On Nov. 1, Osaka residents will vote for the second, and hopefully last, time on whether to merge the city’s administrative areas into four large, semiautonomous wards.

The vast majority of news coverage of the issue in the Kansai region has been focused on arguments for or against a merger from the point of view of Osaka politics.

Local politicians, academics, financial experts and lawyers, along with news commentators and even comedians from the Yoshimoto Kogyo talent stable — who play, or overplay, the role of the befuddled “ordinary voter” — can be seen trying to make sense of detailed financial graphs and wordy PowerPoint presentations used by invited guests to prove their arguments or disprove their opponents’ claims.

Missing in the debate, which, to non-Osakans, feels quite insular if not much ado about nothing, are two fundamental questions.

First, what would a merger mean for the rest of the Kansai region? Second, what would a merger likely mean for the rest of the country, including the international community in Japan?

On the first point, a merger would create a mixture of hope and anxiety in the surrounding prefectures.

The new administrative wards of Osaka would enjoy more autonomy than their predecessors under the current system. If that leads the relatively wealthy ward that hosts the Umeda rail hub, where JR West, Hankyu and Keihan trains connect Osaka to the rest of the region, to decide on bold financial incentives to lure businesses from elsewhere, firms based in Hyogo, Kyoto, and Nara prefectures might start to wonder if it would be more advantageous to relocate.

Like everywhere else, Kansai’s prefectures face a graying, declining population. A more efficient, wealthy, modern and business-friendly northern Osaka in particular could prove to be a tough local competitor for corporate tax revenue and jobs, especially for neighboring Kobe and even Kyoto Prefecture.

The former’s younger generations have been fleeing the city for years in search of work opportunities elsewhere.

Meanwhile, due to the coronavirus, Kyoto is discovering that the overseas tourist gold rush has ended and many service industry businesses are in trouble.

No doubt things will eventually improve. But following the merger, Osaka’s wards could also adopt more proactive micro-tourism policies that convince more tourists to spend more time, and money, in Osaka and less time in Kyoto.

The second question is one most residents outside Osaka are focused on. What does the merger mean in terms of advantages to myself or my company if I relocate? Osaka officials tend to answer this by saying, essentially, that they’ll let you know after the merger is approved.

It would be nice to think all of the rhetoric from Osaka officials about the need to compete with Tokyo and other East Asian regional hubs means the merger would be a big step toward making Osaka the next Singapore or Seoul.

But that may be wishful thinking, as the Finance Ministry will no doubt have a say, directly or not, in how the new wards can financially operate. As will local voters.

One of the city of Osaka’s distinguishing traits has always been that many of the top corporate leaders who constantly bellow for lower corporate taxes do not actually reside there, preferring to live elsewhere in Osaka Prefecture or even neighboring Hyogo, Nara, or Kyoto prefectures. Their tax spending priorities are very different than those of residents. That could mean political tensions in the new ward assemblies that may, or may not, be resolved to the satisfaction of nonresident supporters of financial incentives.

Thus, at this point, despite some fundamental questions, much about what happens if the merger is successful remains uncertain.

For the moment, the referendum is the major political event of the year in the region and one that, regardless of the result, will greatly impact its economic future as well.

View from Osaka is a monthly column that examines the latest news from a Kansai perspective.

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