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What does a new COVID-19 state of emergency mean for Tokyo and its Olympic dreams?

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What does a new COVID-19 state of emergency mean for Tokyo and its Olympic dreams?


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Japan Prime Minister Suga Yoshihide implemented a state of emergency in Tokyo on Thursday, nearly a week after the capital’s governor pleaded with the central government to increase precautions in the city to combat a sudden spike in COVID-19 cases.

Under the state of emergency, which comes into effect at midnight and will remain in place until at least Feb. 7, Tokyo is asking restaurants to close at 8 p.m., for citizens to stay at home, and for businesses to let staff work from home.

Suga has called the restrictions “limited and concentrated” as his government, like all others, struggles to balance protecting public health against maintaining the economy.

Japan’s economy reversed three consecutive quarters of contraction in the July-September quarter last year, rising 5% over the same period in 2019. Economists still predict national GDP will contract 5% in the fiscal year ending April 2021, but it could rebound with over 3% growth the following year. If, that is, the pandemic is well-contained.

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“We will take measures that are most effective at preventing the virus spread rather than shutting down economic activity across the board,” the minister in charge of Japan’s virus response, Yasutoshi Nishimura, said on Thursday. “We are determined to bend the curve during the emergency declaration period.”

Japan is currently riding a new wave of coronavirus cases, logging a record 4,520 new coronavirus cases last Thursday. Cases topped that record again on Tuesday, with 4,912 new infections. The current surge in COVID-19 is primarily in the nation’s capital, Tokyo, which reported 2,447 new cases Thursday—the capital city’s highest daily rate to date.

Besides Tokyo, the prefectures of Chiba, Kanagawa and Saitama which surround the capital will enter a state of emergency too. Japan last declared a state of emergency in April 2020, equipping prefecture-level governors with special powers, such as the ability to requisition food, medical supplies and land.

Until case numbers starting rising again in November, Japan had managed the coronavirus without issuing broad lockdown measures like those seen in many Western countries. In fact, even under emergency legislation, Japan’s governors have no legal right to curtail people’s movement or the operation of business. At most, the prefectural governments can request that restaurants close early, that people stay indoors, and that businesses deploy work-from-home schemes.

There is no punishment for those that don’t comply, although Suga has sought to amend laws that would allow the government to penalize transgressors and provide financial assistance to businesses that do comply.

According to think tank Dai-ichi Life Research Institute, a month-long shutdown could cost Japan some $16.5 billion in consumer spending. While the state of emergency is currently due to end in four weeks, contagion models from Kyoto University suggest it will take two months of enhanced restrictions to bring COVID-19 cases down to manageable levels.

With just under 200 days until the rescheduled Tokyo 2020 Olympics are due to commence on July 23, a prolonged lockdown in Tokyo threatens to scupper Japan’s Olympic dreams entirely.

When former Prime Minister Abe Shinzo reluctantly postponed the Games in March last year, he said that 2021 would be Japan’s final chance to host the 2020 Olympics. International Olympic Committee president Thomas Bach seemed to agree.

“Quite frankly, I have some understanding for this, because you cannot forever employ 3,000, or 5,000, people in an Organizing Committee,” Bach told the BBC in an interview last May. “You cannot every year change the entire sports schedule worldwide of all the major federations. You cannot have the athletes being in uncertainty.”

The Tokyo 2020 Olympics are already the most expensive of any Summer Games in history, according to a November study from the University of Oxford. The event is also spectacularly over budget. Japan initially earmarked $7.5 billion for the cost of hosting the sports meet in 2013. Last month, organizers said that figure had more than doubled to $15.4 billion, with the year-long delay contributed $2.8 billion to the growing costs.

On Monday, Suga pledged Tokyo would host the Olympics as scheduled, presenting the sports meet as an aspirational “proof that people have overcome the coronavirus.” To get there, Suga said vaccine approvals would be sped up so that rollout can begin in February rather than March.

Countries that have already begun distributing vaccines, however, are finding it difficult to scale rollout effectively. National inoculation is proving a slow process, and the Olympics also has to contend with safely managing thousands of foreign athletes, support staff, media, and spectators descending on Tokyo from around the world.

In an interview with Japan’s Nikkan Sports, president of Japan’s Olympic Organizing Committee Yoshiro Mori said Japan will have to decide by May whether foreign fans are welcome to attend the Olympics in July. Inbound tourists are currently blocked from the country entirely.

While economists question whether Olympic-related tourism is really a boon for host nations, blocking overseas fans would likely cut the revenues the Tokyo Games earn from ticket sales. Even Japanese nationals seem skeptical about the event. In a survey run last year by Japan’s national broadcaster NHK, 30% of respondents thought the games should be cancelled.

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Business

Biden’s inauguration was good news for our world

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Biden's inauguration was good news for our world


Good morning. David Meyer here in Berlin, filling in for Alan.

