The 9.8 magnitude earthquake off the shore of Sendai in northeast Japan and the subsequent tsunami (with waves as high as 10 meters) brought indescribable anguish and casualty to the people of the Land of Rising Sun. The Japanese suffered a major blow in terms of human life (2414 confirmed deaths as of the latest count, with thousands injured or missing, and around 450000 people homeless and in evacuation sites). This disaster also inflicted damage to the world’s third largest economy. But by how much has the damage been done in Japan’s purse, and what would they do then?
Estimates of the costs of damage run up to around $ 171 billion, making the earthquake potentially the world’s costliest disaster ever. This scenario put extra strain on an economy that has been ailing for 20 years and has recently lost out to China. And we’re not yet considering the substantial humanitarian and production toll the earthquake took, and also the hysteria over nuclear meltdowns in reactors rendered derelict by the disaster. It has come to a point that the Japanese had to resort to rotational blackouts amid shortages in water, electricity, and other supplies.
The Nikkei Stock Maket took a major hit as it closed 6.18% lower on Monday, the first day the market reopened after the disaster. As a response, the Bank of Japan, the nation’s central bank, pumped 15 trillion yen (around $183 billion) into the economy to address the financial needs of the reconstruction and humanitarian effort. Foreign promises of assistance abound, but some analysts are positive that Japan can stand on its own and heal itself, therefore rendering aid as symbolic gestures. Even renowned economist Jeffrey Sachs is confident that Japan’s economy will bounce back right after restoration efforts have been done.
It certainly helped that Japan invested $1 billion on its early warning systems for earthquakes and tsunamis, therefore saving many lives in the process. And if history is any precedent, Japan has an extensive experience in bouncing back from the worst of scenarios, from being way behind before the Meiji Era to rising from the rubble of Nagasaki and Hiroshima of World War II.
Here’s to hoping for a fast recovery for the Land of the Rising Sun.