The tangible impact on the Japanese economy
will be limited. The Japanese economy is much larger and more developed than it
was in 1964, when the first Tokyo Olympics was held. There is no bullet train
to be commissioned in time for the opening ceremonies. There is no post-WW II Tokyo
waiting to be terraformed. But there are intangible, if also limited, benefits.
Animal spirits will quicken, helping to stoke the Abenomics fire. In this
regard, it’s significant that it’s Tokyo—not Nagoya (candidate 1988) or Osaka (2008)—it
maximizes the socio-cultural impact.
Prime Minister Abe is a lucky man—who
guessed a year ago that Prime Minister Erdegan would blow up Istanbul’s chances
in the face of a heavily European IOC?—but he helps to make his own luck. This
is not the first time that I’ve said that, but again he put some political
capital on the line, and again it paid off; his presence and presentation were,
by all accounts, a definite positive. Think about it. Can you imagine Prime
Minister Kan having carried it off? Or even thinking about it? With Governor
Ishihara? Again, the effect will be limited in political terms; it’s not about
him, he surely understands that, and he’ll wisely downplay his role in having
made it happen.
And speaking of Abe’s presence, does
anything say G-Zero more than leaving the G-20 Summit in St. Petersburg to show
up at an NGO—after all, that’s what the International Olympics Committee is,
isn’t it?—plenary in Buenos Aires to make a pitch to host a sports event?
Given the timing of all this, some people
will be wondering what the impact will be on the looming decision on the
consumption tax hike. I’ve been moving back over the last couple of weeks to
the view that the FY 2014 hike will indeed be implemented as scheduled (with a
significant FY2013 supplemental budget to tide the Japanese economy over the
bump) and I’m tempted to interpret all this as a positive in this respect. More
importantly, though, it makes any decision of his easier for the Japanese
public to accept, and the consumption tax question is no exception. In other
words, it increases his room for maneuver.
Finally, it’s useful to remember that the
likes of NYT and “outcast of Asia”
chatter aside, Japan is quite popular worldwide, regularly placing near the
top—it would be the top if not for the Chinese and South Korean respondents—in
the annual Pew survey. That surely helped to offset headlines around the latest
Fukushima leakage.
Now, I have work to do.
