Tuesday, 14 August 2012

 Olympics: Far from the shiny stuff you see on telly  

When I heard Kenya’s Prime Minister declaring at the Kenya House in Stratford that the country would be bidding for Olympics 2024 – I wondered what a heavy load of folly. I wondered what deludes an African state bedevilled with corruption and inept financial management and oversight mechanisms like Kenya that they would pull off a mega event when big gunners like Canada, UK, Australia, and South Africa could not even come close to recovering their investment.

Well, for the past fortnight, the Olympic mood engulfed Great Britain. London has been awash with emotions, revellers and Olympians alike. True to the words of Mayor Boris Johnson: London went ‘Zoink’. But hang on a minute, who really were the folks sucked into this Olympic-frenzy? Who indeed were the real winners? Could there have been someone somewhere on the curbs, standing on the side-lines bypassed by the Olympo-mania? There has been some over-optimism and naivety around the hosting the Olympics and other such mega events (like the Commonwealth Games and the FIFA world cup) that needs to be honestly interrogated.    

Of late there has been the fancy reference to ‘legacy’ that every committee bidding or organizing these events are fixated to that is not only misleading but mythical as well. The justification in almost every bid today is that: i) economically the events would generate and redistribute massive financial capital. ii) Catalyse urban transformation; fast tracking regeneration and renewal of decaying segments of a city’s morphology and addressing issues of urban poverty, social exclusion and inequality. iii) Attract inward investment and tourism critical for promoting growth and creating employment, and  iv) expose a city or a country to valuable international audience strategic for building its image and enhancing its competitiveness.

However, in reality, experience from a majority of previous hosts tells a story extremely divergent from the idealism exuded by the organizers of these events. Cities/countries have incurred huge losses; there is no evidence of inward investment attributable to the image built by the games; large populations have been displaced through evictions for construction or gentrification; and there is little documented impact on the lives of local people. Media accounts of wasteful public spending have tarnished their reputation as vehicles for urban regeneration and portrayed them merely as public relations ventures far removed from the realities of urban problems. Actually the main beneficiaries are seldom the most deserving and needy candidates. They fail to address the underlying structural issues that exacerbate poverty, dereliction and decay in urban landscapes.
Let us interrogate these claims honestly and objectively in order to be in a position to judge the Olympics and other mega events for what they truly are:

Massive financial capital OR Massive public investment – value for money
Except for the Los Angeles Olympics of 1984 and Atlanta 1996, not one mega sporting event can claim to have made profits out of the games. The norm has been that the actual costs far outstrip the estimated costs during the bidding process. Revenues generated do not come up at least to the expectations of their organizers. The CWG at Edinburgh in 1986 apparently incurred a £4.3 million deficit; the actual cost of the Manchester Games surged to £670 million and the plan to raise revenues through advertising and tickets flopped; the initial bid for the Melbourne CW Games estimated it would cost $195 million but eventually exploded to over $1.1 billion. By 2010, the Glasgow 2014 budget had increased from £373 million submitted at the time of the bid to £523 million. 

The Montreal Olympics of 1976 earned the name – ‘The Big Owe’ drawing from the huge debt that Quebec accumulated from hosting the games. In fact the $1.5-billion debt from the 1976 Summer Games was paid off in full by Canadian tax payers 3 decades on in 2006. Athens 2004 Olympics cost a record £9.4bn way over original budget. This left Greece with huge debt amounting to about €50,000 for each Greek household to foot. Maintenance of the sites alone cost as much as £500m. The Sydney Olympics 2000 cost about $6billion costing the public at least $1.5bn (about £720m) in deficit. And true to the Olympic fashion, the London Olympics 2012 overrun the initial budget by 101% in real terms to end up at US$14.8 billion by the time of the opening ceremony on 27th July 2012.

Clearly, the economic viability of these events need not be over-debated, truth be told, they have not demonstrated the capacity to generate surplus revenue for the host cities and nations. They have instead burdened the tax payer with extra expenses that do not match up benefits accrued from them. Without robust systems of financial control, accountability and performance management to ensure value for money and delivery on agreed outcomes, they are poised to draw money away from public sector investment that would be better spent on education, healthcare rather than sports facilities.

