Japan facing long road to recovery
Posted Mar 17, 2011 02:45:34 PM.
This article is more than 5 years old.
As many continue to monitor Japan’s nuclear crisis, some attention is now turning to the massive reconstruction ahead in the country’s major cities.
In many ways, this disaster is worse than the 6.9-magnitude earthquake that struck Kobe in 1995. That quake killed more than 5500 people and collapsed the Hanshin Expressway. But since earthquakes are not uncommon in Japan, buildings there are engineered to withstand seismic events.
The X-factor in this latest event was the tsunami.
“The primary source of the damage in this case is that wall of water that literally washed away villages and towns,” says David Welch, Chair of Global Security at the Centre for International Governance Innovation, a think tank based in Waterloo. “That’s a more expensive clean-up job, it’s a more difficult clean-up job, there are a lot of roads, bridges, railways and so on that have to be completely rebuilt.”
The cost to rebuild after the Kobe earthquake was about $100-billion and Welch calls it a certainty that this effort will cost even more. And that’s where one of many challenges will have to be met.
“They will have to find the money,” Welch says plainly. “It’s a country that already has significant national debt and that debt will no doubt have to increase.”
Experts suggest that the global economic recovery will remain intact despite the disaster in Japan but note that Japan’s own pace of recovery will be slowed by as much as one percentage point.
Another factor that will challenge the rebuilding effort, according to Welch, is the Japanese practice of “just in time” supply chains. That means factories can’t keep operating on the spare parts they have in stock because “they don’t have them in stock — they expect them to be delivered tomorrow,” Welch explains.
Barry Bosworth, senior fellow at the Brookings Institution, said that the interruptions in Asian supply chains may knock a half a percentage point or so off the growth of some countries for a couple of months. Still, it will be temporary and have no major impact, barring any major nuclear catastrophe.
But nuclear is another area of concern in Welch’s eyes. Japan relies quite heavily on nuclear energy for its electricity and the failure of the Fukushima Dai-ichi plant will leave electricity in short supply. That, says Welch, may cause some Japanese to question the effectiveness of the nuclear supply, an energy source many Japanese are already predisposed to be wary of since Hiroshima and Nagasaki.
Abandoning nuclear power, however, would leave Japan scrambling to find an alternative energy source.
Despite the many challenges, the Japanese may perhaps be the best-suited to meet this crisis and persevere.
Consider, for example, the massive destruction from World War Two, a time at which almost every major Japanese city was bombed to rubble. Welch points out it took only 15 years for Japan to essentially rebuild all of its cities and all of its infrastructure. Within 20 years, he notes, Japan was the world’s second largest economy.
Welch expects a similar approach to this rebuilding effort.
“There is a very powerful work ethic and that’s among the reasons why Japan will bounce back from this catastrophe relatively quickly, probably more quickly than you could imagine any other country bouncing back,” Welch says. “People will put the shoulder to the wheel.”
Some economists believe the reconstruction of the areas damaged by the earthquake and tsunami will provide a much-needed jolt to Japan’s sluggish economy.
