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Expected to Reach 12 Trillion won
The economic benefit of the Expo 2012 Yeosu, which runs for 93 days, is predicted to be “even better than” the 2002 World Cup
Expected to Reach 12 Trillion won
  • By matthew
  • July 30, 2012, 15:07
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Launched on May 12, the Yeosu Expo is a significant international event, and the second Paris-based Bureau of International Exhibitions approved event in Korea since the 1993 Daejeon Expo. Often referred to as an indicator of the advancement of the hosting nation, the World Expo is a global event that a number of countries vie for.

Counted as one of the three global festivals, along with the Summer Olympics and the World Cup, the Expo is truly a global thing. World Expos have a history of triggering economic advancements worth over 10trillion won in their host cities, including Paris, Shanghai, and Vancouver; the Shanghai Expo is estimated to have brought in approximately 80 billion yuan (around 13.2trillion won) in economic benefit.

The Yeosu Expo is expected to achieve no less than that of Shanghai. For the 93-day event, organizers estimate that more than 10 million people, including 500,000 foreign visitors, will visit. Although no accurate statistical estimation is available, it can be assumed that the 10 million visitors will spend at least 50,000 won, resulting in 500 billion won in revenue, more than half the city’s annual budget of 911.6 billion won.

High expectations for promotion of the city and southern coast of Korea as international tourist destinations

According to the Yeosu Expo 2012 Organizing Committee’s estimation, investment in infrastructure will reach 2.159 billion won over the 3 month period, while revenue from tourism will reach 1.24 trillion won. Under such assumptions, the Expo’s effect on the economy is predicted to total 3.4trillion won.

Furthermore, the Expo is expected to induce production worth 12 trillion won across the country, along with the creation of 79,000 new jobs. This production creation would be more than twice that of the 1988 Seoul Olympics (4.7 trillion won) and would match that of 2002 FIFA World Cup (11.5 trillion won).

A local research institute also painted a rosy picture. The Korea Institute of Industrial Economics and Trade analyzed that the real estate and business service fields will reap the most benefit, seeing a 1.927 trillion won production increase, followed by construction (1.7893 trillion won), steel & metal (887.7 billion won), and restaurant & accommodation (812.3 billion won).

For local governments, the Expo is also an opportunity they cannot afford to miss. Not only Yeosu, which envisions promoting the city as Korea’s beautiful Naples Sea, but also neighboring local governments can gain substantial economic benefits. According to the Korea Maritime Institute, out of 12.2 trillion won in production generation nationwide, Southern coastal cities (South Jeolla Province) are expected to account for 5.15 trillion won or 42%, followed by metropolitan cities with 2.24trillion won (18.3%), and southeastern cities with 1.6863 trillion won (13.8%).

Located in the southern coastal area, Suncheon City decided to use the Yeosu Expo as an opportunity to promote its hosting of the International Garden Expo next year. Furthermore, the city can fully utilize the infrastructure built for the Yeosu Expo. South Kyungsang Province (the Southeastern province located just a short distance from Yeosu) is also reaping benefits; Namhae County in the province began operating passenger ships, allowing visitors to travel from Seosang Port to Yeosu in only 30 minutes.

In addition, the Expo is expected to have a positive impact on the ocean industry over both the mid and long-term, with Yeosu trying to establish itself as a comprehensive tourism destination based on its abundant marine resources. Kang Dong-suk, chairman of the Organizing Committee, stated, “The Yeosu Expo will serve as an opportunity for the Namhae (Southern sea) area to expedite its advancement and Youngnam (Kyungsang provinces) and Honam (Jeolla provinces) to see co-existence and mutually advance.”

However, the event has been disappointing due to a slow turnout. The Committee said that the number of tickets booked for the event recorded 1,012,680 as of May 5, only 34% of the originally-expected number.

The number of tickets foreign visitors booked has reached a meager 9,900, far short of the 500,000 the Committee originally expected. A person with the Committee noted, “We expect audience figures, including ticket sales, with the vacation season now approaching as well as through word-of-mouth.”

Up until now, World Expos have played important roles in enhancing the status and image of hosting nations. A case in point is France, which turned into an advanced economy following its construction of the Eiffel Tower which served as the main symbol of and the entrance arch to the 1889 World’s Fair.

In order for us to reap as much benefits as Paris, the efficient and effective use of facilities and infrastructure after the event is important; we need a successful plan that takes the long-term growth of the host city into consideration post-Expo. We can draw lessons from our predecessors. The Aichi Expo 2005 was successful yet the incomes of local citizens remained the same since the Expo was not connected with local economic development strategies, whilst the local government’s debt mounted as it provided 46% of the investment injection. In comparison, the Zaragoza Expo 2008 is regarded as a success in terms of the follow-up management, although it failed to draw tourists during the Expo. Thanks to the event, the most under-developed city in Spain at the time was able to construct a railway and expressway. Since then, the city has seen its image enhanced, with an increasing number of tourists visiting and the hosting of various other international conferences.

Kim Phil-soo, a senior researcher at Hyundai Research Institute, stressed, “The city is advised to figure out how it can optimally utilize the facilities and infrastructure of the Expo. In that sense, the city needs a long-term strategy for developing itself and the southern coast of Korea as international tourist destinations.”