Tokyo Olympic games: No economic miracle for Japan

September 12, 2013, 1:00 PM UTC

FORTUNE — Not long after the ancient Romans hijacked all things Greek and turned them into glorious Roman values — races in the full nude, a.k.a. the Olympics, is just one example — they came up with an excellent ruse to control Rome’s much-feared “mob.” Free bread and free games were the secret, said the cynical Roman elite, of keeping the people placid and complacent.

In 2020, Tokyo will host the descendent of those games. Japan’s capital will host the 28-day jock-fest, it was announced last weekend in Buenos Aries. All across the country, Japanese people cheered the news. Banished would be two lost decades of feeble growth, a long-foreseen debt crisis, the griping over an imminent consumer tax hike, and the leaky troubles of the Fukushima triple meltdown.

Prime Minister Shinzo Abe declared that hosting the 2020 Olympics would be an “explosive agent” for the national economy, and Japan’s stock exchange, the Nikkei, obligingly soared in anticipation of a golden new era.

Not so fast, say the economists. “‘Bread and circuses’ it will most certainly be,” says Kazumasa Oguro, an associate professor of economics at Hosei University. “That will only benefit a few in Tokyo.”

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Oguro warns that, at best, the games will seduce the populace and that we should all try to see through the “spin.” “But I have to say that that moral boost is rather important,” he says.

Just the same, the Tokyo games will not deliver an economic miracle to Japan. Oguro points to the limited estimated impact of the London 2012 Olympic and Paralympic Games on the U.K. economy between July 2005 and July 2017 — £16.5 billion according to a Lloyds Bank report.

“This estimate would be close to the economic impact (3 trillion yen) of the Tokyo 2020 between 2013 and 2020, which is estimated by the Tokyo Metropolitan Government Office, Japan,” adds Oguro, who previously worked as a senior economist at the ministry of finance’s Policy Research Institute. “It’s tiny,” he says. That’s a lower percentage of GDP than the boost generated by Japan’s summer games in Tokyo in 1964, and even Japan’s Nagano winter games in 1998.

As a distraction, however, the Olympics couldn’t come at a better time for a nation looking for any excuse to avoid thinking about its problems. Public debt is already twice Japan’s $5 trillion economy, war drums are beating in Beijing and Tokyo over some far-off disputed islands, and the tsunami and nuclear meltdown-affected areas are still waiting to be reclaimed and rebuilt.

The devastated Tohoku region, which bore a significant brunt of the 2011 earthquake and tsunami, still languishes despite a promise over two years ago from the central government to rebuild the area, a reminder that Tokyo, and not the outer regions, matters most.

Nine hundred days after the disaster, only 1.6% of people living in temporary homes have moved to public housing. That’s a mere 448 homes for 215,000 survivors, now refugees in cramped, uninsulated, jury-rigged accommodation.

While Japan’s central government seems at a loss to explain why there is so little to show for last year’s 10 trillion yen disaster rebuilding budget, Tokyo’s city council says it is ready to splurge on the building and refurbishing of 10 sports venues in the capital to prepare for the Olympics.

To pay for the games, Tokyo has already set aside 400 billion yen garnered from its tax revenues, a total that is less than two day’s spending by Japan’s central government. Initially, at least, it won’t add to the country’s vast debts. Historically, Olympic budgets do have a habit of ballooning by at least four times from their original estimates.

Tokyo will rehabilitate several older venues — even turning its National Stadium into the shape of a bike-helmet, as designed by starchitect Zaha Hadid. But don’t expect the kind of frenzied construction boom that accompanies most Olympics, such as Beijing’s.

With no new subway lines, and a modest proposal to link Tokyo’s two airports — Haneda and Narita — expenditures will not come close to the spectacular transformative days of 1964 when bold programs (equivalent to 3.6% of GDP at the time) such as the Shinkansen high-speed rail line, were launched. The services industry will get the biggest bump, of about 650 billion yen, according to official Tokyo government estimates, followed by construction, with 470 billion yen.

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The tourism industry is often touted as a major winner of the Olympic games, but history does not bear that out, says Tokyo-based entrepreneur and commentator Terrie Lloyd. “One number being bandied about is 8 million extra tourists. But given that they only last 28 days, and there are only 95,000 hotel rooms in Tokyo, it’s hard to see where they’ll all sleep, unless there is a sudden boom in hotel building — which, of course, there could well be.”

Construction boom or no, it’s hard to see corporations coming to the rescue when many see Japan’s growth stalling.

Indeed, Japan Inc. seems unlikely to translate into an economic boost for the population at large, given its recent track record. According to the Bank of Japan, the nation’s top corporations are sitting on massive piles of cash, undermining Prime Minister Shinzo Abe’s yearlong call to boost wages and investment. It looks like the circus this time around will be accompanied by less “bread” than usual.