Reconstruction of urban form or transfer of decay
The IOC argues that as one of the legacy issues, the games facilitate development of new infrastructure to encourage economic regeneration, revitalise, remediate and regenerate deprived inner city areas and make them attractive to business and open up new opportunities for employment.

However, there is a tension between the construction of the image of prosperity and attractiveness and the actively concealed landscapes of urban poverty and deprivation. Neighbourhoods are made-over to create a shiny image for tourism and investment but the underlying structural causes of their decay not addressed. Under the logic of event-oriented development, the visibility of poverty is an eyesore; preparations often involve removing the poor from high-profile areas surrounding event venues without significant attention to long-term solutions to slum problems. There were massive displacement of over 1.5 million Chinese to construct the Birds nest in Beijing for 2008 Olympics; to beautify Seoul for 1988 Olympics, South Korea evicted residents for clearance and development of around 100 sites. In Cape Town, homeless people were moved from the downtown area around the stadium into razor wire encircled encampments outside the city for the 2010 world cup. “They want to make a good impression for the foreigners coming. We are like flies to them.” There was a row with Glaswegians in Dalmarnock over evictions and closure of a market of historical value for constructions for the Glasgow 2014 commonwealth games. The construction of the athletes' village in Stratford (London East-end) broke up a community that had been on the site legally since 1972. In sum the evictions have disrupted community and neighborhood ties, curtailed social capital and diminished locality identities for a shiny image makeover that can only conceal so much from investors and tourist eyes for so long.

Furthermore, the displacements aside, the history of mega events is that they have increased housing prices and cost of living in such neighbourhoods and technically driven out initial householders. "Olympic effect" helped to hike property prices beyond the means of many in Barcelona. According to homeless charity Shelter, across East London landlords evicted tenants to cash in on lucrative Olympics rental demand. Most events have merely transferred unemployment, poverty and deprivation to urban fringes as they bolster city competitiveness; image and physical environment. Moreover, many hosts have ended up with their overall negative aspects unaffected; despite massive expenditure in the costly facilities that remain underutilised and cost more to maintain after the games.

Addressing Social exclusion
Mega events have been touted as drivers for enhancing social inclusion. The argument has been that they would enhance human capital development and community participation – provide volunteering opportunities and apprenticeships, and create new jobs. However, though volunteering programmes can enhance personal development and confidence of those who participate, there is a weak link between volunteering and getting long-term, high quality jobs most needed by such groups. Nature of employment generated has normally been criticized for its poor quality and lack of longevity. To many local populations, major events are often viewed as an imposition from outside. Manchester 2002 did not succeed in establishing an inclusive approach to the decision making process. Community participation was lacking in Delhi 2010 as well; described as a case of misplaced priorities and an attempt at nurturing a fragile sense of national pride. After forced eviction and relocation to unfavourable property – a resident noted: “I was happy about London getting the Olympics, but we haven’t been treated right as a community. They wouldn’t have done it to any other people. No-one’s even offered us a free ticket.”

Image Legacy
Mega events are argued to expose a city/country to international audience with the ability to raise perceptions. Sports fans may enjoy their visit and return after the games, investors and venture capitalists may relocate manufacturing facilities, company headquarters, or start new business in the city based on their experience. Television viewers might decide to visit, seek work, education or to reside in the city based on what’s advertised. They could also inspire and bolster national pride, and unity that inspire confidence in a city/nation. President Nelson Mandela wearing the jersey of Francois Pienaar during the 1995 Rugby World Cup final in South Africa was a powerful  image message to the world that South Africa had emerged from its years of racial oppression and served to unify the country. Ray Nagin, Mayor of New Orleans exclaimed that the return of the NFL in 2000 was an important symbol of recovery from the hurricane Katrina.

