[Yoo Choon-sik] Chance to make Yeosu island fair a success

The World Island Fair closed last week after offering exhibitions, performances and various hands-on activities related to the oceans, islands and their ecosystems in and around Yeosu in Jeonnam-Gwangju for two months. Yeosu City said the fair differed from conventional expositions by adopting an experiential, travel-oriented format.

The fair attracted attention as a major international event hosted outside the capital following the World Scout Jamboree in Saemangeum, North Jeolla Province, which ran into serious problems in 2023. The Saemangeum Jamboree drew criticism for using an international event to advance the local government's ambition to develop Saemangeum while prioritizing showmanship over safety.

Expectations that this event would be successful enough to put the controversy of three years earlier behind us were particularly high because it was being held under a Democratic Party of Korea government that enjoyed strong public support, counted the region encompassing Yeosu among its core political strongholds and commanded an overwhelming parliamentary majority.

Yet the Yeosu fair fell far short of those expectations and exposed numerous problems of considerable breadth and severity. According to the organizing committee, cumulative attendance reached about 2.54 million, or 84.7 percent of the 3 million target, which appears to be a reasonably good result.

Ticket revenue, however, totaled only about 4.1 billion won ($3 million), less than half the target of 9.6 billion won, partly because 8 in 10 visitors entered free of charge. The organizing committee said promoting the value of islands and stimulating the local economy mattered more than generating ticket revenue, but further analysis will be needed to establish whether those benefits actually materialized.

With the outcome still uncertain, the controversies that emerged before the fair opened now require a clear and independent examination. The direct project budget, which was set at 24.8 billion won when the central government approved the event in 2021, ultimately nearly tripled to 72.3 billion won, while total spending reached 185.9 billion won when related projects were included.

Yeosu built a new main venue on reclaimed land instead of using the existing World Expo site, spending 33.3 billion won, or 46 percent of the direct project budget, on construction. Many visitors also ridiculed the poor quality of some attractions, including a performance featuring a one-ton truck crudely draped with fabric to resemble a boat.

Fortunately, the Yeosu World Island Fair concluded without serious accidents or other incidents of the kind seen at the 2023 Jamboree, but it left behind challenges no less substantial. The fair ended without delivering benefits commensurate with the costly construction of new facilities, and the provincial government reportedly has yet to draw up plans for their future use.

Even before the 2023 Jamboree, there had been other cases in which major international events secured by local governments failed to deliver their promised benefits and left residents with lasting problems.

The Formula One Korean Grand Prix in Yeongam, South Jeolla Province, was one such event, pursued by a local government in the name of regional development only to incur enormous losses.

In 2006, South Jeolla Province secured the event without prior central government approval and despite a feasibility study that projected optimistic returns while failing to account properly for major costs. The four races held from 2010 accumulated operating losses of 190.2 billion won. The event was discontinued in 2014 after incurring substantial operating losses in addition to the cost of building the circuit.

The 2014 Incheon Asian Games are also frequently cited as a case in which demands for development from local politicians and residents increased the financial burden. Instead of using the existing Munhak Stadium, demands from residents and politicians led to the construction of a new main stadium costing about 470 billion won.

Figures released a year after the Games showed that roughly 1 trillion won in event-related debt remained and that the newly built venues were recording substantial operating losses each day.

Meanwhile, the 2013 World Rowing Championships in Chungju also became a prominent example of a wide gap between the economic benefits projected during the bid and the actual costs. The provincial government projected about 115.9 billion won in benefits, but costs ballooned to roughly twice the planned amount, and an analysis estimated a net loss of 85.2 billion won.

Naturally, we cannot expect every international event to generate direct revenue exceeding the costs. Regions with few opportunities to gain wider recognition can reap intangible benefits by hosting a major event, preparing for it with participation from citizens and experts and staging it under professional leadership.

Throughout this process, however, all matters must be discussed and decided transparently and on the basis of evidence. Those seeking to exploit an event for improper purposes must be rigorously excluded.

The problem with South Korea's system of local government is that accountability mechanisms and checks do not function adequately in relation to local authorities' financial circumstances and capacity to carry out projects.

Even local governments with limited fiscal self-reliance that are heavily dependent on central government support are often allowed to pursue large projects, while procedures for assessing their feasibility and long-term financial burdens sometimes amount to little more than perfunctory reviews.

When projects fail, the losses remain on local governments' books and can lead to additional central government support, ultimately shifting the burden beyond residents to taxpayers nationwide. Yet, there is a persistent failure to fully establish the causes and hold those responsible to account.

From that perspective, the Yeosu World Island Fair must not simply be remembered as another local event that achieved limited success in its preparation, execution and results. This case demands an objective and transparent investigation and analysis, with those responsible punished if wrongdoing is established and political accountability imposed where warranted.

That would allow the Yeosu World Island Fair to deliver a major achievement, albeit one unrelated to islands.

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Yoo Choon-sik

Yoo Choon-sik is a senior AI correspondent covering Korea for MLex Market Insight. He has worked for international media organizations for about 30 years, including as Reuters' chief economics correspondent in Korea. The views expressed here are the writer's own. — Ed.

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