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A Human & Economic Tragedy Unfolds in Japan

The scale and scope of the disaster unfolding in Japan following last week's earthquake and subsequent tsunami is heart wrenching. Estimates indicate more than 10,000 lives might have been lost, with millions of people displaced, in what is turning out to be one of the country's biggest natural disasters ever.

Even now, the country awaits with trepidation investigations into unfolding events at several nuclear reactor facilities; two experienced a meltdown over the last few days, although the cores of the reactors are still intact, according to reports.

Our hearts at EBN go out to the people affected, their families, and the nation. This week, the country will continue to grapple with the fallout (sometimes literal?) from this natural disaster. It is expected that efforts to locate and rescue survivors will continue while national leaders also focus on finding urgent accommodation, medical treatment, food, and water for those affected. In many of the coastal cities hit, communication is spotty at best and land transportation has been completely disrupted. The humanitarian crisis has forced Japan to seek international assistance.

The crisis has been exacerbated by severe disruption to power supplies. Huge sections of the country are without power, and it is expected that “rolling blackouts” will continue for some time. On the economic front, Japan also faces mounting problems as a result of this disaster. The economy has been struggling for decades. Only recently, discussions centered on how Japan's national debt had ballooned, and fiscal actions were being initiated to curb this and spark growth.

The debt reduction efforts will have to wait while the country assesses the current situation. In fact, it may have to take on additional debts to deal with the staggering clean-up efforts and rebuilding that must be carried out to restore devastated communities. In response, the Bank of Japan has been taking steps it believes will help restore confidence to the economy.

Today, the bank issued a statement aimed at calming the market, noting it was “conducting its business operations as usual at its Head Office and all of its branches.” Despite the statement, it's clear nothing is “as usual” for now in how regulators are moving to restore confidence to the economy. The Bank of Japan's statement included the following:

    This morning, the Bank conducted a same-day funds-supplying operation totaling 7 trillion yen, which was the largest amount ever conducted, and a future-day-start funds-supplying operation totaling 3 trillion yen. The Bank will do its utmost to continue ensuring stability in the financial markets and securing smooth settlement of funds, including providing liquidity.

It wasn't enough. On Monday, Japan's main indices slumped, with the Nikkei Stock Average sinking more than 6 percent while many companies operating in the nuclear sector, including {complink 2393|Hitachi Ltd.}, Mitsubishi Heavy Industries, and Japan Steel Works Ltd. fell at a double-digit clip.

The automotive and electronics sectors were not spared. Marketwatch.com reported shares in Toyota Motor Corp. fell 8 percent, Mitsubishi Motor Corp. 12 percent, and {complink 5114|Sony Corp.} 9 percent. It's unlikely anyone can at this moment foretell how the earthquake will affect the country's high-tech sector, which in 2010 accounted for almost 14 percent of the “global electronic equipment factory revenue,” according to research firm IHS iSuppli.

Japanese chip vendors were also responsible for “one-fifth of global semiconductor production in 2010,” iSuppli said. With the transportation infrastructure in shambles and foreign governments warning citizens to avoid Japan, business transactions in the country are certain to come under tremendous pressure in the next weeks. iSuppli's further assessment of the potential impact of the earthquake on the electronics supply chain follows:

    The major impact on Japan’s semiconductor production is not likely to be direct damage to production facilities, but disruption to the supply chain. Suppliers are likely to encounter difficulties in getting raw materials supplied and distributed and shipping products out. This is likely to cause some disruption in semiconductor supplies from Japan during the next two weeks.

For now, the country is more focused on the harrowing task of locating, identifying, and burying the dead while giving much needed support to survivors. A few electronic companies have chimed in: {complink 4185|Panasonic Corp.} last week said it would donate 300 million yen to the relief efforts in addition to supplies like radios, lamps, and batteries. Other high-tech companies will no doubt follow soon.

21 comments on “A Human & Economic Tragedy Unfolds in Japan

  1. tioluwa
    March 14, 2011

     The tragedy in Japan is really heart breaking, the sites and scenes i saw today really tough through my heart. I hope the banks can stay on top of the matter as they plan to.

    Yes, minimizing debt is not an issue now, but if enough foreign support is granted, they just might get through with little increase in debt.

    I know no one will be willing to take the risk to trade with Japan in some sensitive ares now, but i think the best way to help the nation is not just aid, but trade opportunities where risk is minimal, to help the economy stay afloat until the crisis is over.

     

    My heart goes out to Japan and to its people.

     

  2. eemom
    March 14, 2011

    My family and I spent a good part of the weekend watching clips and footage of the devastated areas in Japan.  The cars and homes being washed away like toys was unbelievable to watch.  This is the type of tragedy where the world unites to provide whatever aid is possible.

    I read today that 1000 bodies washed up, I fear that the death toll will continue to rise before we know the full impact of the disaster.   This will undoubtedly have a negative effect on the market as well as worldwide economy for some time to come.

  3. Tim Votapka
    March 14, 2011

    Bolaji,

    You struck a good balance between the business and human side of the disaster in Japan.

  4. Ariella
    March 14, 2011

    I think that it will have an effect not only due to Japan's role in the supply chain but due to growing concern over the use of nuclear power in the wake of the disaster's impact on the reactors in Japan.  I believe I saw a mention that Germany was taking that into account in its plans for energy.

  5. elctrnx_lyf
    March 14, 2011

    It is not just the Tsunami which is taking lives, the nuclear radiation actually have more effects on the people live because of the power plant failure. how fast it can be stopeed is a big question and i wish all the international communities come together to help Japan.

  6. Wale Bakare
    March 14, 2011

    Devastation caused by Earthquake and Tsunami will cost Japan and world economy greatly. How expensive the damage caused by these horrific natural disasters cannot be quantified.

