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Monday, April 4, 2005

JAPANESE PERSPECTIVES

Expo no ordinary economy booster


Aichi Expo 2005 -- the first world exposition of the 21st century -- has attracted tens of thousands of visitors since it opened March 25. Under the theme of "Nature's wisdom," the expo is providing the governments, companies and people of the 120 participating countries a place to exchange ideas and address a host of issues confronting the world, including environmental degradation and population issues.

It is a timely theme, because the expo is being held just as the world finds itself groping for a way to coexist with nature and with sustainable development.

Japan's businesses fully support the event. Keidanren Honorary Chairman Shoichiro Toyoda, who is also the honorary chairman of Toyota Motor Corp., is chairing the expo association, and a number of major firms have their own pavilions at the expo.

The event is raising expectations of an economic windfall. The Chubu area, which includes Aichi Prefecture, is home to a number of briskly performing manufacturers who have been the driving force behind the nation's economic recovery.

The Aichi Prefectural Government estimates that the exposition and newly opened Chubu International Airport will boost the local economy by 2.2 trillion yen. In fact, companies in the prefecture are willing to hire more workers. The effective ratio of job offers to applicants stands at 1.63 -- well above the national average of 0.91.

Industrial output in the prefecture has risen by about 13 percent since 2000 -- much faster than the national average of 2 percent.

In the preparation phase, the project boosted demand in the construction sector, and the hotel and tourism industries are expecting higher revenues during the expo.

The solid performance of Aichi firms is reflected by their share prices. The stock of one local department store listed on the first section of the Tokyo Stock Exchange shot up at a pace unrivaled by other issues.

These benefits are not limited to Aichi Prefecture; they are spilling over into other parts of the Chubu region as well. As Aichi prepared for the expo, companies in Shizuoka Prefecture started getting more orders, and local travel agents began doing brisk business in package tours. Shizuoka expects visitors from other parts of the country and overseas to drop by as well.

In Mie Prefecture, which sits to the west of Aichi, industrial plants are being built at a rapid pace. This is because the improvement of the roads and highway networks, carried out in time for the expo and the opening of the new airport, has substantially increased the value of the local industrial infrastructure.

People may think that large events like the expo only have a temporary economic impact, but the exposition is creating a positive cycle that is expected to benefit the economy for a much longer time.

Yoshio Nakamura is a senior managing director of the Japan Business Federation (Nippon Keidanren).


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