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Are the Olympic Games sustainable?

Written by Think Forward Staff
Wednesday, 24 August 2016

With the 2016 Summer Olympic Games now completed, many observers are wondering what will happen to Brazil in the wake of the event. Months before the opening ceremonies, protesters lined the streets of Rio de Janeiro to denounce the exorbitant cost of the Olympics – estimated to be $4.6 billion USD – and to express their frustration with the International Olympic Committee (IOC) and the government of Brazil for displacing citizens in the lead up to the games. To top that off, the persistent threat of the Zika virus had a major impact on the number of tourists and athletes who decided to partake in the Rio Olympics.

Rio de Janeiro was named the 2016 Summer Olympic host city back in 2009, when Brazil was going through an economic boom. However, this year the country is experiencing a downturn, and citizens are fearful of the economic impact that the games will have on Brazil. While organizers continue to claim that the Olympics will boost tourism going forward, others worry that the enormous cost of the games will undermine the government’s ability to help citizens who are struggling to survive.

The situation in Brazil raises the question: do the Olympic Games really benefit host countries? There have been countless studies conducted on the economics of the Olympics, analyzing whether host cities and countries accrue economic benefits during and after the games. Most have concluded that host jurisdictions experience little economic growth as a direct result of holding the Olympics. Instead, host countries tend to incur major expenses for holding the games, such as the cost of operations, sports venues, and upgrading infrastructure.

Once the games are completed, host countries and cities are on the hook for the bill, which means national and local governments are usually left trying to pay down debt caused by the Olympics. For example, the City of Montreal is still paying back the $1.4 billion CDN in costs that it incurred from hosting the 1976 Summer Olympics. The debt created by the Olympics also led to the introduction of a tobacco tax aimed at recouping some of the $990 million in losses that the city experienced from hosting the games. The 2004 Olympics in Greece, meanwhile, was one of the leading contributors to the country’s ongoing debt crisis, with an estimated loss of $14.5 billion USD. Today, many of the venues that were built for the games lie vacant.

And so you have to wonder – why on earth do cities and countries bother hosting the Olympics? The simple answer is that holding the games provides good publicity for the host jurisdiction. They use the opportunity to advertise their community to advertisers and investors around the world, in hopes of attracting more business and tourism. In Rio de Janeiro's case, however, the spectacle of the Olympics was not able to mask the litany of problems that citizens are currently facing, such as poverty, unsanitary water and living conditions, rampant crime, and the unresolved threat of Zika. Rather, the games provided journalists with an opportunity to shed light on these pressing issues.  

There is no denying that the Olympics are an important avenue for celebrating international sport and competition. But we need to ask ourselves whether the games – at their current scale and cost – are sustainable. And we should also consider, as Malcolm Gladwell points out, whether all Olympic events need to be held in one location. If hosting the games nearly bankrupts a city or country, then what is the point in holding them?

 

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