Assessing the Jakarta 2032 bid: Will the Olympics come to Southeast Asia?

The 2018 Asian Games opening ceremony. Photo: Fars News Agency, CC BY 4.0, via Wikimedia Commons

There are several issues Indonesia’s National Olympic Committee must consider as it prepares a bid for the 2032 games. Although hosting the games brings prestige and other benefits, is Southeast Asia’s most populous nation in with a shot at holding the Olympics?

By Try Ananto Wicaksono

Buoyed by the success of hosting the 2018 Asian Games, Indonesian President Joko “Jokowi” Widodo confirmed that his country will bid to host the 2032 Olympics. The country’s National Olympic Committee (NOC) has put forward Jakarta as the prospective host and its members are confident that the nation’s relatively stable climate, security and vast natural and culinary attractions can help produce a compelling case.

Why is Indonesia bidding to host the Olympics?

There remains a feel-good factor following Indonesia’s successful hosting of the Asian Games two years ago and this is a key driver for the bid. The Olympics are a step up from the Asian Games. Millions of people watch the coverage all over the world. That gives the host country an opportunity to boost its global image.

In addition, the 2032 Olympics presents the perfect opportunity for Indonesia to show its capability as “a big country”, according to Muliaman Hadad, Indonesia’s ambassador to Switzerland.

Although the Olympics have never headed to Southeast Asia, Indonesia is not the first ASEAN nation to bid. Both Bangkok and Kuala Lumpur  applied to host the 2008 summer Olympics, but neither made the International Olympic Committee’s (IOC) final shortlist.

Olympics do not come cheap

Hosting the Olympics means spending big. Andrew Rose, an economist at UC Berkeley told CBS News that “hosting the Olympics is just a terrible idea,” adding that almost every Olympics goes over budget, leaving the host city repaying significant debts. In 2016, Brazil suffered huge losses hosting the Rio de Janeiro Olympics. The official cost estimate is US$12 billion, but other experts say it could have exceeded US$20 billion.

The country plunged into recession, in part due to the costs of hosting the Olympics. The government responded by cutting spending on healthcare and education and police went unpaid. Similarly, China spent US$44 billion for the Beijing 2008 games, almost twice as much as it had estimated.

Is hosting the Olympics a guaranteed loss-making exercise?

Cities can host the Olympics at a profit, as Los Angeles did in 1984. Peter Ueberroth, president and general manager of the Los Angeles Olympic Organizing Committee, committed to prioritizing pre-existing facilities instead of building expensive new ones.

Where new facilities were built, Ueberroth gained large contributions from corporate sponsors, brought in US$139.9 million from ticket sales and drove a hard bargain when selling broadcast rights. The result was a profit of US$215 million.

Photo: Los Angeles, CC BY-SA 3.0, via Wikimedia Commons

The IOC has since put processes in place that significantly reduce the cost of bidding and hosting the Olympics. Its New Norm policy encourages hosts to use existing sports infrastructure wherever possible, only creating new facilities if there are long-term sporting and community benefits.

Sponsors can help with the logistics and operation of an Olympic Games. Lord Sebastian Coe, who led London’s successful 2012 bid, described the support of sponsors, who contributed £750 million (US$1.2 billion) to making the games a success, as “profound”.

Furthermore, the IOC offers support with a financial contribution from the revenue it raises through its broadcast agreements and The Olympic Partnership sponsorship program. In addition, the IOC directs the Operating Cost of Goods Sold (OCOGs), which manages domestic sponsorship, ticketing, and licensing programs within the host country.

Jakarta could face numerous challenges as hosts

Ahead of Rio 2016, Brazil faced stadium construction delays and transportation concerns. According to Andrew Zimbalist, a Smith College professor of economics, Brazil spent over US$20 billion to get US$2 billion in infrastructure return. The argument that governments should focus its spending on things that its people need such as plumbing, sanitation, and sewers will only intensify in the wake of the coronavirus pandemic.

However, Brazil was at the time in political crisis with President Dilma Rousseff on trial for impeachment. A combination of street protests, a flailing economy, and the spread of the Zika virus left Brazil caught in a complicated and atypical confluence of events.

The potential for similar protests in Indonesia depends on how well the government manages economic recovery post-COVID-19, insurgency among Papua’s indigenous people, and other communal conflicts. It must get its priorities right. Indonesia’s government must now start doing its cost-benefit analyses to calculate the long-term effects of hosting the Olympics.

Barcelona. Photo: Leonhard Niederwimmer / Pixabay

Hosting the games can bring opportunities

Hosting the Olympics could be a huge opportunity for Indonesia to gain the global spotlight by bringing in foreign investment and international tourists. According to Coe, since Barcelona hosted the 1992 Olympics, the city has never been out of the top four tourist destinations in the world.

It can offer the opportunity to upgrade and revitalize existing facilities, although lessons must be learned from previous Olympics to avoid stadia becoming “white elephants”, particularly as Indonesia spent 102.1 billion rupees (US$7.2 million) building and upgrading facilities for the Asian Games.

Hosting the Olympics could also boost the region’s environment. One study showed that Beijing’s traffic restrictions during the 2008 Games led to a 96,000 metric ton-reduction in the city’s carbon dioxide (CO2) emissions.

The link between CO2 emissions and the Olympics

In fact, the IOC considers CO2 emissions per capita as an indicator of environmental awareness when considering bids. During the 2008 bidding process, it ruled Bangkok and Kuala Lumpur out because of their poor environmental awareness.

Indonesia was the world’s fourth-largest emitter of greenhouse gases in 2015 behind China, the US and India, the latter of whom is also bidding. With India’s emissions projected to increase by 90% between 2014 and 2030, that could help Indonesia’s chances should the IOC look unfavorably on India’s emissions.

Nevertheless, despite high CO2 emission levels, China hosted the 2008 Olympics in Beijing. To do so, its government implemented ad hoc measures including taking millions of cars off the road and shutting down hundreds of factories.

Suheim Bin Hamad Stadium in Qatar. Photo: km2bp @ Mapillary.com, CC BY-SA 4.0, via Wikimedia Commons

Does Indonesia have a realistic chance of hosting the Olympics?

The IOC rotates the Olympics between continents and will likely seek to hold the games in Asia in 2032, but the early indications are that Indonesia and even India could miss out. The most likely destination appears to be Qatar, which emits far less CO2 than both.

The country has already developed state-of-the-art sporting venues and transportation networks as part of its preparations to host the 2022 FIFA World Cup. It also has a proven track-record and significant experience, including hosting the 2019 Athletics World Championships.

But nothing is guaranteed. London won the 2012 games even though Paris were the overwhelming favorites. After Paris lost out, it bid again and will host in 2024. By laying solid foundations with this bid, Indonesia could be well placed the next time the IOC looks to Asia–perhaps in 2044.

But the warnings are clear: if the government does not commit fully, it risks making the same mistakes that left Rio crippled by debt. It’s a long shot, but putting the principles that made Los Angeles 1984, Beijing 2008 and London 2012 successful at the heart of Jakarta’s bid for the 2032 games could finally bring the Olympics to Southeast Asia.

About the Author

Try Ananto Wicaksono
Try Ananto Wicaksono is a student with two master's degrees programs in Business Law and Public Policy from Gadjah Mada University (UGM) and School of Government and Public Policy (SGPP) – Indonesia respectively. He is also an alumni of the Institute for Development of Economics and Finance (INDEF) School of Political Economy (ISPE) Batch 2020. His interests include international political economics, international economic law and international relations.