Japan is to economics what Axl Rose is to
music business. They both rocked in the late 80s and beginning of the 90s, then they started losing ground and nowadays, anytime they try to make a comeback, the results are… pretty disappointing. I know what you are thinking… from the first
glance, Japan doesn’t seem to be that bad, right? They have the videogames, the anime movies
and world class tech behemoths. And their capital, Tokyo, looks like a Scy-Fy
city. It is the World’s biggest metropolis, with
over 30 M people, and they have the fastest trains, the most modern TVs and even human-like
robots. Nonetheless, this country has been 2 decades
without no economic growth. And this is not the worst! Japan is the most indebted country in the
whole planet. They owe more than twice their entire GDP. And their population is decreasing faster
than anywhere else, which poses a big problem in order to pay retirement pensions. This is one of the reasons why Japanese workers
make crazy hours and have almost no vacations. And those good old technological juggernauts
like HITACHI or PANASONIC are falling behind the more modern companies from China or America. But hold on just a second because things might
change! Yes, I’m talking about the TOKYO OLIMPICS,
2020. A peerless opportunity to make to showcase
the whole country and get the world’s attention. Yes, my dear viewers… since Japan won the
Olimpic bid, in the year 2013, tourism has skyrocketed from one day to the other. And the same goes with private investment. By that year 2020, Tokyo will have 45 brand
new skyscrapers. Nothing more and nothing less. And companies like PANASONIC will set state
of the art solar cells all over the place so people can charge their electric cars. If this was not enough, SONY will launch their
brand new 8K TV screens. Yep, you heard that right. If 4K was not enough, now we will have 8K
so you will be able to see even the microfiber of the athletes Tshirts. But hold on just a second because… not everything
is as beautiful! You see, when Tokyo won the Olympic bid, they
budgeted them in 6.5 billion dollars. But once they started with the building, the
costs have doubled. And they haven’t even finished! In fact, Tokyo’s city hall has predicted
the total cost might end up near the 20 billion USD. So the question is… would this Summer Olympic
Games be an opportunity for Japan… or the opposite? Are Olympic Games as good for a country’s
economy as some people say? Today we are gonna answer all of this questions
but, before, let’s take a look back at history. AN OLYMPIC FALACY? Few things spark nacional pride as much as
Olympic games. Of course, we all like to brag about the gold
medals our country has. But what really inflames patriotism the most
is to become an Olympic host. The excitement it generates is so big that
everyone, regardless of their ideology, seems to think that organizing an event like this
is a good thing for the country. Nonetheless, inside the economists field,
things are not that clear. In fact… the arguments in favour of hosting
Olympics are a little bit like… hmm… how should I say? They are so inconsistent they could be a tweet
written by Donald Trump According to a paper from the Bank of Japan,
the effects of the Olympics are so good that you can tell even before they have been celebrated. More specifically, the same year the International
Olympic Committee named Tokyo as the host city, everyone started to see Japan as a perfect
place for investment. Remember that we are talking about a paper
from an institution as prestigious as the Bank of Japan. This would be the Japanese equivalent to the
American Federal Reserve. This said, one of their main arguments is
that, if your city gets to be an Olympic host, the whole country can join all those big organizations
every country would like to be a member of. Want examples? Here you have examples! Barcelona got the nomination in 1986 and… BOOM! That very same year, they joined the European
Union. Beijing was nominated in 2001 and… BOOM! That year they joined the World Trade Organization. What do you say? It seems like nobody could argue this train
of thoughs, right? Well… wait a second because this is a textbook
example of a correlation fallacy. In other words, the fact that Spain joined
the EU the same year Barcelona got chosen as the Olympic host does not mean one thing
caused the other. In fact, Portugal also joined the EU on the
same year without hosting anything. And the same happened with China. On the same times, other Asian countries joined
the WTO without organizing no sport events. But I know what you are gonna tell me now! Hey Simon, what about the international attention? During two weeks, the whole world is going
to put their eyes in Japan. We are talking about the biggest sport event
in the world. Or maybe not? You see, the London Olympics 2012 got an average
audience of, around 31 million people in America. To make a comparison, this is twice as much
as a Game of Thrones episode. Yes, it’s not bad. But… what happened with the rest of the
games? For example, Sochi Winter Olympics, 2014,
didn’t even get to have 22 million viewers in the States. And Rio 2016 was around 26 million. This might look big to you, guys, but is nothing
if we compare it with a much cheaper event like the SUPERBOWL. The 2016 Superbowl surpassed 110 million viewers. In other words, even though Olympics are watched
all around the world, when you look at the audiences country by country, the figures
are not so impressive. And this means that the perception that people
