Past economic gains hint at Olympic-sized potential

Past economic gains hint at Olympic-sized potential, illustration photo/ Source: freepik.com

At an October investor conference, VinaCapital chief economist Michael Kokalari made the bold forecast that Vietnam could outright host the Olympic Games in just two decades. “Hosting the Olympics was a major economic coming-out event in the past for other Asian nations, and we believe the recent US-Vietnam Comprehensive Strategic Partnership could put Vietnam on a path to host it too,” Kokalari said.

This prediction echoes an economic crescendo previously witnessed in Japan, South Korea, and China - each transforming from relative obscurity to global stage dominators with the Olympics as a crowning moment.

“If you look at the historical play book, about a decade prior to those three nations hosting the Olympics, there were pivotal economic developments that strengthened the already robust growth trajectory of each country,” Kokalari added.

In Japan’s case, the Korean War spurred a Japanese industrial production boom during the early 1950s. In South Korea’s case, the country had already been on a solid growth trajectory, guided by a series of five-year industrial development plans, when a major economic and political regime change put the country on an even stronger growth trajectory in the 1980s.

“As for China, the country’s adept handling of the 1997 Asian financial crisis helped instil the confidence of foreign investors to pour massive investments into the country that led up to its hosting the Olympics in 2008,” he added.

Just last week, The Times of India reported Prime Minister Narendra Modi’s ambition for India to host the 2036 Olympics and emerge as an economic superpower by then, leveraging its infrastructure and recent athletic successes.

However, hosting the Olympics is financially demanding. For instance, the Beijing 2022 Winter Olympics cost China more than $38.5 billion, 10 times higher than the country’s estimate, according to Business Insider. Meanwhile, the Tokyo Olympics also ran 130 per cent over its initial budget at $13 billion, with a significant government financial contribution.

In addition to financial resources and structural facilities, a city’s success in hosting the Olympics hinges significantly on its hospitality and transportation infrastructure.

ESPN reported how Paris is preparing for the 2024 Games by expanding its already considerable hotel accommodations, with around 160,000 rooms ready to welcome the world. Paris would expect to host an influx of up to 800,000 Olympic visitors each day.

The Centre for Law and Economics of Sport at the University of Limoges estimated that the Paris 2024 Olympic and Paralympic Games could generate $11.3 billion in benefits and create more than 250,000 jobs in the region.

VinaCapital publishes first ESG report Marking the company's 20th anniversary, VinaCapital released a report on September 12 highlighting the ESG practices that have blossomed into its core corporate culture.