When economists consider the costs of the Tokyo Olympics playing out as we speak, they naturally focus on dollars spent. Though the official figure is in the $15 billion range, private estimates can approach double that amount.
Yet the real one is what economists call “opportunity cost.” Since the moment in 2013 when then-Prime Minister Shinzo Abe scored the 2020 Games, his government had every opportunity to implement his bold-sounding plan to end deflation and recreate a little 1964 magic.
Yes, yes, these are the Tokyo Games. But you’ll notice that Tokyo Governor Yuriko Koike barely has a role in them. It’s all about the ruling Liberal Democratic Party harnessing a few weeks in the global spotlight to increase Japan’s geopolitical clout 1964-style.
That year, Tokyo staged one of modern history’s truly spectacular Olympiads. Japan’s postwar coming-out extravaganza announced its emergence as a technological powerhouse about to upend the world order. Tokyo wowed the world with skyscraper-strewn, neon-lit skylines, avant-garde stadiums and futuristic bullet trains zooming by at 130 miles per hour.
Japan’s big return to the global community was courtesy of Abe’s grandfather, Nobusuke Kishi, the prime minister who scored the 1964 Games. For Abe, Tokyo 2020 was a means of both closing the family-legacy circle and recreating the post-1964 economic boom 56 years later.
Covid-19 flipped the script, of course. Not only did Japan have to pay billions more to delay the 2020 Games by a year. It also lost out on the 40 million tourists Abe’s party expected to attract surrounding the event.
A volunteer follows the action from an empty stand during a water polo match of the Tokyo 2020 … [+] Olympic Games on July 25, 2021.
Photo by David Ramos/Getty Images
But the sprawling gulf between the tech renaissance 1964 proved to be and now is what amazes most. 2020 finds Japan as Asia’s second-biggest economy, behind China, in a technological rut.
Japan Inc., which once changed everything with the Walkman, computers, Trinitron color TVs, new gaming systems now lags South Korea in smartphones and memory chips. One of the biggest complaints from visiting sportswriters: troubles with mobile apps and websites they’re required to use. Not a great look.
The Abe era’s obsession with putting on a great show to rival granddad’s tells you everything you need to know about why Japan’s economy is falling behind.
In December 2012, Abe returned to power five years after a one-year 2006-2007 stint as premier. Abe 2.0 was suddenly a bold reformer—a Japanese amalgam of Margaret Thatcher and Ronald Reagan. He laid out a multi-pronged program to cut red tape, shake up a change-averse bureaucracy, incentivize innovation, empower women and attract foreign talent.
Japan’s former Prime Minister Shinzo Abe (left) and Thomas Bach, President of the International … [+] Olympic Committee (right).
Photo by Kim Kyung-Hoon-Pool/Getty Images
Instead, Abe, between 2012 and 2020, really had a two-pronged plan: aggressive Bank of Japan easing and Tokyo 2020. Abe and his LDP blundered by thinking that rekindling the collective spirit that lifted the nation after 1964 would, somehow, magically, euphorically, restore the innovative energy of years past.
This might sound oversimplistic. But from the moment Japan secured the Olympics in 2013 until Covid-19 hit in early 2020, the vast majority of Abe’s top upgrades went quiet. Either because of distraction or sincere hope that the Olympics would be an economic game-changer, the Abe years were a reform dud.
Even the perceived successes have lost their sheen. Japan’s apparent progress in tightening corporate governance didn’t avoid the Carlos Ghosn fiasco at Nissan Motor. It didn’t head off a recent scandal at Toshiba Corp. concerning board seats. And a decade on, who’s going to jail for the safety failures that resulted in the nuclear crisis at Fukushima?
The deflation that the Abe years had supposedly defeated, meantime, is trying to make an untimely return. As the West frets runaway inflation, the most Japan’s core consumer prices could do was perk up 0.2% in June from a year earlier. The upward price pressures Japan actually is experiencing are the bad kind: importing pricy commodities.
People wearing face masks pose for photographs next to Olympic Rings on March 24, 2020 in Tokyo, … [+] Japan.
Photo by Carl Court/Getty Images
What is Japan doing about it? Nothing obvious. In mid-2020, Japan tossed an additional $2 trillion of stimulus at the economy, or 40% of gross domestic product. The BOJ larded up its balance sheet with additional asset purchases. Yet since Yoshihide Suga replaced Abe last September, he’s spent far more time avoiding cancellation of the Olympics than recalibrating the economy.
Besides, Prime Minister Suga’s team figured, Covid risks would recede soon enough, and Japan would pull in many millions of tourists by July 2021 to add vigor to the economy. That gamble has aged very poorly.
The best-case scenario now is that Tokyo 2020 isn’t a super-spreader event that upends the economy in 2022 and beyond. Or that history doesn’t remember these few weeks as a gold-medal caliber incubation opportunity for a new Tokyo variant.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