    What about the thousands of lives lost within minutes?

    My heartfelt goes to the families who lost their beloved ones and Japan as a whole.

  7. bolaji ojo
    March 14, 2011

    This is still very fluid and the news coming out of Japan indicates the country is dealing with a set of very bad options. Still, I have been amazed by the resilience of the people. They have shown courage and demonstrated the best of humanity. At this moment, we are all Japanese and should reach out to them in whatever ways we can. Let's also hope and pray that efforts to control the three troubled nuclear facilities work. Japan will rebuild and recover with help from the international community.

  8. SunitaT
    March 14, 2011

    @Bolaji,

     I agree with you, I too am amazed, and I salute the resilience of the people. Everyone knows Japanese people are the most hardworking people on planet. Catastrophy of this magnintue (earthquake, tsunami, nuclear, possibility of volcano erruption) can easily shake confidence of the poeple. All countries should come together and help Japan rebuild the nation and rebuild the confidence of the people.

  9. Kunmi
    March 15, 2011

    Japan's situation shocked the global communities. As discussed on CNN on Monday, Japan's situation is an eye opener for us in the USA. Japanise were credited for the 5 minutes readiness for this kind of disaster but where do we stand as nation? In spite of the challenges of the loss of many people, properties and other infrastructres, the citizens still remain calm and collected.If there is any country that needs a global attention for help, Japan is one.  People need shelter, food and water. Great work is being done by the 2000 home based red cross members in Japan, Humanitarians and reporters from many countries are on the ground working so hard to share their concerns with the nation. It was also reported that giant techs like google, Apple, Twitter and many more are using the power of technology to help those in need. To read more about the power of technology, you may check this article:http://www.pcmag.com/article2/0,2817,2381879,00.asp

  10. Kunmi
    March 15, 2011

    It is really a big concern. The side effect of the radiation may not be known until people start showing the signs and symptoms of radiation effect; unfortunately, this may be years down the line. It is high time this country is helped by the nations with high level of intellectual ability, who can assist in preventing this deadly effect on pepole. Wake up the power of technology!

  11. Kunmi
    March 15, 2011

    This is a wake up call for the USA also in its plan for energy.

  12. Kunmi
    March 15, 2011

    I agree with you. I got glued to the chair when I saw how water torrent was sweeping houses, cars and many other things that stand on its way. Then I began to think about the effect of this on the economy and the Japan products in the world market. Many of us have affinity for Japanese products like electronics and cars. The unexpected downtime like this is an additional burden for a country that is struggling to find her feet in the shaky economy. In other to get this country on track, all countries should come to their aides by forgiving their loans and help restore their strength. There is no way Japan supply chain will not be negatively impacted but the effect can be minimized if the countries of the world arise for their salvation.

  13. DataCrunch
    March 15, 2011

    Bolaji, you hit the nail on the head that the Japanese people have “demonstrated the best of humanity”.  Watching the news coverage and listening to the news reporters talk about how calm, organized, and civil the Japanese people are in light of this terrible ongoing tragedy is really quite amazing and encouraging. 

  14. Adeniji Kayode
    March 15, 2011

    Japan is a “world country”,Her products are every where all over the world especially the elcetronics and the cars. Japan needs the rest of the world in a time like this.I agree the natural disaster will have adverse effects on the ecomony of Japan and also the rest of the world.I also agree with Kunmi, the rest of the world should come to the rescue so that Japan can recover in time.

  15. Ariella
    March 15, 2011

    Dave, I was going to say the same.  You don't hear of looting or chaos.  The people really deserve a great deal of credit for their responsible behavior.

  16. Adeniji Kayode
    March 15, 2011

    The way the people  pull themselves together is really remarkable and this is a good example for the rest of the world to emulate.With this,i hope for a speedy recovery.

  17. eemom
    March 15, 2011

    The situation in Japan continues to get worse with another explosion in one of nuclear plants.  Now citizens are being warned to stay indoors and some are fleeing their homes altogether.

    The market is responding as expected, opening today with a 2% decline.  This disaster will continue to affect Japan (and the world) until the nuclear reactors are under control and Japan is in a place to start re-building.

    Our prayers are with them all.

     

  18. Wale Bakare
    March 15, 2011

    @eemom i quite agree with you. World markets took a surprise free-fall as the repercussions from the Earthquake and Tsunami. In fact, we cannot really estimate time lenght it will have on the world economy at the moment. 

    Japan of course top world best economy – 3rd largest economy is sick presently and in semiconductor industry and supply chain community will surely felt the negative impact in world markets. Especially as battle of control in the markets of smartphone and tablet devices continue.

    Toshiba the leading giant perhaps largest flash memory chips making, it has just shared its potion from the fallout of the crisis where its price of stock fell 16 percent.

     

     

  19. Barbara Jorgensen
    March 15, 2011

    As the hours pass, the saga of the nuclear reactors gets worse.  The people and government of Japan truly deserve recognition for the way they are handling this terrible situation.

  20. Violet
    March 15, 2011

    Not only is the saga with the reactors terrifying for Japan (and the rest of the world), but it looks like now they may be awaiting an even bigger and much more deadly earthquake, according to The Associate Press today! The pictures coming out of Miyagi and the coastal areas hit are so catastrophic. How does a country rebuild after a natural disaster of that magnitude? My heart aches for the people and especially the children, of Japan.

  21. Nemos
    March 15, 2011

    So true, this is a wake up call for all , Germany today show us the way. This is the second accident in nuclear plant that I see, I am 31 years old and I see again the same pictures and I experience the same feelings, how many people must die to understand that we cannot control huge powers such as nuclear power. 


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