By Soroor Ahmed (NVOnews.Com)
When Greeks are starving Londoners are celebrating. The on-going London Summer Olympic 2012 is a study in contrast to the situation not only in Greece, but to––name a few––Spain, Italy, Iceland, France, Portugal and a large part of United Kingdom too.
Rather cruelly it came at the most inopportune time for millions of people all over the world, especially in the West, where they have not been used to such economic crisis in the recent decades.
Ironically the Olympic Games were revived in 1896 to restore the prestige of the ancient Greek civilization, from which the post-renaissance western civilization takes a lot of inspiration. Athens again hosted the Olympic Games in 2004 and ever since then it has been paying a huge price. There is no dearth of experts who attribute this grave economic crisis in the cradle of the western civilization to the 2004 Olympics.
But then Athens alone had not paid the price of holding the Olympics. Montreal, which hosted it in 1976, had to impose a $ two billion tobacco tax to help pay the debt off, and that too in 30 long years.
Though Beijing trumpeted a $171 million profit made on operating costs, yet, according to Max Seddon, who wrote before the start of London Games, China ignored to mention the $40 billion-dollar infrastructure buildup it made ahead of the 2008 Games. The $ five to $ six billion the London Olympics earn will not even begin to cover the cost of infrastructure and security alone. Even if it did, half of revenue is split among International Olympic Committee members.
So critics have started calling such mega-events as white elephants as stadiums and infrastructure created for them remain totally unutilized. This happened with the Commonwealth Games held in New Delhi a couple of years back. Millions of rupees were spent on the stadiums, swimming pools, and other facilities built for the Games or sports never played in India.
Similarly, Bird’s Nest built for the Beijing Olympics of 2008 remained largely unused and so are Athens’ softball stadium and sailing marina.
Seddon further wrote that since the world seems likely to remain in the economic doldrums for some time, chances of future facilities being purchased or converted are low.
Olympics or other major sporting events do not lure tourists. Rather they are kept out for the duration of the tournament.
Though attempts are being made to project that London 2012 Olympic would help revive the British economy yet the past experience––of affluent economy like that of Canada––suggests that it is just a capitalist ploy to show to the world that everything is hunky-dory.
But with the start of London Olympic came the news of woeful economic data confirming Britain’s slide into a double-dip recession.
It is now being questioned how justified it is to host the Olympics at the cost of $14.5 billion. But then the decision to hold it was taken long back. In strict financial terms they never actually make money.
A recent Goldman Sachs report points out “most countries … have treated the cost of constructing facilities and infrastructure, together with security and other ancillary costs, as being separate from the cost of running the Games themselves.”
It is possible to declare an operating profit while incurring huge losses on major expenditures that may not be recovered for decades.