GO
Loading...

Why Does London Even Want The $14 Billion Olympics?

Mark Sappenfield|Christian Science Monitor
Friday, 27 Jul 2012 | 2:39 AM ET

As London prepares to throw the world a $14 billion party, it seems fair to ask the question: What does it get out of the bargain aside from some shiny medals, pleasant memories, and an excess of David Beckham bobblehead dolls?

English Phone BoothP
Photo: Kathe De Witt | Getty Images
English Phone BoothP

Salt Lake got to show that its Mormon community was open to the world. Turin got to show that it was not the Detroit of Europe. China got to give the world a glimpse of the superpower-to-be. And Vancouver got to show the world that Canadians are not, in fact, Americans.

But London? It hasn't had anything to prove to the world since Waterloo, and the supposed economic benefits of hosting the Olympics have long been dubious. Some experts say the Olympics are a net gain, boosting trade and global prestige. Other experts say those experts are bonkers. One thing that seems certain is that the cause of the current global malaise is not a shortage of Olympic velodromes.

So have cities like London, Paris, Madrid, and Tokyo – who have all bid for the Games at some point in the last decade – simply taken leave of their senses? Why does any city without a global chip on its shoulder want the Olympics, with all its traffic jams, stadium projects, and cosseted International Olympic Committee barons?

London's answer to that question gives a hint at what the Olympics are becoming, as well as how hosting the Olympics could potentially leave a lasting and positive impact on a city that doesn't really need them.

In a word, the answer is: infrastructure. True, the average citizen does not go to bed on Christmas Eve dreaming of tearing open "improved infrastructure" the next morning, but for city officials, its four syllables are a siren song. While Salt Lake, Beijing, and the rest saw the Olympics as a ticket into an exclusive club – the cost of buying dearly desired global cred – London wants to show the world how to use the Games to resuscitate forgotten parts of a city.

Olympic Park is not remotely near anything a tourist would recognize as London. It is in Stratford, which over the years had become London shorthand for "industrial blight." And the Olympics were a unique lever to effect a profound transformation.

"The single massive positive impact of the Olympics is the clearing and redevelopment of a vast, unusable space," says Tony Travers, a professor at the London School of Economics who has followed the Olympic process here. "It is now all cleaned up and ready to use for a city with a fast-growing population."

Without the Olympics, Professor Travers doubts whether the land would ever have been reclaimed. At the least, he says, it would have taken as many as 60 years. The reason for that is as obvious as the $14 billion estimated budget for the London Organizing Committee of the Olympics Games (LOCOG).

Featured

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video

  • Jan Dunning, CEO of St Petersburg-headquartered hypermarket chain Lenta, says the situation in Ukraine has had no impact on the group, as consumer confidence remains unaffected in Russia.

  • Vincent Deluard, European strategist at Ned Davis Research Group, says the strong euro is a problem for the region's companies, especially for the large exporters.

  • European shares closed higher on Thursday as investors brushed aside concerns regarding Ukraine and focused instead on Wall Street earnings and the latest U.S. jobs data.