I’m a South-African-British dual citizen living in Germany. So, while I’ve been saddened by the rancor that’s infected American politics over recent years, and while I naturally have personal opinions on the issues that divide the country, I’m not an American voter, and my family and I have no direct stake in the choices that American voters make.

Except when it comes to one particular issue: the climate emergency.

The world is heating up due to human actions, and there is strong scientific consensus that this will have terrible outcomes if not mitigated. We’re seeing them already, in the U.S., in Germany, in the U.K., in South Africa—everywhere. We all share this world, we are all suffering from its degradation, and we must all act to save it.

That responsibility lies with every country, but there’s no getting around the fact that the greatest onus to cut carbon emissions rests on the biggest emitters, namely China, the U.S., the EU, India and Russia. The fifth entry on that list is dragging its heels—and shame on the Putin regime for that. But China, the EU and India are all taking this challenge seriously, and it is of the utmost importance that the U.S., the second-biggest emitter, does the same.

Based on this, I can only applaud yesterday’s inauguration of President Joe Biden. I’d do the same for a Republican president who took the climate emergency seriously—on this side of the pond, it’s much less of a partisan issue, and I hope that will soon become true in the U.S. as well.

As soon as he took office, Biden was a whirlwind of climate-defending activity. Most importantly, he recommitted the U.S. to the Paris Agreement, which aims to keep global warming well below 2 degrees Celsius. The significance of this is enormous.

Before yesterday, countries producing half of all global carbon emissions had committed to carbon neutrality or net-zero emissions. “Today’s commitment by President Biden brings that figure to two-thirds,” said United Nations Secretary-General António Guterres as he welcomed the move.

But, Guterres warned, “there is a very long way to go. The climate crisis continues to worsen, and time is running out to limit temperature rise to 1.5 degrees Celsius and build more climate-resilient societies that help to protect the most vulnerable.”

I have no doubt that the U.S. will be rewarded for bringing its considerable heft to this fight, not only in terms of national security—climate change is a far more fundamental threat than terrorism—but also when it comes to international standing. The country will find it easier to achieve its foreign-policy aims when others see it as a partner rather than a holdout.

It should also go without saying that clean-energy investors will find the new administration’s policies rewarding. Solar stocks are on a tear, thanks to the prospect of more stimulus and subsidies, and the likely continuation of low interest rates that aid financing for new projects. Unsurprisingly, with a green-hued infrastructural push on the way, a BofA note this morning points out that fund managers are throwing money into energy and materials.

All in all, yesterday’s transition provides grounds for climate optimism around the world. But now there’s work to do. More news below.

David Meyer
@superglaze

[email protected]



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Do government deficits matter?

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Do government deficits matter?


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Business

In support of political contributions

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A deluge of feedback in a turbulent week


Good morning.

Most Americans don’t want CEOs involved in politics. A poll conducted last week by Golin and Ipsos found only 41% favored CEOs weighing in on disputed elections, and only 43% wanted them speaking out on impeachment. On the other hand, 74% say CEOs should call for unity and a peaceful transfer of power, and 57% believe it was appropriate for CEOs to speak out after the January 6 insurgency at the Capitol. That pretty well tracks with the way most CEOs and business groups have behaved since election day. They kept their powder dry until all legitimate avenues for disputing the election were exhausted, then came out strongly endorsing the election results and attacking efforts to undermine them. Relatively few have backed impeachment. (You can see the poll results here.)

But how about political contributions? That’s the question raised last week, as a host of companies—Marriott, AT&T, American Express, Best Buy, Cisco, Comcast, Dow and Amazon among them—suspended campaign contributions to members of Congress who challenged the election results. Another large group—Microsoft, Boeing, Blackrock, Coca-Cola, JP Morgan, Ford, GM, UPS, Goldman Sachs and Citigroup—temporarily halted all political contributions to members of both parties. (Quartz has a more comprehensive list of what companies did here.)

Some business leaders are even contemplating permanently shutting their political action committees and exiting the money game altogether. But absent a broader overhaul of campaign finance—which is unlikely anytime soon—I think that’s a mistake. Most big companies remain balanced players in the money game, dividing their dollars roughly equally between members of each party. Walmart, for instance, has kept its contributions at exactly 50-50. Their strategies have less to do with trying to influence outcomes, and more to do with assuring they have access to whoever wins.

The more important question for 2021 is how big business uses that access. There are a host of issues where business has the potential to help broker positive outcomes for the U.S. economy and society: economic stimulus, infrastructure, worker training, climate change. On each of these, business leaders occupy the center, and can help bring the parties together to solve urgent problems.

But on tax and regulatory issues, in particular, corporations will be playing defense. And they’ll be tempted to use what influence they can muster to seek tax breaks and regulatory exemptions that aren’t in the broader public interest. That’s where the commitment to stakeholder capitalism will be tested. The nation desperately needs business involved in government. But business, now more than ever, needs to use its influence to focus on solving long-term challenges.

News below.

Alan Murray
@alansmurray

[email protected]



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