Postponement of Tokyo Olympic Games 2020: Economic Effects on Japan

This essay analyzes the multifaceted effects of the postponement of the Tokyo Olympic Games 2020 on Japan's economy. It delves into the financial implications, including the impact on tourism, consumer spending, and the potential for recession. The study explores how the postponement has affected various sectors, such as broadcasting and the legal fallout related to contracts and insurance. The essay also considers both the short-term and long-term consequences, including impacts on the GDP, consumer confidence, and the country's overall economic outlook, while also acknowledging the potential for the postponement to be beneficial in terms of prioritizing public health and reallocating resources. The analysis considers the effects on businesses, investors, and the athletes. The essay concludes that the postponement has a significant negative impact on Japan's economy, potentially leading to a technical recession and affecting various sectors.

Running head: POSTPONEMENT OF TOKYO OLYMPIC 2020
Postponement of Tokyo Olympic 2020
Name of the student
Name of the University
Author note

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Introduction
International Olympic Committee of 2020 Summer Olympics of Tokyo have
announced that the Olympic Games would be postponed on account of coronavirus pandemic
that is wreaking havoc in various countries of the world. The Olympic Games is one of the
largest sporting event which brings together athletes and the fans from various countries of
the world. The games have been postponed till the year 2021 that would bear a great impact
on Japan. The cancelling of such a huge event have created the shockwaves among the people
of the world and it would have a disastrous effect on Japan (Nytimes.com 2020). The
accelerating pandemic have threatened the lives of the people in different countries and the
decision of postponement of Tokyo Olympics 2020 is meant to contain the spread of the virus
among the common people. This essay throws light on the effect of postponement of Tokyo
Olympics 2020 for Japan and how adversely it would affect the country.
Discussion
Historic decision of postponement of Tokyo Olympic Games 2020 would adversely
hit the economy of Japan. It was found towards end of year 2019, that total cost of games
would be approximately 1.35 trillion yen. The amount was divided in between Tokyo which
was paying 597 billion yen and organising committee of Japan which was contributing 603
billion yen. Central government of Japan was also playing an important role and it was
paying a sum of 150 billion yen (Japantimes.co.jp 2020). The various kinds of business
present in Japan have also contributed a great deal of money in the popular and grand event
with the help of the sponsorships. It have been brought out by the economists that spending
have already taken place by the various parties and hence the postponement would prove to
be fatal for the fate of the country. The country was already reeling under the effect of
controversial sales tax that was implemented in the year 2018 and the postponement of the

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Olympic Games would sound the death knell for the country. The tourism sector in Japan was
already struggling before the outbreak of coronavirus pandemic and the postponement would
severely hit the tourism in the country. The country had the diplomatic spat with that of South
Korea which was instrumental in prompting the boycott calls in the country. The visitors of
South Korea made up second largest contingent of tourists to the Japan and hence the
diplomatic spat would prove to be adverse for the fate of Japan (Wbur.org 2020). The
outbreak of the virus have further reduced the number of the people who are visiting from
South Korea along with China that have greatly cost the exchequer of the country. It have
been brought out by the official estimates that number of the foreign visitors to the country
have fallen by 58.3 % in the year 2020 and there have been a plunge of 87.9 % tourists who
were coming from China (Newsweek.com 2020). The consumer spending have been found to
be weak in the country and the postponement would leave a detrimental effect on the
economy of the country.
Coronavirus pandemic have pushed Japan towards recession and the GDP of the
country have contracted to a great extent owing to the influence of the pandemic. The
postponement of games would further worsen situation in the country and it would have an
effect on consumer confidence of Japan. The country would have to face the problem of
securing of venues after the postponement that would raise the challenges for the organisers
of the event. The exhibition facility called Tokyo Big Sight is the primary broadcaster centre
for Olympics and a part of it was reserved for the purpose of the games (Cnbc.com 2020). It
had felt that it would make up for the loss in the nest year with the help of full schedule of the
events. In the event of the games taking place in the next year, it would have to cancel the
other events and as a result it would have to pay the penalty to the contracted users. The
broadcasting is another important arena that would be hardly hit owing to the postponement
of the games. The US television network NBC had paid IOC $ 4.38 billion so that it can gain

