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  • 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 arepretty disappointing.

  • I know what you are thinkingfrom 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 viewerssince 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 becausenot 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 iswould this Summer Olympic Games be an opportunity for Japanor 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 factthe arguments in favour of hosting Olympics are a little bit likehmmhow

  • 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?

  • Wellwait 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.

  • Butwhat 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 changefor 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 Australiabecause 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?

  • Wellhold on a minute because even this figures can be argued.

  • Of course, tourism in Japan has increased a lot.

  • Butdo you know of other countries with a booming tourism sector? Chile and Thailand.

  • They have grown at a similar rate as Japan.

  • Anddon’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 seeingand

  • 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 seemwhat’s the problem if Tokyo

  • wants to have Olympics?

  • Who doesn’t like to have a giant stadium on his city, huh?

  • Welllet’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 meancompared with the normal spending in a big city hallis 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 seean 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?

  • Wellif 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 are not mine.

  • And don’t forget that we publish brand new videos every Monday and every Thursday so

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  • If you liked this video, please, give us a thumbs up and, as always

  • I see you next time.

Japan is to economics what Axl Rose is to music business.

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Will JAPAN go BANKRUPT because of the OLYMPICS? - VisualPolitik EN

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