have about a country does not change. At least, it doesn’t change… for good… In a study of the impact of the 2000 Olympics
in Sydney, Australian researchers interviewed people one year before and after the Games. They found little change in perceptions, with
one surprising wrinkle: South Africans had soured on Australia “because of the way
in which the Aboriginal issue was highlighted and portrayed by the South African media,” Nonetheless, there is one thing where it seems
fair to agree: Olympic games kickstart your tourism industry. Actually, since Tokyo was chosen as the Olympic
host, tourism in Japan has skyrocketed. They almost didn’t have tourists in 2013
and now they surpassed 24 million people last year. You can say a brand new industry has been
born in Japan. And this is an industry that attracts lots
of foreign money… Who wouldn’t be happy with this? Well… hold on a minute because even this
figures can be argued. Of course, tourism in Japan has increased
a lot. But… do you know of other countries with
a booming tourism sector? Chile and Thailand. They have grown at a similar rate as Japan. And… don’t even google it because I will
tell you here: none of this two countries is planning to host any Olympics. The Thailand example is pretty paradigmatic. They get 6 million more tourists than Japan
with half of its population. And their tourism growth is directly correlated
to that of the Chinese middle class. In other words, as Chinese people have more
money, they want to do sight seeing… and where do they go? Of course! They go to countries that are nearby and have
beautiful things to see! But I know what you are thinking! Despite the Olympics not being that profitable
as they seem… what’s the problem if Tokyo wants to have Olympics? Who doesn’t like to have a giant stadium
on his city, huh? Well… let’s have a look at this right
now. GOLD MEDALLIST… IN SPENDING! We all know it… Olympics are costly. From one day to the other, Tokyo will have
to build an Olympic Stadium to host more than 80,000 people. And also, they have to impress them with lights
and colors. But it doesn’t stop here! They need other special venues for the many
competitions that are held at the same time. Each of the sports have its own specifications. Athletism requires different things than swimming
or canoeing. In summary, 31 venues will be built or remodelated
for this Tokyo 2020 Summer Olympic Games. Add to this the media centre, which is another
big White Elephant and, on the top of it, the Olympic Villa. This is short of a small town where more than
10,000 athelets will live during the time the Olympics are held. And, as you can imagine, this will not be
cheap, either. The total cost for this was meant to be 6.5
billion USD. At least, this is the figure given by the
local authorities to the International Olympic Committee in 2013. But, you know, one thing is the theory and
another thing is the reality… Tokyo 2020 Olympic Games costs just keep rising By December 2017, Tokyo City Hall had already
spent over 12 billions. And just a couple of months later, the local
authorities said that, at least, they will end up spending 20 billiones! And maybe, this figure will keep rising before
they burn the Olympic flame… In fact, nothing of this is a surprise. Since we have memory, every Olympic Games
have cost overrun. And we are not talking about little pennies
here! Rio de Janeiro 2016 ended up being 51% more
expensive than expected. But the record, so far, is Montreal 1976,
that costed 700% more than the initial budget. Yes, you heard this right. This is 8 times more that what it was planned
at the beginning. And now you might wonder… All this billion dollars are little or big
money for a government? I mean… compared with the normal spending
in a big city hall… is this a big number? Well, the answer is a big YES. For a better understanding, with 20 billion
USD you could build, for instance, a highway that connected the extreme north of Japan
to their extreme South. But wait a minute because this is not the
worst of all! You see… an airport or a highway can and
up being a waste of money. But, still, you can always reutilize it. A country with better infrastructures and
communication can have better companies in the future, brand new industries or better
public services. But what do you do with an Olympic stadium
that can host 80,000 people? Well… if we look at past examples, the answer
is pretty much bitter… Rio Olympic venues already falling into a
state of disrepair Rio de Janeiro example is pretty harsh. Despite having Olympics, they still have entire
neighbourhoods that are not even connected to the city centre by a bus line. And the place where the Olympic Villa has
is becoming a slum. But wait a minute because this is not the
only example. Athens Olympic site in ruins 10 years on from
2004 Games Add to this the fact that Japan is the most
indebted country in the planet. They owe a sum equivalent to 230% of their
GDP. The government is already struggling to pay
the retirement pensions and they have been 2 years without any economic growth whatsoever. So now this is your turn… Do you think the Tokyo Olympics 2020 will
mean the ruin of Japan? Or maybe, against the odds, Japan will take
some advantage of hosting this event? Please, leave your answer in the comment section
below. And if you wanna know more about this Japanese
failed economy, click on this video. Also, visit our friends from RECONSIDER MEDIA
at RECONSIDERA MEDIA.COM, this is the podcast that provided the voices on this audio that
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