Why the failed Expo bid could be blessing in disguise

Koh Hyun-kohn
The author is the executive editor of the JoongAng Ilbo.

Busan, Korea’s second-largest city, was crushed by Riyadh, the capital of oil-rich Saudi Arabia, in its bid to host the 2030 World Expo. Koreans cannot take comfort in having done their best, given all the disproportionate resources and energy they spent to host the event. Korea raced for the bid as if the country’s future depended on the result. But sadly, the odds of winning were slim from the beginning.

As the modern-day Saudi kingdom turns 100 in 2032, Saudi Crown Prince Mohammed bin Salman must prove to his people that he is the right ruler for the country, as he won the right to succeed the throne through a power struggle involving brutal purges and crackdowns on critics. He aspires to finish the ambitious 2030 Vision, which includes the one-trillion-dollar Neom City extravaganza. To turn the centennial anniversary into an international celebration, he seeks to stage glitzy international events at home — the 2027 Winter Asian Games, the 2030 World Expo, the 2034 World Cup and the Summer Asiad. The profligacy with oil money had a clear political objective from the start.

Korea most likely misjudged the possibility of hosting the Expo out of over-zealousness. How well the president was informed of the progress is also questionable. Upon deeming the contest to be an uphill battle, the country should have bowed out graciously earlier. But it didn’t. The government defied naysayers and ran to the end as if it had a chance. The government likely didn’t have an exit strategy, either, in case its bid failed. Most were led to believe that it actually had a hidden card. But it didn’t.

In Korea’s hosting campaign, the corporate sector was mobilized overly. The government has often leveraged companies to bid for international events, but never so overtly and broadly as in the Expo case. Executives of major conglomerates had to put aside their business to accompany the president on his overseas trips. An official from a big company confessed that his boss traveled more for campaigning for the Expo than for business interests. Did the corporate leaders really join the president’s trips out of their patriotism? Most of them had weaknesses and worries related to their business, mergers and acquisitions and hereditary succession. Trials are ongoing. Some are fretful as they were close to the former Moon Jae-in administration. There would be no gain from losing favor with the incumbent government. They must willingly comply if they are summoned by the president. Business circles joke that corporate leaders can consolidate their friendship while spending time together on presidential trips.

A bigger question is whether the Expo can produce economic outcomes worthy of putting all national resources on the bid. In the past, the Expo offered a venue for countries to share their industrial and technological achievements. But now, the advance in digital technology allows them to communicate and gain what they need even without the constraints of space and time. As borders have become meaningless thanks to the increased interconnectivity, companies and individuals can pitch on their own without their government’s involvement. Offline events like the Expo have lost their appeal.

The upcoming 2025 Osaka World Expo is in peril. Japan hyped that the economic return from the hosting could exceed 2 trillion yen ($13.6 billion) when it beat Russia for the bid in 2018. The Osaka Expo has entered a countdown to the opening, but not much of the initial enthusiasm is left. Only a select few — such as Korea, France and Luxemburg — among 50 countries who pledged to build their pavilions with their own money have begun construction.

An increasing number of countries decided not to participate in the 2025 Expo — as Mexico, Russia and Estonia did — citing their domestic political situation and cost issues. In the meantime, the venue construction bill for Osaka has doubled to 235 billion yen from 125 billion yen in 2018 due to the jump in construction material and labor costs. The central government, the Osaka city government and the business community are in a pickle as they are supposed to bear one-third of the costs each. Companies also are more reluctant to donate than before.

The Japanese have turned cold, too. The extra costs of an event with questionable economic returns should be borne by taxpayers eventually. They cannot understand why tax funds must go to a one-time event when there are so many issues, such as more money for health care for older adults. In a recent poll by Kyoto News Agency, 68 percent opposed the Osaka Expo. Shunya Yoshimi, a sociologist at the University of Tokyo, negated the need for Japan to host international events like the Olympics or Expo anymore.

Despite such woes of the neighbor, Korean institutions issued a rosy forecast that the Busan Expo will create about 500,000 jobs and 61 trillion won in economic effect. Their grounds are very weak. Expecting 50.5 million visitors to the event is certainly farfetched. The earlier expositions in Milano (2015) and Dubai (2021) drew around 20 million. Osaka hopes for 28.2 million visitors, including 3.5 million foreigners, but it is also wishful thinking.

Korea’s population is less than half of Japan’s. To make matters worse, people over 65 are expected to increase to 13.05 million by 2030, a quarter of Korea’s population. The post-use of the exhibition sites also poses a lasting problem.
There could have been some progress in the long-overdue pension, labor and education reforms and the low birth rate if the government had devoted all the resources to them, not the expo. The failed bid could be a blessing in disguise.