Will the World Cup save the Japanese economy?

Will the World Cup save the Japanese economy?

Will the World Cup save the Japanese economy?

The stadium scene.
May 31 2002 11:00 AM

Japan's World Cup Delusion

The Sapporo stadium: A pricey mistake
The Sapporo stadium: A pricey mistake

Japan, which builds superhighways for teeny villages, billion-yen bridges to empty islands, and flood-control dams for streams that couldn't soak your basement, today introduces its latest public works boondoggle: 10 World Cup stadiums—shapely, modern, spectacular white elephants.

David Plotz David Plotz

David Plotz is the CEO of Atlas Obscura and host of the Slate Political Gabfest.

Unwilling to be one-upped by its former colony/little brother/bitter rival South Korea, Japan has matched its World Cup co-host stadium for stadium. In 1998, France needed only 10 stadiums to host the entire cup. This year, Japan and Korea are using 10 stadiums each, and all but two were purpose-built for the cup. France spent $1.5 billion on its stadiums; Japan alone has spent three times as much.

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Japan's stadiums have laser-guided johns, earthquake-proofing, winged roofs, retractable roofs, grand swooshing roofs. The stadium I visited this spring in Sapporo is a ludicrous marvel. It is a domed stadium with artificial turf, but a grass soccer field sits just outside the east wall. On soccer game days, the wall slides open, a bank of seats retracts, and the turf field—floating on an air cushion—is rolled indoors. Then the wall closes, the turf field is rotated 90 degrees, and—voilà—an indoor, grass soccer stadium. This insanity cost $400 million, plus $15,000 every time they move the field.

The stadium mania is merely the latest manifestation of Japan's dismal obsession with building its way out of its 10-year depression. Japan—a more-or-less socialist country—is trapped in a never ending New Deal (an Old Deal), relying on centrally planned inefficiency to keep the construction industry afloat. Japan persuaded itself that building 10 swank stadiums would boost the economy and is only now realizing just how useless they will be after June. Sapporo stadium will host three cup matches (including England vs. Argentina, then languish. It will be used for a couple of dozen sparsely attended Japanese professional soccer games, some J-pop concerts, the occasional baseball exhibition, and that's it. Japan now concedes that only two of the 10 stadiums will be self-supporting.

The realization that the stadiums are wasteful is the beginning of what will be an enormous Japanese disillusionment about the World Cup. The tournament has genuinely enthralled Korea. Soccer is a passion there, and the cup is a chance for South Korea to prove how rich and classy and powerful it is. Japan does not need a status boost. And most Japanese don't care about the beautiful game. Japanese are diligently feigning interest in soccer, but it's not working. The Japanese team is poor (possibly worse than the U.S. squad), and soccer is a distant third in popularity to baseball and sumo.

But many Japanese have been gripped by the delusion that the World Cup would rescue the Japanese economy. Unemployment is marching up toward 6 percent, banks are essentially insolvent, and the national debt is monstrous (thanks, Sapporo stadium!). They imagine that the cup could solve all this. The Dentsu Institute for Human Studies, a leading think tank, has been forecasting that the World Cup would be the "trigger" that rockets Japan out of depression. Prime Minister Junichiro Koizumi, whose own economic reforms have foundered, signed on to the World Cup recovery plan, too. Dentsu estimated that the cup would add $25 billion to the Japanese economy, increasing GNP by 0.6 percent—more if Japan qualified for the quarterfinals. Moreover, the lavish tourist spending and the good cheer caused by the tourney would lift Japanese spirits, improve consumer confidence, and start Japan back toward the glory of the '80s.

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Now that the tournament is underway, the less pleasant truth is emerging. The expected tourist windfall and consumer boom aren't materializing. Hundreds of thousands of tickets were unsold as of last week. Leading Korean economists just cut their estimate of foreign World Cup tourists by 80 percent, from 330,000 to 66,000. Japanese economists forecast nearly half a million soccer visitors, but Japan will be fortunate to find 100,000. Japan is now expecting 16 percent fewer foreign visitors than normal during the cup, as business travelers and regular tourists stay away. Japanese retail sales are still falling.

Japanese newspapers are publicizing the mediocre economic histories of World Cup hosts. Very little economic growth accompanies the cup. Almost every benefit—more soccer tourists, more TV purchases—is offset by fewer business travelers and less book buying by all those TV-watchers. The United States expected a $4 billion boost from the 1994 cup but took a $4 billion loss instead, according to one study.

Japan's cup delusion indicates a larger phenomenon: In economic matters, Japan is becoming increasingly unlike the American image of Japan. In the American mind, Japan is a nation of efficiency, hard work, and self-sacrifice, in which prosperity only comes from punishing labor. But Japan is embracing the reward-without-work philosophy that is the hallmark of, well, Americans. Japan has become gullible, believing in quack remedies for its severe economic illness. Prime ministers promise salvation through painless economic reforms. Now the World Cup is supposed to restore the economy with some vague soccer magic. Just hold a monthlong soccer fiesta and everything will be glorious again, as if Zinedine Zidane and Luis Figo can make the nonperforming loans vanish or fix the rigid school system or inspire a generation of risk-taking entrepreneurs. Starting today, Japan learns that soccer is a game, not an economic plan.