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London 2012: fast track to prosperity?

There is one aspect of our civilisation that has often proven to be the stimuli of controversy when mixed with sport: politics.


Ben Stupples

Regularly commanding unparalleled attention worldwide from both the general public and the media, sport provides perhaps one of the greatest stages to showcase a political message.

As Nelson Mandela – one of the foremost (and few political leaders to harness sport’s political power effectively – says: “sport has the power to change the world. It has the power to inspire, it has the power to unite people in a way that little else does.”

Subsequently, it is unsurprising that, in spite of the fifth chapter of the Olympic Charter stating: “no kind of demonstration or political, religious or racial propaganda is permitted in the Olympic areas”, several politically-influenced incidents have occurred during past Olympic Games – the world’s largest sporting event.

In 1936, for instance, Adolf Hitler exploited the Olympic Games in Berlin (nicknamed The Nazi Games) to substantiate his ideology of Ayran superiority.

Ironically, despite the IOC intentionally awarding the Olympic Games to Germany as an opportunity to re-establish their status among neighboring European countries, Jesse Owens, a black athlete from the United States, went on to win four gold medals during the Games: more than any other athlete in the whole competition.

Also, in 1972 a Palestinian terrorist organization, Black September, broke into the Israeli quarters in the Olympic Village during the Olympic Games in Munich, taking members of the Israeli Olympic team hostage, and  killing several of them – six coaches and five athletes– after the Israeli government dismissed the terrorists’ demands.

Fortunately, the Olympic Games has not been sullied by any political boycotting or terrorist attacks since the 1996 Olympics in Atlanta when Eric Rudolph, an anti-homosexuality and anti-abortion terrorist from the Army of God, placed the three pipe bombs surrounded by nails, in the Centennial Olympic Park killing two people and injuring one hundred and eleven others.

However, that does not mean that politics has not meddled with the Olympics since the start of the second millennia – on the contrary. Many economists, such as Curt Hamakawa and Elizabeth Elam from Western New England University, have regarded the architectural spectacle and organizational brilliance of China’s 2008 Olympics in Beijing as deliberate (and successful) attempts to advertise themselves as a “full-fledged first-world economic power.”

Nelson Mandela

The enveloping political environment, often seems to overshadow each Olympic Games, effecting it directly at times. This year’s Olympics in London being no exception. With the UK’s economy currently floundering in a double-dip recession, London 2012, which the British Olympic Association secured whilst the UK was still in a period of consistent economic growth, has provided the country’s politicians with a prime opportunity to exhibit the UK (and particularly London – one of the world’s leading financial and cultural centres) to potential investors.

“Britain is back open for business,” declared UK Prime Minister David Cameron at the British Business Embassy’s Global Investment Conference on the day preceding the Opening Ceremony of the Games, “and we are committed to supporting global growth with open trade between our nations.”

Speaking behind a stand on which the words GREAT Britain were boldly emblazoned to an audience containing senior figures from some of the world’s leading business, he concluded: “So invest in Britain, partner with Britain, not just to invest in this country, but because this is the place, the hub, from which your company can grow and expand.”

Other members of Mr. Cameron’s coalition cabinet have reinforced their leader’s message of the UK’s economic viability recently; The Deputy Prime Minister, Nick Clegg, stated that the Olympics bestows upon the UK a “once in a lifetime opportunity to boost the UK’s growth potential,” and the Chancellor, George Osbourne, said: “Britain has always been a country that is open to the world. In hosting the Olympic Games, we are showcasing that openness.” (The Independent)

Feminist protest at London Olympics

Therefore, behind the foreground of the thousands of Olympic athletes striving to claim a much-coveted medal, the UK’s politicians, using London 2012 as the ultimate (and possibly most expensive) worldwide advert, are striving equally as hard to salvage their country’s precarious economic situation.

However, for other host nations, have the Olympic Games always been a financial success? In short: no. With a debt of $1.5 billion from the cost of their Olympic Stadium’s construction, only paid off in December 2009, the 1976 Olympics in Montreal effectively bankrupted the city.

Additionally, some economic commentators, such as Nick Malkoutzis from Bloomberg Businessweek, have suggested that Greece’s appetite for extravagance in preparation for the 2004 Olympics in Athens – an overall cost of €9 billion made it the most expensive Olympic Games at the time – foreshadowed Greece becoming the first EU country to be subjected to the European Commission’s fiscal monitoring in 2005.

Equally though, there have been a number of Olympics Games that have proven to be tremendous economic successes for host nations.

In 1984, contrasting with Montreal’s financial nightmare in the preceding Games, the Olympics in Los Angeles made a $250 million profit; after the 1988 Olympics in Seoul, South Korea’s economy grew by 12%; and the 1992 Olympics in Barcelona sparked the inception of the city’s cultural and financial resurgence.

Like London 2012, Barcelona’s Olympic Games were held whilst Europe’s economy was beleaguered by recession. Consequently, its long-lasting success may well be a source of guidance and inspiration for the UK’s politicians.

Indeed, the London Olympics’ enduring effects appears to be a matter on which Olympic Minister, Hugh Robertson, wishes to focus: businesses, he told The Evening Standard, need to take a “long term view” on the effect of the Olympics and expect “a huge payback in terms of tourism and spend on both the economy and in the retail sector in the years ahead.”

The Cultural Secretary, Jeremy Hunt, supported Mr. Robinson’s outlook on the issue: “London is already one of the world’s greatest cities, but these Games have made it iconic and if you have a business in London, in the years to come you are going to benefit massively from the huge amount of publicity, PR, promotion and marketing that you get from having a Games in London.” (The Evening Standard)

However, with the British Business Embassy’s forecast of the Olympic and Paralympic games generating “£11 billion in benefits to the UK economy”, could they alleviate the country’s current economic issues?

Goldman Sachs, according to MindfulMoney, “predicts a short term boost to the economy of 0.3% to 0.4% in Q3 – enough to perhaps (sic.) temporarily lift the UK out of recession”; and Capital Economics, according to The Guardian, concur that they could help “the economy grow by 0.8% in the third quarter” with a “temporary boost”.

It seems, therefore, that the financial benefits Olympics could be regarded as both a short and long term solution to the UK’s continuingly unstable financial circumstances.

Yet, like the many athletes we have seen recently peering up at the Olympic Stadium’s electronic screens, we must wait nervously to see the results.

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