However, in principle, a city's external image is generally durable. Mega events combined with an advertising campaign may influence specific aspects of a city's image which in turn may influence the decision to visit. However, a city’s image is normally compartmentalised in the psyche of an individual. A mega sporting event may well leave the overall negative aspects unaffected. Momentary spotlight doesn’t necessarily translate into sustainable growth. There is virtually no evidence (save for the case of Seoul) of post event testing of outcomes that were predicted. The claim that the events attract investment and tourism critical for promoting growth and creating employment is itself not tenable. No examples documented of companies moving operations or setting up businesses based on decisions attributed to the hosting of a mega event. Neither is there sufficient evidence of populations shifting to live in host cities after the hosting of such events.  

Mega events may as well taint the image of a city and negate the regeneration efforts especially when the media coverage is not managed to the advantage of the city/country. The riots across England in summer 2011 very well threatened the dividends of image that London 2012 Olympics organizers hoped to achieve. The ticket-empty seats mishap? Atlanta failed to capitalise on the Olympics publicity; the Central Park bombing, severe heat and humidity drew negative publicity and the press nicknamed the city – “Hotlanta”. Bribery scandal surrounding the 2002 Salt lake winter Olympics, the Terror attacks of Munich and Atlanta, the 1990 riots in Detroit during the NBA finals all served to taint the image of the hosts.

If you ask me: improvement of a city’s image and physical environment will not automatically address the fundamental structural causes of poverty. There is certainly no guarantee that a major sporting event will produce positive social and/or economic benefits for the host and it’s debatable as to exactly who, within the host population, benefits.


  1. Frankline Sunday14 August 2012 at 22:49

    Poverty is not a game. How true. Brazil should be made to understand this especially as they start celebrations to host both the Olympics and the World Cup with only 14% of the roads tarmacked and the second highest unemployment rate among the BRICS nations.

  2. A valuable corrective to the hype. Two additional comments:
    a) it's too early to tell very much - though I appreciate this article's review back to Montreal in 1976. But the Eiffel Tower was put up for such a mega event, and Wembley stadium was built for the 1924 Empire games. Wiki gives the outline of an interesting story - http://en.wikipedia.org/wiki/Wembley_Stadium_(1923)

    b) What happened to the money spent? If it's seen as Keynesian stimulus in circumstances where other routes were politically unacceptable, it's not all bad.
    Simon Horsman (B'ham MSc IDD 2010-12)

  3. Well researched and well-written piece. I was reading on Yahoo News yesterday that London would begin to recoup it's investments/profits in the 2012 Olympics from 2021! That's 9 whole years from now. I wonder what would happen in the interim though, with the shrinking economy and all. That said, the games looked and went well

  4. The above piece is a fantastic one. It cited cases of past global events that incurred huge deficits for the host cities and countries, yet it referred to the success of the Los Angeles and Atlanta Olympic games. But I think the piece seems to glorify the negative sides and effects of hosting these global sporting events while trivialising their massive benefits. Nations hosting future events could learn from the failures and errors of previous host cities while borrowing a leaf from host nations who have benefited from the legacies created by these games.

  5. You have done quite some deep research there, kudos. It is folly if not myopia for our leaders to even dream of Kenya hosting Olympics 2024 in the name of grabbing some global fame and glory! If we do, we will be in debts debts and our dear land of Kenya would be sold so that we all move to live in/on Indian Ocean.

    Back to our Africa that is surprising all others with it's impressive progress. We have entrepreneurial prospects that can be utilised for the All Africa Games. With good economic and business strategies and planning, these games have the potential of showcasing what Africa is made of and what we can do. Forget that Africa Village sham at the London Olympics. I have a lot of hope in what Africa can do, that is with the right leadership in such matters.
    All in all, I am against Olympics as they are not pro poor. How can a hungry Somalia or a sick Uganda compete at the same level with the countries that feed and treat their populations through aid? Some of the games are really a show off by the West of how much money they can use to come and take home all the medals. Or even say China where almost all the games equipment are manufactured(sic). There is no parity at all. We Africans need to think ideas of how we can pull all the crowd towards this side...

