Friday 25 March 2011

Japan disaster: Economic damage to be limited?


In search of a bright side to Japan's ongoing darkness.
With devastation across large section of Japan, radiation possibly leaking from a cracked reactor core, more than 10,000 officially dead, andharrowing tales of sadness and grief, it's hard to see how the country's ongoing disasters will not also seriously damage the Japanese economy.
But that's the argument the New Yorker's James Surowieki — one of this business writer's favorite business writers — is making today in this very smart analysis.
The economic example Surowieki first points to is, well, Japan. The 1995 Kobe earthquake led to dire warnings that the country's economy would need years, or even decades, to recover.
Instead, as Surowieki points out: "Twelve months after the disaster trade at the port had already returned almost to normal, and within fifteen months manufacturing was at ninety-eight percent of where it would have been had the quake never happened. On the national level, Japan’s industrial production rose in the months after the quake, and its GDP growth in the following two years was above expectations."
Similar results happened after California's 1994 Northridge quake, in South Carolina after Hurricane Hugo in 1989, and in Sichuan, China in 2008 following an earthquake that killed some 68,000 people.
Why? Economies are, by their very nature, adaptive organisims.
Here's how Surowieki puts it (italics are mine):
"The biggest reason for this, as the economist George Horwich argued, is that even though natural disasters destroy physical capital they don’t diminish the true engines of economic growth: human ingenuity and productivity. With enough resources, a damaged region can reconstruct itself with surprising speed."
In fact, economists Mark Skidmore and Hideki Toya studied 89 countries that have been hit by climatic disasters. They found that economic growth and productivity in these places turned out to be higher as investments in new technologies and infrastructure replaced older, less efficent, systems. And the countries that recovered quickly were, like Japan, fully developed economies with efficient markets and easy access to captial. (Though the economists point out that geological disasters don’t seem to have the same effects on growth as climatic one).
So perhaps there is a ray of light in Japan's continuing darkness, at least on the economic front.
Let's hope so.

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Saturday 12 March 2011

Once again tragedy calls out to humanity

Ashley Mwanza


SEPARATED by thousands of miles but as close as the click of a mouse or a television screen, images of the devastation in Japan struck home world over on Friday 11 March 2011. Many of us depending on which side of the world you are woke up to the terrible news about the earthquake and subsequent tsunami out of Japan. We watched in stunned silence as the nation and its people were shook by a devastating earthquake. And then, we watched as they were inundated by the tsunami that followed. Fresh in our hearts is New Zealand and in the not so distant past Haiti, Pakistan and in more recent times countries such as China, Brazil, Australia, and now Japan.


In a land of people used to earthquakes, everyone is saying this one, which hit at 14:46 local time, is the strongest they've ever felt-and that's in Tokyo, some 400 kilometres southwest from the epicentre. Scientists are calling it the biggest earthquake in Japan's tremor-filled history. Preliminary estimates from the United States Geological Survey (USGS) put the magnitude at 7.9, which have since grown to 8.9. Estimates of the depth range from 10-20 kilometres. This earthquake was 178 times as powerful as the 1995 Hanshin/Kobe earthquake.


The tsunami alerts revived memories of the giant waves that struck Asia in 2004. Warnings were issued for countries to the west of Japan and across the Pacific as far away as Colombia and Peru, but the tsunami dissipated as it sped across the ocean and worst fears in the Americas were not realised. The earthquake was the fifth most powerful to hit the world in the past century.


The disaster occurred as the world's third-largest economy had been showing signs of reviving from an economic contraction in the final quarter of last year. It raised the prospect of major disruptions for many key businesses and a massive repair bill running into tens of billions of dollars.


An aerial view shows houses burning and the Natori river flooded over the surrounding area in Natori city, Miyagi Prefecture on March 11. (Photo: Yomiuri Shimbun / AP Photo)

The visuals of burning buildings surrounded by muddy floodwaters were apocalyptic and frightening. As aftershocks continued, officials in Japan tried to assess the damage, both in loss of life and infrastructure. But how do you put a price on a catastrophe? In the days, weeks and months ahead, the people of Japan will need our help. They will need prayers. They will need food, water, supplies to life. They will need supplies and aid to rebuild their cities and their lives. They will need our support. The death toll continues to rise and thousands are homeless and desperate.


We must do what we can to reach out across the thousands of miles, across the ocean, to help them rebuild and overcome this devastating tragedy. Calls have already been made to support those seriously affected by this disaster. Even if you cannot provide financially, please pray that these people are comforted in their time of distress.

President Obama said it best, in his press conference yesterday: “I'm heartbroken by this tragedy. I think when you see what's happening in Japan you are reminded that for all our differences in culture or language or religion, that ultimately humanity is one. And when we face these kinds of natural disasters, whether it's in New Zealand or Haiti or Japan, then you think about your own family and you think how would you feel if you lost a loved one, or if your entire lifesavings were gone because of the devastation.”

The unfolding natural disaster prompted offers of search and rescue help from over 45 countries.

It is the call of humanity.

神が世界のすべての問題を抱えた場所や日本を祝福.
Kami ga sekai no subete no mondai o kakaeta basho ya Nippon o shukufuku.
God bless Japan and all the troubled places in the world.

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