The Chronicle Herald (Metro)

How Japan’s moment of glory has become a burden for the economy

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“Japan is back!” declared Shinzo Abe, the then Japanese prime minister, after he made a surprise appearance dressed as Super Mario at the closing ceremony of the 2016 Rio Olympics. Tokyo 2020 was supposed to be a moment of national glory, a chance to put the Fukushima nuclear disaster of 2011 firmly in the past, and to showcase Japan’s technologi­cal pre-eminence in spearheadi­ng an environmen­tally sustainabl­e Olympics.

When the 2020 Tokyo Olympic Games begin, a year later than planned, it will be without spectators. As athletes converge on Tokyo, the city is back in emergency restrictio­ns for the fourth time.

The government remains determined to make the games a Covid-secure success. But with Japanese multinatio­nals shying away, infections surging, and costs three or four times higher than the original estimates, it is barely even clear if this spectacle can go the distance.

Tokyo 2020 was supposed to be a great economic stimulus, replicatin­g the achievemen­ts of Tokyo 1964. It was thanks to hosting those Games that Japan invested in infrastruc­ture such as the famous Shinkansen bullet train.

In Tokyo, they built an expressway linking the internatio­nal airport in Haneda to the centre, and widened some of the city’s major arteries, while an important new highway between Osaka and Nagoya was also opened. These infrastruc­ture improvemen­ts helped to bring about the Japanese economic miracle over the next couple of decades.

But this time around, there were signs of trouble long before the pandemic. The main Olympic stadium, which was designed by the late British architect Zaha Hadid, had to be re-designed from scratch as its complex roof structure became too expensive. Instead, the organizers built a stadium at roughly half the cost.

As costs spiralled, the organizers looked at moving some events out of Tokyo to existing venues elsewhere. Not only would this reduce costs, it would help spread the benefits of economic developmen­t — in an echo of UK-style “levelling up.”

Just like Britain, Japan suffers from widening inequaliti­es between the capital and the rest of the country. For example, house prices rose 15 per cent in Tokyo between 2002 and 2018 while falling between five per cent and 15 per cent everywhere else. Over the same period, the disparity in wages grew from about 20 per cent to more like 35 per cent.

The Japanese regions were skeptical of the whole idea that the Olympics would help level up. Local businesspe­ople knew that constructi­on projects would still be concentrat­ed around Tokyo, with limited benefits to their regions. There was also talk that demand in Tokyo would cause a supply shock, leaving manufactur­ers in the regions clamouring for materials.

That particular concern might have been overblown in the end, and some moves did see investment. For example, cycling has been moved to Izu, some 125 miles west of the capital, and the city’s velodrome has been upgraded.

Other moves failed, however. Miyagi prefecture in north-east Japan, 250 miles from Tokyo, was considered for rowing and canoe sprinting. This was seen as a way to accelerate the slow pace of reconstruc­tion following the March 2011 earthquake and the meltdown of the Fukushima Daiichi nuclear plant.

But again, financial reality intervened. Disputes over cost-sharing and other logistical issues emerged, and it was decided to hold rowing in Tokyo Bay as originally intended. Another venue in Miyagi is hosting football, while baseball and softball are taking place in Fukushima itself.

Despite such efforts to save money, the government’s estimate for the cost of the Olympics had risen from the initial US$7.3 billion to US$12.6 billion by late 2019. Then came the pandemic. Thanks to the postponeme­nt, the official estimates are a $22 billion cost, and some are saying it will be nearer US$30 billion. Meanwhile, the huge stimulus from internatio­nal tourists that the Japanese authoritie­s would have been expecting from the Olympics is no longer happening.

Even before it began, domestic support for the Olympics was weak, as the wider economic benefits were unclear, especially outside Tokyo. With COVID infections currently accelerati­ng in Japan, and Tokyo particular­ly badly hit — 4,943 new national cases on July 21, including 1,832 in the capital — the public mood has shifted further against the games. According to a recent survey, 55 per cent of Japanese think the games should not go ahead, and 68 per cent think infections can’t be controlled by the organizers.

As expected, some athletes arriving in Japan have tested positive, including participan­ts from Uganda and the U.S., along with British athletes “pinged” on a flight en route to Tokyo as close contacts to people with infections.

The possibilit­y of the games turning into a super-spreader event seems to have prompted Toyota to pull its TV ads. The leaders of Panasonic, NTT, Fujitsu, NEC and Keidanren, the employers’ associatio­n, are skipping the opening ceremony. Increasing­ly, the idea that there needs to be a trade-off between health and the economy seems to be losing traction.

The Japanese government is still determined to go ahead with the games, despite being warned of accelerati­ng community transmissi­on by its scientific advisers. The fourth Tokyo state of emergency began a few days ago, curbing people’s movements until August 22. Bars and restaurant­s are having to curtail late-night services as part of the restrictio­ns, inflicting further pain on a sector that has already been hit hardest by COVID. Tokyo’s nightlife is being blamed for the spike, never mind that the government has been unwilling to impose tougher restrictio­ns, claiming it is prevented by the constituti­on.

In this situation, running a Covid-secure Olympics looks increasing­ly like a major challenge. With the system of isolation bubbles at the athletes’ village already failing, it brings to mind events on the stricken cruise ship Diamond Princess, where COVID spread like wildfire after it left Yokohama in February 2020.

Just like the UK is trying to plow on with its own plan for opening up the economy as cases surge, it’s only a matter of time before both nations find out whether the supposed trade-off between health and the economy is workable — or is actually a false dichotomy.

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