Two-and-a-half rings each?

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Korea's Best Olympic Venue? Japan.

Adam Minter is a Bloomberg View columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade.”
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In 2018 the Olympic torch will be lit in Pyeongchang, South Korea, kicking off the first winter Olympics to be held in an Asian country other than Japan. But if South Korea really wants to make history it will decide to share those games -- and their spiraling costs -- with another country.

For years the International Olympic Committee ignored the rising costs and indebtedness associated with hosting the Olympics. But after Vladmir Putin’s $51 billion Sochi Olympics scared off several cities from even bidding for future games, the International Olympic Committee responded last December with a set of reforms. Among them was a provision allowing for games to be co-hosted across international borders, in order to lower costs for individual countries.

Though the provision wasn’t aimed at any particular country, Pyeongchang should be the first to make use of it. Since 2011, the prospective budget for the 2018 event has increased more than 50 percent, from an already steep $7.8 billion to $11.9 billion. (The final bill for 2006 winter games in Turin, Italy was around $1 billion.)

As of December, Pyeongchang still needed eight more facilities, including a $120 million sliding center where the bobsled and luge events can be held. But after shelling out $1.5 billion for a ski resort, Gangwon, the economically underdeveloped state where Pyeongchang is located, is already threatening to forfeit its rights to host the games if the federal government doesn’t chip in more money. (It's not clear what such a forfeiture would mean in practice.)

Even if Pyeongchang manages to find the money it needs, that would just be the start of its troubles. As other Olympic cities have learned, maintaining Olympic venues after the conclusion of the games can be extremely expensive -- especially if nobody wants to pay to continue using them. (That problem has been particularly acute in Beijing, host of the 2008 summer games.) According to an analysis published last week, the cost of maintaining Pyeongchang’s Olympic venues will be approximately $18.9 million annually, including almost $3 million per year for the sliding center.

Shortly after the latest round of IOC reforms, several news organizations reported that the IOC was urging South Korea to give up on the expensive dream of hosting the Olympics solo, and share the sliding events with Nagano, Japan, as a cost-saving measure.

But if the economic logic is hard to argue with, the political symbolism seems to be a tougher sell. Since the election in Japan of nationalist Prime Minister Shinzo Abe, tensions between Tokyo and Seoul -- always high -- have been on the rise. When South Korea’s then-Prime Minister Chung Hong Won politely dismissed the idea of sharing the games last December, it may have been because he was wary of the political and diplomatic costs of asking Japan to lend it a hand in 2018.  The same goes for last week’s petulant announcement by the head of Pyeongchang’s organizing committee that South Korea would only share the Olympics in the case of a natural disaster.

But South Korea shouldn't only consider the symbolic costs of cooperating with Japan -- it should also consider the potential symbolic gains. The country's political leaders would be well-served by looking back to the 2002 World Cup they successfully co-hosted with Japan. It wasn't the preferred option for either Japan or South Korea, each of whom would have preferred to have had the honor of hosting on its own. But politics and practicality brought the two countries together. And the event is still universally cited as a success -- not only for the events on the field, but also because it marked the first time that geopolitical rivals co-hosted a major sporting event.

The 2018 Olympics are different. Pyeongchang won the right to host them, and Japan never even bid. But once again the two countries have the opportunity to step up and offer the world an example of sporting graciousness. Nagano hosted the 1998 Olympics, and it still has its sliding center. According to one report, it’s since been allowed to “rust”, but refurbishing it would be far cheaper, and far friendlier to the environment, than building one in Pyeongchang. It would also only add to the atmosphere of an “Asian Olympics.”

The choice ultimately is South Korea’s and it will probably be dictated by national pride. But the South Korea should keep in mind that bankrupting a small province over a 17 day Olympics is nothing to be proud of, either.

(Corrects spelling of former Korean Prime Minister in seventh paragraph.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Adam Minter at aminter@bloomberg.net

To contact the editor on this story:
Cameron Abadi at cabadi2@bloomberg.net