ex­ces­sive ex­pen­di­ture will be con­tained not just through plan­ning and cost-con­trol but co­op­er­a­tion. To­day, the Olympics is held in sev­eral cities of one coun­try. In this sce­nario, it could be held across mul­ti­ple cities in one re­gion, say, in Africa, the Amer­i­cas, South and South­east Asia, and theMid­dle East. In this way, smaller and emerg­ing economies, along with larger ones, could host a mul­ti­po­lar and more in­clu­sive Olympics.

Ac­cord­ing to the Olympic Creed: “The most im­por­tant thing in the Olympic Games is not to win but to take part, just as the most im­por­tant thing in life is not the tri­umph but the strug­gle. The es­sen­tial thing is to have fought well.”

It is not the size of the sta­di­umthat mat­ters but our abil­ity to dream and the quest for ex­cel­lence. The au­thor is a guest fel­low at Shang­hai In­sti­tutes for In­ter­na­tional Stud­ies. This ar­ti­cle is based on his SIIS project on “China and the mul­ti­po­lar world econ­omy”.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.