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the right to show the games in the year 2020 (Gallego et al. 2020). In the event of the
Olympics being cancelled completely, they would not have to lose to a considerable extent.
The cancellation would prove to be better for NBC as insurance would be able to cover for
the damage that is being done to the company. The postponement of the games would on the
other prove to be tricky for NBC as they would have to decide on whether to broadcast the
Olympic or the college football which is slated to take place in that part of the year (Han and
Noland 2020).
It have on the other hand been brought out by some that postponement of the Olympic
games would lead to economic boom in the future as the economy of the country is depressed
in the present time. The extending of pre-Olympic period would extent the opportunities for
the country that can help them in making the money. It can help in directing the resources
towards the coronavirus outbreak in the present times that can prove to be beneficial for the
people living in the country (McCloskey et al. 2020). They can address issue of the pandemic
in the efficient manner and it can help in offering protection to the people who are living in
the country. It can aid in prioritizing the lives of the people in Japan that can act as a positive
factor for the country (Ahmed and Memish 2020). It can aid in the saving of the humanity
which can act as a valuable legacy for the country.
The Olympic Games would be deferred to the next year however there would be a
reduction in number of visitors owing to higher global unemployment rate that would take
place on account of the crisis. The people may be reluctant to travel to the region due to its
proximity with China that would greatly cost the country. The postponement would be
instrumental in exacerbating ripple effect of the coronavirus outbreak that would have a
negative effect on the consumption along with the exports of the country (Pempel 2017). The
event of postponement of games would plunge Japan into the technical recession that have
been defined by consecutive quarters of the economic contraction. The organizations would

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have to face a difficult situation in preserving more than $ 10 bn worth of the global media
along with the sponsorship agreements. The Prime Minister of Japan Shinzo Abe have tried
to rejuvenate development of the country with the help of monetary easing policies along
with the government reforms but the coronavirus outbreak would act as a big setback for the
country. Shinzo Abe have stated that stimulus will be taken by the country that can help in
combatting the virus and it would involve around $ 137 billion in relation to spending (Nunan
and Brassey 2020). It can be financed with the help of new borrowing that would further
strain the economic condition of the country. It have been brought out with the help of
estimates that postponing of games would cost the country 1.1 trillion yen from the economy
that would have the disastrous consequences for the economic condition of the country
(Parnell et al. 2020). It would add to the pressure of the small along with medium-sized
companies of the country and it would create the path for the bankruptcies in the country. It
would have a detrimental effect on the business along with the investor confidence that would
bring about the negative growth for the country. It would have an effect on the consumer
sentiment that would throw into jeopardy the politicians and the business present in the
country.
The postponement of the major event can help the country in achieving the public
health initiatives however it would have the unwanted consequences on the several fronts.
The athletes have trained hard for the games and they would feel disappointed in the event of
not being able to compete in the games. They would be deprived of the incredible opportunity
as there are some people who may not get the chance to play in the next year
(Japantimes.co.jp 2020). The postponement can trigger the legal fallout that can take many
years for resolving. The sponsors along with local business would greatly suffer on account
of the postponement of Olympics along with the Paralympics postponements (Kang and Bang
2017). There are various companies like Coca Cola and Panasonic that have agreed to pay a

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large sum as they expect that the games will be played in the summer. They expect that large
number of the people would be able to see the products along with the services on the
banners and advertisements. It would also cost the fate of the local hotels along with
restaurants who think that they would be able to earn a great deal of revenue with the help of
the Olympic Games. It would make the companies in Japan turn to the layoffs and furloughs
that would affect the people living in the country.
The postponement of the Olympic Games would create the way for amicable
renegotiation of the contracts that can help the various parties who are involved in the games.
It can however be stated that in the event of the renegotiations failing, it can create the way
for substantial litigation that can cause a fallout in between the parties who are involved in
the dispute (Halchin and Rollins 2017). The networks can refuse of providing with the
payment and they can invoke the contractual terms which claims that the obligations have
ceased to exist. The insurance companies of Japan would have to face greatest loss as they
have sold the policies to IOC, IPC along with local organisers. They have to pay to a
considerable extent and this would harm them to a great extent.
The IOC and IPC would have to determine the sensible safety policies in the event of
the games taking place in the next year. They would have to take care of the safety of the
spectators along with the volunteers in the event of the game being held in the next year. The
postponement of the Tokyo Olympics 2020 would deal a heavy blow to the prestige of Japan
before the other countries of the world (McCloskey et al. 2020). It have on the other hand
been opined by some that maintaining Olympic games in the next year can spur second wave
of the infection as the country would be welcoming the athletes from various parts of the
world. It would have a great effect on the Japanese export demand along with the business
activity of the country. It would bring down the domestic consumption that would cost
heavily the fortunes of the country.

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Conclusion
The postponing of Tokyo Olympic Games 2020 would deal a heavy blow to economy
of Japan. It would make the various business to incur the loss who have contributed the
money to the grand event. The tourism of Japan was already in a bad state and the
coronavirus pandemic would have a further negative impact on tourism in the country. It will
push Japan towards the recession and it would have a detrimental effect on the aspect of the
consumer confidence in the country. The postponement of the Olympic Games would prove
to be beneficial for the public health however it would have bad consequences on different
fronts. The athletes would have to face the sheer disillusionment as they had worked hard
however they would not be able to participate in the games. It would make the hotels in Japan
suffer the loss who had hoped to make the profits due to the staging of Olympic Games. The
various companies present in Japan would take recourse to layoffs which would affect in a
negative manner the people who are living within the boundaries of the country.

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