TOKYO: It could cost the Japanese government up to 1.81 trillion yen (US$17 billion) if the Tokyo Olympics and Paralympics are cancelled.
With Covid-19 still raging on in the country, there have many calls for its cancellation and public opinion is also swaying to this position.
According to Kyodo News, a research institute came up with the cost estimate of cancelling the games, which is scheduled to begin in late July.
The Nomura Research Institute said the losses may even be higher if infections spread after the games were held.
This will be due to a fresh state of emergency that have to be inevitably declared by the government, where the economic losses could be tremendous.
“Even if the games are cancelled, the economic loss will be smaller than (the damage done by) a state of emergency,” Takahide Kiuchi, executive economist at the Nomura Research Institute, said.
According to the institute, if the games are held without spectators, Japan may reap up to 1.66 trillion yen in economic benefits. It estimates the figure to be higher by some 146.8 billion yen if Japanese spectators are allowed.
Media polls have also pointed to a worried Japanese public over the pandemic, with nearly 60 per cent of respondents in a Kyodo News survey in mid-May said the Tokyo Olympics and Paralympics should be cancelled.
Several prefectures of Japan such as Tokyo and Osaka are experiencing a resurgence of cases and the state of emergency have been reimposed on them.
Japan’s state of emergency, aimed at easing the strain on hospitals treating patients in the affected areas, does not involve hard lockdown measures.
Kiuchi’s calculations show that the first emergency in 2020 resulted in an economic loss of around 6.4 trillion yen and the second between January and March, cost 6.3 trillion yen.
The current declaration, which began in late April, will likely lead to a loss of 1.9 trillion yen with the amount likely to increase if the government decides to extend it beyond the May 31 deadline, it said.
“These estimates suggest that a decision on whether to hold the games or not as well as to limit spectators should be made based on the impact on infection risks, not from the standpoint of economic loss,” said Kiuchi, who was a former policy board member at the Bank of Japan.
Last week, International Olympic Committee vice president John Coates said the games would be held even if Tokyo remained under a state of emergency.
Although Japan has started vaccinating its population, it lags behind other advanced countries like the United States and Britain, where signs of some normalcy have emerged.
On Monday, the US issued a travel advisory telling its citizens not to visit Japan due to the Covid-19 pandemic and this raised more questions about the viability of the games, despite Japanese officials downplaying it.
However on Tuesday, the White House said the US continues to support the holding of the games with strict protocols in place.
“Our position has not changed on the Olympics,” White House Press Secretary Jen Psaki said.
The travel advisory had raised alarm in the global sporting fraternity on the games, with many wondering on its fate.
The US Centers for Disease Control and Prevention (CDC), whose assessment was reflected in the “do not travel” advisory, has described the situation in Japan as potentially putting even fully vaccinated travellers at risk for getting and spreading Covid-19 variants.