Can Next Year’s Expo in Japan Calm the Troubled Waters of the World?

The Yomiuri Shimbun
The venue of the 2025 Osaka-Kansai Expo, under construction, is seen on March 10.

The 2025 Osaka-Kansai Expo will mark the start of its one-year countdown next month. It will be an impressive international event in which more than 150 countries and regions have pledged to participate. Osaka will reprise the role of expo host, which it previously played 55 years ago. This festival has the important role of transmitting new values for the 21st century to the world from Japan. Participants from all over the world are expected to unite and work together to make the event successful. However, the seriously unsettled world situation is casting a shadow over the event.

Since last year, one of the biggest Expo-related topics has been the cost of developing the venue and constructing necessary facilities. Last October, the Japan Association for the 2025 World Exposition, the event organizer, estimated that the cost would grow by 90%, from the original ¥125 billion to ¥235 billion. The central government and the business community will each pay one-third of the cost, with Osaka City and Osaka Prefecture together also covering one-third. This arrangement will increase the tax burden in Japan. It is no wonder that dissatisfaction is growing among the public.

The most salient reason for the increase in the construction cost is the soaring expenses for materials and labor. The recent trend of rising prices in the world is significantly affecting this situation. It goes without saying that the major background factor is Russia’s aggression in Ukraine, which began with its February 2022 invasion.

The Osaka-based Asia Pacific Institute of Research offers an interesting analysis of the impact of Russia’s aggression on the economic trends affecting the Osaka-Kansai economy.

Russia’s aggression in Ukraine has had a great impact on trade between the European Union and Russia. The EU’s history of dependence on Russia in the energy sector, including oil, is a major example of the two sides’ strong economic ties. As the West continues to impose economic sanctions on Russia, it becomes difficult for this dependency to go on. That means the economies of the EU will suffer a certain amount of damage. The EU also has strong economic ties with China, and China has ties with Japan, including the Kansai region. Ultimately, an economic slowdown in China will affect the Osaka-Kansai economy to some extent.

The reality is that so long as Russia’s aggression in Ukraine continues, not only will prices rise, but indirect economic damage to the Kansai region may also continue. In Russia, President Vladimir Putin won a five-way presidential election in March and has once again justified his aggression against Ukraine. There is no sign that the aggression will cease.

The Nikkei Stock Average on the Tokyo Exchange recently hit an all-time high for the first time in about 34 years. The recovery in stock prices is highly expected to lead the revival of the economy. Some people say that the Osaka-Kansai economy is gradually recovering from the impact of the coronavirus pandemic. However, in light of Russia’s stubborn attitude, it seems unlikely that the economic situation in the Osaka-Kansai region will improve significantly before the opening of the Expo in April 2025.

On top of that, the Gaza crisis has continued since last year as well, also affecting the world economy. It is increasingly difficult to see the economic situation optimistically.

Preparing for the Expo, participating countries are to build pavilions to introduce their cultures and technologies to visitors. However, construction of these pavilions has been delayed by rising prices and other factors. Singapore is the first country to start building its pavilion, with construction beginning only about two months ago. Some countries are still looking for building contractors. There is fear that some pavilions may not be completed by the time the Expo opens.

Russia, the most significant source of the present chaos in the world, announced last November that it would not participate in the Expo. It is said that Russia decided not to participate because Western countries including Japan are criticizing it over its continuing aggression against Ukraine. Previously, Mexico and Estonia had announced that they would not have pavilions at the expo. Although this does not seem to have influenced Russia’s non-participation, it would be undesirable for more countries to follow them to the exits.

Political Pulse appears every Saturday.

Norimasa Tahara

Norimasa Tahara is an editor in the editorial bureau of The Yomiuri Shimbun Osaka.