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The Globalization Index 2007: Olympic Ambitions

There is perhaps no greater — or more expensive — stage in the world than the Olympics. Just ask China, which is pouring $40 billion into its preparations for next year’s games. Beijing has already completed construction on all but one of 37 new sporting venues. The government has disseminated etiquette booklets, and Olympic organizers ...

There is perhaps no greater — or more expensive — stage in the world than the Olympics. Just ask China, which is pouring $40 billion into its preparations for next year’s games. Beijing has already completed construction on all but one of 37 new sporting venues. The government has disseminated etiquette booklets, and Olympic organizers are teaching conversational English to millions of residents in order to welcome an expected 300,000 foreign tourists. Beijing has even set up an Office of Weather Manipulation, which has employed scientists to investigate how to prevent rain during outdoor events. Other Olympic-sized projects could push the total to $67 billion by the time the games roll around next summer, more than four times the record-breaking amount that Athens spent in 2004.

But does all the copious cash and international publicity really pay off? Maybe not. If you look at recent host countries, the Olympic effect was negligible at best. There isn’t much of a long-term tourism uptick; both Japan in 1998 and the United States in 2002 experienced no increase in international travel before, during, or after hosting the Winter Olympics. The Summer Games, on the other hand, can provide a small economic boost. Australia and Greece enjoyed an investment spike of more than 100 percent when they hosted in Sydney in 2000 and Athens in 2004, mostly because of increased outlays in infrastructure, retail, and entertainment ahead of the games. But foreign investment dipped again the following year. And these marginal spikes weren’t enough to improve a country’s overall ranking in the index. Greece, in fact, has dropped steadily in the rankings every year.

All this, of course, may not mean much for China. Recent hosts already ranked fairly high on the index, and so may have had less to gain. China, on the other hand, is still a bastion of authoritarianism and ranks only 66th overall, lagging behind in international telephone contact and political engagement. There’s still hope that the games will goose communications with the outside world, encourage Beijing to loosen its grip, and perhaps even make businesses more accountable to international standards. But as with any Olympic event, we won’t know the outcome until it’s over.

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