Tokyo Olympics: fears over COVID’s potential economic blow Business and Economic News

Following the cancellation of COVID-19 last year, the Olympics will begin in Tokyo in five weeks. But as the clock ticks at the opening ceremony, many in Japan continue to question the decision to hold the Games and continue to risk releasing another wave of infections that could prevent the country’s fragile economic recovery.

Although foreign spectators have been banned from attending the Games, the event will attract athletes and officials from around the world, increasing the risk of new COVID-19 variants entering Japan.

Some public health experts fear that the Games could become a “superspreader” event. Last month, the head of the Japanese Medical Union warned that the rally would create COVID-19 “Tokyo Olympics”.

Japan is down the slope of the fourth wave of COVID-19 infections, and the declared third state of emergency will be alleviated next week.

Although the government has stepped up its vaccination campaign, it is lagging behind other developed nations when it comes to administering vaccines.

As of Wednesday, just over 6% of Japan’s population was fully vaccinated and less than 10 percent were partially inoculated, according to data from Our World.

The nurses ’union, including the medical association, the heads of Rakuten and SoftBank, and the voices of one of the government’s top medical advisers are increasingly gathering to postpone or completely cancel the Olympics. to keep the country’s already extended health system and its economic rebound on track.

Like other nations around the world, Japan’s blockade and restrictions on COVID-19 looked very bad on its economy last year. But the return of the pandemic to pre-health has lagged behind that of its peers. Virus emergencies slowed their rebound in the first three months of this year, when the economy shrank 3.9% from the previous quarter, according to a recent government reading.

Although many economists see the country as experiencing low growth in the second quarter, some fear that the recovery could be a severe blow if the Olympics could release more damage to COVID-19.

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

The former Bank of Japan economist estimates that the three pandemic-related shutdowns have so far cost the country 6.4 trillion, 6.3 trillion and 3.2 trillion yen ($ 58.1 million, $ 57.2 million and $ 29 million).

If the games trigger another wave of infection that is causing a state of emergency, Kiuchi said it could lead to a shrinking economy in the last three months of this year.

Considering how much revenue the games can generate ($ 15.1 billion and $ 16.4 billion, depending on whether home fans fill the seats), the potential cost of moving forward with the games reduces the potential benefits, Kiuchi added.

Etsuko Yamazaki Ramen store owner has made efforts to keep his business in Japan during the COVID-19 waves and would like to cancel the Olympics instead of risking a rise in other infections and reducing business risks [Courtesy of Yumi Morikawa]

Divided by business

One person who would like to cancel the games is Etsuko Yamazaki. The owner of a Ramen store in the Suginami department in Tokyo has told Al Jazeera that he has gone on to sell his personal belongings to keep his business going through successive closures.

The 35-year-old became a celebrity on social media in May when a walkie-by tweeted a photo of a handwritten sign outside his shop saying: “I haven’t received any help from Tokyo and I’m ashamed to say I don’t have any more private things. I’ve reached our limit … customers, please help me ”.

The tweet went viral and now customers are squeezing noodles in solidarity. But it is feared that the relief will be temporary when the Olympics spark a wave of COVID-19 and reduce business restrictions.

The sad message from the ramen shop on the way back is painful. pic.twitter.com/rpmCklQIKY

– Special special ✹ (@Manager_Uni) May 21, 2021

“I can’t say we’re going to be okay. If the Olympics worsen the situation, it would be harder for us to keep up with the business,” Yamazaki told Al Jazeera. “All the restaurants and bars are fighting right now.”

But not all small and medium-sized business owners have the desire to get so many outlets. Motokuni Takaoka is the president of the Tokyo Bed Supplier and Olympic sponsor of Airweave. His company estimates that he lost between $ 5 million and $ 10 million when the Games were delayed last year, and he is looking forward to moving forward as he wants this year.

“If the Olympics are held, we have to help them,” he told Al Jazeera.

The role of the COI

Some experts have stated that Japan is not the International Olympic Committee (IOC), which has the legal authority to cancel the Games.

While Japan may break its contract with the IOC, “the costs would be enormous,” said Paul O’Shea, a tenured professor at Lund University in Sweden. Interview.

As O’Shea points out, even though host cities lose money at the Olympics, the COI gets it from making that revenue.

Laura Misener, director of the School of Kinesiology at Western Canada University, said billions of dollars in funding are at stake as the COI is pushing to keep its mark from getting dirty.

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

“I think, of course, the irony is that if it doesn’t come out well, and they bring it all in, it’s going to be a much worse mark than it could be. The conditions for cancellation [the] Games at the moment, ”he told Al Jazeera.

Others believe there could be a tough political calculation among media reports that Prime Minister Yoshihide Suga is likely to call a quick election after the Olympics.

The COI did not reject Al Jazeera’s request for an interview. The Tokyo 2020 press office, citing time constraints, was unable to respond to a request for an interview with Al Jazeera for this article.

Robert Baad, a professor of economics at Lake Forest College in the United States, who wrote about the economic impact of the Olympics, does not give much credence to the theory that contract obligations and the threat of massive economic sanctions are agreeing with the IOC in Japan. whether to cancel or not.

“I think the Japanese government would like the COI to make that decision, and they can always charge the COI,” he told Al Jazeera. “I guess if something goes wrong, but considering that the Games are uncommon among citizens, maybe that’s a logical thing the Japanese government can do.”