  6. Gud stuff. After reading this article i wonder why there is always alot of yapping and excitement by host nations when they win bids to host these mega events. The taxes,evacuation e.t.c prove that there is always the other ugly side that we don't know.

  7. This is very debatable because it covers a wide spectrum. It requires analysis from every professional angle possible. We might dwell on the negative like the media does but there are also the positive, might not be very big or seen now but equally significant. Major activities like the Expos and Olympics have an important role to play in our cities. Shanghai for example, after hosting the 2010 Expo, experienced drastic change in urban beauty and urban transport system (they had the money and wouldn't mind spending). Costly they might be or not everyone will be happy, but with proper planning for such a big event, there is always a way to make it a success story. Just because it failed somewhere, shouldn’t deter us from trying. We just need to have better reasons to host one not just because everyone is hosting therefor Kenya should try! This should probably come after we have developed various sectors such that what remains is to add some little inputs. Anyway, it’s a hot story, but I believe that such challenges are what professionals like you and us have been prepared for, there is always a way out.

    1. I sincerely appreciate your take on this. looking at both facets could save us a lot of misery but still; The way out should be a mutual one- clear to the majority struggling citizens-with an approach and expected positive outcome clearly projected in good faith. The way out should have the popular public opinion if it will genuinely be an inclusive one and not a simple project. the cost matters and the return(impact)matters most

  8. No comment. u said it well enough

  9. ...that said, the question that rings at the back of the last bit is...what is the core essence of these events? why are such sporting events held anywhere? if the answer is city's image, profits, environment, positive social and economic stimulus or any other perceived benefit...then my take is a wrong platform is being used to address deep challenges.

    However, much the opportunities that seem obvious, now vague from the foregoing discussion, we might be having a discussion on how to take advantage of short lived events or even natural occurrences (say how to take advantage of the eclipse that is only visible from one end of the earth or a graduation ceremony in a local university_forgive my choice of examples) when actually is common knowledge that not many short term investments reap maximum benefits if profits are anything to go by.

    Like I said in another platform, such short-lived-investment-opportunities provide excitement to everyone, including those far away from the venues. What might prove beneficial to the host country is the spirit the event leaves with the locals and how long it can be sustained for it to be converted to something that can address the mentioned benefits in the long run.

  10. Very interesting post Okwaroh. I’d agree with your analysis on the fact that in terms of economic gains a set-piece sporting event. It’s interesting that in order to justify the spend these events are now forced into the over claim around the legacy – which as you rightly point out is very hard to come by, especially once the show has moved on.

    One thing that was particularly noticeable in the UK is that the Olympics or other major sporting events do capture the public’s attention intensely for a very short period of time. Politicians are not immune from this and do like to set policy that is seen to be in tune to public opinion, for example, as a direct result the UK’s performance the Government extended its funding for UK elite sport the week after the Olympics (which was previously in doubt). Longer term I think the question answer is how you can get the event sponsorship with business from a position of short term advertising to a sustainable interaction with that community after the Games have moved on. Not an easy task!

  11. A very well researched article. You need a column on our dailies. Back to the theme. First, my position is that such events are necessary evils for any country. The economic burden such an event can leave for the country notwithstanding, it is clear that every country need sporting facilities for sports development. Almost all countries have realized the importance of sports to their youth and people in general. Back home, joblessness is killing the youth population, and poor sports development is blamed as one of the major causes. Coupled with lack of facilities to facilitate sports development, the youth are left with only one viable option, academics. The latter is flooded, and furthermore it's not everybody's forte.Who knows, may be I would be an Olympic champion in sport fishing or stone throwing (or discus as they call it) if i was introduced to it earlier and had enough opportunity and space to train..If the government don't see the need to build these facilities without any prospect of a major sporting event, why don't we use Olympics or any other major sporting event as a bait to prompt them to do so. One thing we have to accept is that we as a people will pay debts for loans and grants, with or without Olympics. The difference is that with Olympics, we know the destination of the money, unlike loans and grants taken for ambiguous development projects which usually end up in anonymous bank accounts in some small island they call New Jersey. Lets bid for these events, the long term ripple effects inform my position!