Hosting major sporting event is costly, both in accounting and economics sense. Even for developed country it still is costly, let alone for developing country like Indonesia. Most of the budget goes to infrastructure to welcome delegation from other countries. This year Indonesia is hosting the largest sporting event in Asia: the 2018 Asian Games, officially known as the 18th Asian Games. The host cities are Jakarta and Palembang. The opening ceremony will be held on August 18, a day after Indonesia independence day on August 17, and the closing ceremony will be held on September 2.
Actually, Hanoi was selected to host 2018 Asian Games, it won the bid against Surabaya and Dubai on November 2012. But on April 2014, Vietnamese Prime Minister announced Hanoi's withdrawal from hosting 2018 Asian Games due to economic reason. Vietnam couldn't afford to finance the major sporting event. The USD 150 million estimated budget by Vietnamese government was considered far from enough to host the event.
After Hanoi's withdrawal, Jakarta was appointed as host by the Olympic Council of Asia (OCA) and Palembang as supporting host. Surabaya already decided to drop its bid to host. Jakarta was chosen because the city already well-equipped by sports and tourism facilities. Jakarta has many venues and lodging for athletes, as well as hotels and restaurants. Jakarta was considered ready to host the event by OCA.
So, how much money spent by Indonesia government to host 2018 Asian Games? The number is expected to reach IDR 28 trillion, or equivalent with USD 2 billion. Most of the money spent on venues, infrastructure and transportation facilities. That's why Vietnamese Prime Minister decided to drop Hanoi as host, because the cost is astronomical. As a comparison, Russia spent USD 14.2 billion to host the 2018 World Cup.
IDR 28 trillion (USD 2 billion) is a lot of money. To give better perspective, Indonesia gross domestic product (GDP) for 2018 is expected to reach IDR 14,000 trillion (USD 1 trillion). So, the money spent on the 2018 Asian Games is equal with 0.2 percent of Indonesia economic output. Let me repeat, it is equal with 0.2 percent of all goods and services produced by all residents for 1 year. That's a lot of money. The worst part of it is many venues and infrastructure will be useless or underutilized after the event is over. A lot of taxpayers money spent for just 2 weeks event.
The curse of hosting sporting event also can be found in Olympic and World Cup host cities. Many of those cities are still in debt years after the event is over. The only city that ended up in surplus after such event is Atlanta, because it already had venues and infrastructure, no need to build new ones.
Of course some of those venues and infrastructure can still be used after the event is over, but maybe they will be underutilized. Because they are built specifically for the event and to welcome delegations from other countries, not to fulfill needs of residents.
Is it worth it to throw all those money for 2 weeks event?
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