Japan: On March 11 and the year after

nobu-yamashita-thumb Dr Nobuaki Yamashita
Email: n.yamashita@latrobe.edu.au

First published on Australian Network News on 9 March, 2012.

The '3/11 tragedy' brought out the best in the Japanese nation. Even as the world watched with horror the terrible tragedy that was unfolding, none could fail to be impressed with the courage, discipline, sense of responsibility and community spirit with which ordinary Japanese coped with the devastation inflicted on the country.

Instead of panic and chaos, a surge of spirit and determination swept through the country, driving people to rise to the challenge and rebuild the shattered communities, the destroyed roads, bridges and ports, schools and hospitals.

For many Japanese, as well as foreign observers, it seemed that the great disaster would prove to be the trigger for a rejuvenation of Japan, freeing itself from the two decades of economic stagnation and political torpor. Japan, it was hoped and expected, would rise from the rubble and debris with renewed dynamism and strengthened bonds of national unity and social cohesion.

Considering the scale and nature of the tragedy, Japan's emergency services and community organisations acted promptly to ensure that the half million displaced people were given medical care, sheltered, fed and clothed. The thousands of recovered dead bodies were given dignified burials or cremations.

Workers in the nuclear plant grappled with the imminent danger of a nuclear meltdown with heroism, self sacrifice and dedication to avoid a huge catastrophe.

Despite well publicised problems faced by the government in getting legislation through parliament to release reconstruction funds, in fact Japan also achieved a great deal in a very short period of time in terms of restoration of damaged or destroyed services and rebuilding of physical infrastructure.

The major rail and road networks and most phone systems were surprisingly rapidly re-connected.

Within a few months water, gas and electricity services had been fully restored everywhere (outside the areas restricted due to high radiation danger), as were airports and ports.

Outside the restricted area, many affected factories and manufacturing enterprises were also back in operation within a few months, and many houses and buildings have been repaired or rebuilt.

Economy shaken

The economic shock was not trivial. Even without taking into account the broader impact on energy supplies due to the Fukushima nuclear plant, the earthquake and tsunami inflicted losses conservatively estimated at around 3.5 percent of GDP, and initial forecasts suggested a slowdown from 1.4 per cent to 0.4 per cent in 2011.

Immediate disruptions to various industries, particularly the automotive industry - both in Japan and globally - were quite severe: one damaged factory, for example, produced around 50% of a critical microchip for automobiles producing a cascading impact through the entire global automotive industry.

The economy has shown greater resilience than expected, registering 0.9 per cent growth.

But not all has been good news.

Political challenge

Some 350,000 evacuees are still not resettled and there is much dissatisfaction about the slower than expected pace of reconstruction.

The government, then led by Prime Minister Naoto Kan, appeared weak and indecisive, unable to present a reconstruction strategy that could harness the huge surge of community support evident in the immediate aftermath of the disaster.

The major opposition parties undermined efforts to raise finances through some form of a reconstruction tax, demanding instead cuts to social welfare expenditure programs.

Divisions within the government's own ranks ensured that no consensus emerged.

The result was political and policy paralysis, delaying for many months the passage of legislation to provide funds for the urgent reconstruction effort.

Financing options were also constrained because of tensions between the government and the central Bank - Bank of Japan (BOJ).

Prompt action by the BOJ had helped maintain the stability of the financial system in the immediate aftermath of the disaster.

Government bond sales to the central bank - an alternative or a supplementary instrument together with a tax - could have helped raise needed finances, and may have also helped to ease the upward pressures on the Yen.

But the BOJ, driven by, some might say, obsessive concern with possible inflation and fears investors may lose confidence in Japanese bonds, maintained its refusal to directly purchase government bonds.

The result was that a golden opportunity to utilise a massive spending programme to jump-start the stagnant Japanese economy was lost.

Shadow of Fukushima

But, above all, the drawn out - and continuing - crisis at the Fukushima power plant continues to cast a pall over the Japanese social and political landscape that has prevented return of 'normalcy'.

Huge piles of debris litter the tsunami-hit areas as attempts to disperse them to other regions have run into resistance from communities fearful of radiation damage.

Many people have no realistic possibility of going back to their destroyed homes and towns, and agricultural produce from a wide area is now under suspicion of radiation contamination and faces a bleak future.

The repercussions of its near meltdown continue to reverberate throughout Japan at every level.

As the truth about the status of the various reactors started to come out, the full implications of the nuclear accident became clearer.

Profound change

There is a visible and widespread disillusionment with not only the government and the nuclear industry but more generally with the traditional political establishment, including the various opposition parties, the bureaucracy and the corporate establishment.

This is probably the most profound way in which the disaster has changed Japan.

The Japanese people had long accepted the repeated assurances by the government and the power companies that 'all was well and under control' with nuclear power plants.

The close and warm alliance between government, high bureaucrats (including the industry regulators) and the powerful nuclear industry had covered up the real dangers, underestimated the risks and under invested in essential safety measures.

As realisation dawned on the Japanese public that they have been lied to and deliberately misled, they have reacted with a deep sense of betrayal and - by Japanese standards - with fury.

Nuclear future?

It is obvious that any move to minimise nuclear risks and reduce Japan's reliance on nuclear energy will necessarily require a medium term strategy, given the size of Japan's economy and its current heavy dependence on nuclear power.

But the Fukushima accident brought home the folly of relying on nuclear energy in one of the world's most geologically unstable, disaster prone country. Public pressure forced the closure of many other nuclear power plants.

As the public backlash against nuclear industry shows no signs of abating, many nuclear plants, which contributed 30 per cent of Japan's energy needs, remain idle.

The prime minister himself became an open supporter of a switch away from nuclear power, having previously endorsed a national energy policy that envisaged the majority of Japanese energy needs being supplied by nuclear power in two decades.

As a recent independent investigation has revealed, Mr Kan's own experiences during the crisis had revealed to him the enormous dangers of placing too much credibility on assurances of safety from the nuclear industry and bureaucrats close to them.

But he paid a heavy political price for his policy switch; having lost the support of the power brokers in the traditional Japanese political establishment, Mr Kan was deposed and replaced by Yoshihiko Noda, who now argues for restarting the idle plants and in favour of a more 'nuanced' national energy strategy.

Broken trust

The continuing stalemate over the reopening of nuclear plants is only one symptom of the much deeper breakdown in trust between the community and the political and corporate establishment.

In a recent opinion poll none of the major parties was able to gain 20 per cent support; around 50 per cent expressed no confidence in any of the parties.

With a stagnant economy, rising levels of inequality, high youth unemployment and a deepening sense of pessimism about the future, the vision of a rejuvenated Japan that would turn the March 11 tragedy into a spring board for national revival appears to have been a mirage.

But Japan remains a country with huge strengths; affluent, educated, with vast reservoirs of social capital.

The change in public mood and the revival of political activism and engagement may be the harbinger of a more profound transformation of Japanese society and its economy.

Sisira Jayasuriya and Nobu Yamashita are both lecturers with the School of Economics and Finance at La Trobe University in Melbourne.