Should India Host the Olympics? A Cautionary Tale

The Tokyo Olympics has begun and tongues are already wagging on when India would get to flex its muscles by organising one in the subcontinent. But should India host the Olympics anytime soon? Here’s what we think.

The Olympics is a marquee global sports event. The history of the modern Olympics can be traced to 1896 when Pierre de Coubertin spearheaded its revival by modeling it on the ancient sports meet held in Olympia, Greece. When the Olympics were held in ancient Greece, all hostilities between the participating city states ceased. This cessation of hostilities, also known as the Olympic truce, was aimed at ensuring all spectators and sportspersons could reach and leave the venue without fearing harm.

This Truce was reinforced in 1993 when the UN passed a resolution urging its members to adopt it from seven days before the Games started. At the outset, if we were to consider the Olympics Truce as the touchstone of this event’s success, the ongoing strife, hostilities, and tensions across the world suggest that the games have failed to live up to their promise.

The Olympics' trail of blood

Who can forget the massacre of 11 Israeli athletes during the Munich Games of 1972, or the US and its cronies boycotting the Moscow Games of 1980. Even the lesser known massacre of students of Tlatelolco during 1968 Mexico Games is only a few of the many examples strewn in the run-up to or in the immediate aftermath of the Olympics, which sells itself as the epitome of World unity and an ambassador of peace.

Besides, over the past 125 years, the Olympics has proven itself to be a financial drain without parallel, if we discount natural disasters, of course. It has pushed several countries, which sought to use this marquee event to showcase their prowess, into debt traps so huge that their economies slid into recession.

The never-ending crisis

Take Athens as an example. Many observers link the huge expenses the Greeks incurred for holding the 2004 Summer Olympics to the so-called never-ending crisis of Greece, which began in 2004 and became a full-blown economic disaster by 2007. Another red flag comes from South America, where Brazil’s 2016 Rio Olympics exacerbated an economic recession, from which the country is yet to recover. It is this economic perspective or cost of holding the Olympics that forms the base of this discourse arguing against India organizing one.

At the onset, this discussion does not aim to demean the achievements India has made over the past few decades. However, it seeks to build a cautionary tale by highlighting that the side-effects of organizing the extravaganza far outweigh any perceived gains. For a nation that prides itself in bucking the trend of globalization with its own version of localization, striving for international validation by splurging money on an event with little long-term benefit seems out of sync with its pronounced aim of empowering every citizen. You have the example of the African nations, which have a monopoly of sorts on long-distance endurance racing. However, these countries figure at the bottom of the list on almost all Human Development Index parameters.

Glory or harsh reality

No doubt winning on an international stage gives immense pride and satisfaction to the athletes, but seldom does it translate into any material gain for the country. Without taking anything away from the sporting talents of India, a podium finish on an international arena means nothing if the winner’s homeland is in want of even the most basic amenities. The onus of ensuring development and then crowning that achievement with sporting glory is what any rational government should strive for. Piling up a debt burden for the future generations to pay off amid compelling evidence of the Olympics being a catalyst of economic downfall reeks of a hunger for world’s validation.

The Tokyo disaster

Tokyo was supposed to organise the Olympics in 2020, but the pandemic put paid to any congregational event, resulting in its postponement to 2021. The one-year gap has already bloated the bills by 22% or in absolute terms by $2.8 billion. Japan had earmarked $12.6 billion for the 2020 event, but will now have to shell out $15.4 billion. And the worst part is that many observers believe the figures are conservative, with some hinting at the costs being in the vicinity of $25 billion.

Now, it is natural for people to question how the financial projections of such a global event could get clouded in speculation. But then, Tokyo's is not an isolated case but a representative of how the organisers fudge the balance sheets to paint a rosy picture when the prospects, at best, are bleak.

Imagine India winning the Olympics bid at the cost that Japan is bearing today, which is the conservative $12.6 billion, which translates into INR 93,00,00,00,000 (@74.41 exchange rate). To put things into perspective, if such a sum were to be expended on India's vaccination drive and the costliest shots (Sputnik V @ 1,415 a dose) were to be purchased, we could inoculate around 6.57 crore people at least once. The numbers will double if we were to inoculate people with the cheaper alternative, Covishield (INR 650 a dose).

Take roads for instance, laying a one-km greenfield two-lane national highway costs the national exchequer around INR 10 crore. For INR 93 thousand crore, the country's national highway network can grow by around 930 km. This analogy fits for the Indian Railways as well. It claims that a single-km track costs INR 10 crore, while laying one-km of high-speed track may set back the national carrier by `100 crore. In 2015, the then Railways minister said India needed INR 80,000 crore to construct the entire length of the planned high-speed tracks. For the conservative estimate of the Tokyo spend, we can build some world-class Railway infrastructure, with some money to spare, too. These are a few avenues where the ego-boost spend could otherwise be gainfully utilised.

The Oxford study

In a study published by the Oxford University last year, researchers crunched the numbers to find out how difficult it was to keep expenses within budget. The study is as instructive as it is a telling commentary on the sleight of hand the organisers commit.

For instance, they found that since 1960, the cost of organising every edition overran by 172% on an average. The researchers took into account the cost escalation of both the Summer and Winter games to arrive at this number. However, theirs is not a conclusive figure in that some countries had managed to hide the numbers better than others, with a few not even bothering to put up the figures publicly. For example, the paper says:

"Unfortunately, Olympic officials and hosts often misinform about the costs and cost overruns of the Games. For instance, in 2005 London secured the bid for the 2012 Summer Games with a cost estimate that two years later proved inadequate and was revised upwards with around 100%. Then, when it turned out that the final outturn costs were slightly below the revised budget, the organizers falsely, but very publicly, claimed that the London Games had come in under budget, and media uncritically reported this, including the BBC."

Bid for downfall

Before proceeding, it would be instructive to note that even bidding for the Olympics is a cost-intensive procedure, with many sets of legal and financial obligations becoming binding on bidders. Cities bidding for the event alone had to shell out at least $35 million to be in the race. While the bidding cost has been reduced by around 80% for the 2026 Winter games host cities of Milan and Cortina, it still set them back by $5 million. However, China still had to pay $35 million to stake claim on 2022 slot as the rule change came only in 2019, good 3-4 years after it made its bid. For a country like India with more important areas of commitment vying for the government’s attention, such a splurge, even after the fee reduction, seems criminal. Should we spend such a great amount even when the possibility of winning the bid remains remote?

According to the Oxford research, the most recent five games cost on an average $12 billion, which did not take into account the amount spent on infrastructure like road, rail, airport and hotels, among others. The average cost of hosting the Games between 1960 and 2016 is pegged at $4.5 billion. Now, juxtapose the preceding statement with what London (2012) spent to make it the costliest Summer Games ever: $15 billion. This exorbitant figure was surpassed by Sochi while organising the Winter Games (2014) with a billing of $21.9 billion, which is higher than the money spent on all the preceding Winter Games combined. Now, were India to organise a future event at the conservative 2021 prices, imagine the cost overrun of 172% and the financial implications of it. Thankfully, the slots till 2032 are booked, and as per reports, India aims to bid for the 2048 edition, by which time inflation would ensure that the Japan figures were merely pocket change.