Economic Impact of the 2018 Asian Games in Indonesia

Abstract

Indonesia hosted the Asian Games in 2018, the second time after its hosting in 1962. This multisport event was considered successful and has positively impacted the Indonesian economy in the short and long terms. People’s participation in the event was a key factor in creating multiplier effects for such an event in the Indonesian economy. The objective of this study is to analyze the economic impact of hosting the 2018 Asian Games on the Indonesian economy using the IndoTERM–Computable General Equilibrium (CGE) Model combined with mobile positioning data to estimate its impact on economic growth as well as to track people’s movements and origins in real time and at each venue. Moreover, the socioeconomic impact of the 2018 Asian Games was also analyzed through in-depth interviews and surveys of the participating social enterprise, particularly its employees and surrounding community. The findings suggest that the 2018 Asian Games has had a positive impact on the Indonesian economy. In particular, the GDP of Indonesia can be lifted by as much as 0.05% from the baseline in 2018 due to the event. Furthermore, the impact of the Asian Games on the economies of host provinces is higher than at the national level, particularly in South Sumatra and DKI Jakarta, where most of the games were located. DKI Jakarta and South Sumatra’s GDPs were lifted by 0.22 and 0.54%. Furthermore, the mobile positioning data can track the top three Asian Games visitors by country of origin during the period of the games, which were China, Japan, and Korea. Around 79,000 foreign visitors and two million domestic visitors came to the Asian Games event. Foreign visitors visited the sports venues more frequently during their visit period than domestic visitors. In addition, the 2018 Asian Games increased social enterprise sales and helped increase its brand presence and recognition. The employees, most of whom are women, confirmed that the firm brings benefits in many aspects, such as economy, nutrition, health, education, and women’s empowerment. They also mentioned that the firm provides rewards to employees in the form of scholarships for children and nutritional food support. This will then help reduce poverty and improve the health status of the local community. Therefore, the 2018 Asian Games also indirectly brought socioeconomic impact to increase the community’s livelihood.

This study was a part of a project on the Economic Impact Analysis of the Asian Games 2018, undertaken by the Ministry of National Development Planning/Bappenas in 2018.