It has been a busy news week.
Western fighter jets have bombed Libya, the blood of protesters has spilled into the streets of Syria and a bombing in Jerusalem has served as a reminder of just how little progress, if any, has been made in the Middle East peace process. But neither those matters, nor the death of a Hollywood Hall-of-Famer has been able to replace Japan’s multiple disasters as the most sought-after story of our website.
Last week, on the same subject, I chose the side of optimism: the resilience of the Japanese people and their ability to take the mightiest of Nature’s seismic punches on the chin and then pick themselves up off the canvas and fight on. But that doesn’t just happen by itself overnight. The road to Japan’s latest recovery from disaster will be long, painful and hard. This week, while that optimism still remains, I’ve been looking at how a country gets back on its feet.
There is a human cost and there is an economic cost to what has happened to Japan since March 11. While the two aspects do to some extent have an impact on each other, they should still be treated separately. The second part of this week’s POTC will look at the survivors’ struggle to pick up the emotional pieces of their lives, at attempts to help them come to terms with seeing their friends, families, homes and belongings swept away. Their loss is unquantifiable.
This first part will deal primarily with the cold, hard facts. With what can be counted.
Japan’s readiness for earthquakes meant that the damage caused by the initial magnitude 9 quake was limited. In Tokyo prefecture, the earthquake – the fifth strongest on record – caused major damage to 18 buildings and minor damage to a further 74, according to this article in The Australian, which praises Japanese standards in earthquake-proofing buildings. Skyscrapers in Tokyo swayed and danced dramatically with the violent movements of the earth, just as they were designed to do. Structural engineers have since been examining buildings to identify those which will need repairs and which will need to be demolished. But the fact is, the buildings did their job and stayed upright for the duration of the quake.
It was the tsunami that wreaked the vast majority of the damage: nearly 19,000 structures were completely destroyed by the giant wall of water. More than 100,000 buildings were partially damaged.
The job now in those areas is to start, literally, picking up the pieces: sifting through the unimaginable tonnage of debris, deciding what is recyclable, what can be used to rebuild.
Eduardo Kausel, professor of civil engineering at the Massachusetts Institute of Technology, argues here that most of the tsunami-hit buildings should be rebuilt quickly, saying that “Traditional, low-lying Japanese houses and buildings are mostly of low cost and quick to build, as befits a country that has lived with the threat of earthquakes for centuries.”
Kausel says though that what is uncertain is where the reconstruction will take place. It would make sense, for example, to build on higher ground or further inland in order to avoid having to go through the same process years down the line. But sense does not always win through and in the past, like after the 2004 Asian tsunami, destroyed beach-front houses have been rebuilt back on the beach-front.
Japan’s point of reference will be the Kobe earthquake, which struck on January 17, 1995, killing around 6,500 people and destroying a similar number of buildings to the recent quake. Evacuation centres housing around a quarter of a million people were ready to close again by August of that year. Clearing debris took much longer and wasn’t complete until March 1998, more than three years after the disaster.
The World Bank estimates it will take five years for Japan to rebuild what was destroyed on March 11. Japanese authorities have also put a price tag on that, estimating that it will cost up to 25 trillion Yen (218 billion euros). The damage in Kobe came to about a third of that price.
That would be a blow for even the healthiest of economies let alone an ailing, ageing one like Japan’s. Its government debt, at 226 percent of GDP, is by far the highest of all industrialised countries and most other nations.
The earthquake and tsunami wiped out between three and five percent of Japan’s material assets, twice as much as Kobe, and the consequent nuclear threat at Fukushima helped wipe 20 percent off the Nikkei in the days following the event.
Yet the Japanese economy can still take the hit according to the IMF, which believes – or at least says it believes – that the economic costs are manageable.
Yes, in the short term, Japan’s output will suffer. But the massive injection into the economy of reconstruction money will see that output skyrocket after the middle of this year. On a graph, Japan’s GDP will look like a ‘V’ rather than an ‘L’. That was the case anyway after Kobe, when GDP fell initially by 2.6 percent only to rise out of the ashes with quarterly gains of 3.2 and 3.9 percent compared to the previous year.
Japan has been saving for a rainy day, as the Financial Times puts it. It has been stashing foreign exchange reserves for years and now has around 81 trillion Yen-worth (700 billion euros) that it could call upon, says the FT.
On an international level in any case, there are no sirens blaring about the economy. Nationally, Japan will lick its wounds. It is locally, in the zone ravaged by the tsunami, where the pain will be felt in the short, medium and long term.
There is little doubt that in perhaps ten years, the physical scars of March 11, 2011 will have been covered up. The psychological recovery however will take much longer.
Japan’s road to recovery (pt 2) will be on line on Monday.
By Mark Davis