This year, after a successful Asian Games in 2018, Indonesia submitted its bid to host the 2032 Olympics. Should Indonesia be successful, it will host the first summer Olympics in a Muslim-majority country.
Indonesia has become an economic powerhouse in Asia and wants to enhance its profile in the international arena through the use of sport as a soft power tool. But it could face tough competition from other Asian countries in its Olympic bid. India could soon join the race and the idea of a joint North-South Korea bid has also been floated. A bid from Germany is also expected, and the European country plans to spread the tournament across 13 cities, which may work in its favor.
Indonesia is on course to become one of the world’s 10 largest economies by 2030, according to a forecast by the Standard Chartered bank. But while the country enjoys economic success, it still lags behind other Asian countries when it comes to investor preference.
Olympic host countries tend to make tangible reputational gains. And those are what Indonesia is aiming for. A study by the National Bureau of Economic Research found that “the Olympic effect is robust; hosting the games tends to increase a country’s openness substantively and permanently.”
Indonesia’s successful hosting of the Asian Games adds to its chances of being selected as the host by the International Olympic Committee.
“The experience of the Asian Games—we believe it was very successful—has created the confidence that we can do something bigger,” said Erick Thohir, the president of Indonesia’s national Olympic committee.
This has been echoed by IOC president Thomas Bach. “Here in Indonesia there is a great combination of friendliness and efficiency and this is what the Games are about,” Bach said during the Asian Games last year.
Olympics Not Always Beneficial to Host Country
Hosting a major international sporting event is an economic gamble. It requires massive upfront investments that don’t always pay out. The 2004 Summer Olympics in Athens cost nearly $11 billion—almost double the initial budget. The 2016 Rio Olympics also went over the planned budget. Brazil had to cut its healthcare and police spending to afford the extra costs.
Most venues that are built by the host countries also usually lie abandoned afterward. Bejing’s 2008 Bird’s Nest Olympic Stadium costs $11 million a year to maintain. The 91,000-seater mostly sits unused.
Sofia Sakorafa, Greece MP and former Olympian, stated of the 2004 Athens Games venues: “We are left with installations that are rotting away because we don’t even have the money to maintain them. A lot of entrepreneurs and property developers got rich very quickly.”
Hosting the Olympics also adds to inconvenience for the locals and increases cost to taxpayers. Locals are also displaced to make way for tournament infrastructure.
An estimated 1.5 million people were forcibly evicted from their homes with minimal compensation to make way for Beijing’s Olympic Infrastructure. And residents near Rio de Janeiro’s 2016 Olympic Stadium, whose homes were set to be demolished, were forcibly removed in a “bloody confrontation between police and residents.”
But Indonesia may have a better experience. Because of the Asian Games, Indonesia has laid down some of the infrastructure groundwork needed to host the Olympics. The Asian Games also received support from locals, who flocked to watch matches and support athletes. After the games, locals in Jakarta also benefited from the facilities built, Thohir told the Nikkei Asian Review.
While Indonesia will face tough competition from Germany and India, being awarded the bid may open the country to more investors and global prestige. Even if Indonesia’s wins its Olympic bid, it is decades away from knowing whether the gamble paid off.