JIN-527 -- After the storm clouds, Japan's silver lining

J@pan Inc Newsletter
The 'JIN' J@pan Inc Newsletter
A regular opinion piece on social, economic and political trends in Japan.
Issue No. 527 Wednesday, March 23, 2011, Tokyo

After the storm clouds, Japan's silver lining: Japanese mull the nation's post-quake economic future

Right now the most important "Japan story" relates to the three-pronged catastrophe that was the Tohoku earthquake, the subsequent tsunami and the ongoing problems at the earthquake-damaged Fukushima nuclear power plant and the resulting effects on the surrounding regions, most significantly for business—Tokyo. While I stayed in the city for the first few days after the historic 9.0 earthquake, once radiation concerns were raised from the damaged nuclear plant at Fukushima, I decided to play it safe and take the situation as an opportunity to visit a couple of far away prefectures in the southern region of Japan where I have Japanese family and friends. First Hiroshima, and then Fukuoka.

In Hiroshima, the specter of the atomic bomb attack from WWII still looms large for many residents, thus I met several Japanese who hail from Hiroshima but work in Tokyo in the banking and technology sectors who also decided to err on the side of caution regarding the nuclear disaster. They were very matter-of-fact about the exodus, but when I asked about their thoughts on the disaster's potential to impact the already questionable health of the Japanese economy, the comments turned more pessimistic. Essentially, their consensus was that many businesses will either be forced to close, or dramatically reduce their staff, a move that would further negatively impact the Japanese economy.

Then there were the tales of CEOs, managers and general support staff leaving the country. While most of their anecdotes depicted foreigners leaving Japan, and possibly their jobs, they also mentioned that quite a few of those that had left the country were also Japanese, contrary to the reports that foreigners have been the only ones leaving Japan due to safety concerns. Overall, the message I got was that the next 6-9 months in Tokyo, and possibly all of Japan, will be rough going, with only the most resilient and resourceful SMEs surviving in the wake of a disaster that is now estimated to cost Japan upwards of $300 billion.

Interestingly, when I posed the same questions to Hiroshima local workers and shop owners, the disaster seemed mostly to be an abstraction that registered little impact on their day-to-day dealings. The forecast from the area seemed to be, accurate or not, that business would continue as usual in the quiet confines of Hiroshima.

Fukuoka was another story, but not what you might expect. Although many people had arrived in Fukuoka from Tokyo due to safety concerns related to the nuclear plant, and I even met one person from Fukushima, the area is humming along quite nicely. The locals watch the tragic reports of the deceased on television, and I even attended a quickly organized, but well produced charity event. But ask the average Fukuoka business person about the incident, many of whom have never even been to Tokyo, much less Fukushima, and they also seem to view the event as something very far away that won't have an impact on their local economy.

There are two ways to look at these anecdotes from Hiroshima and Fukuoka. On one hand, such disconnect from the disaster could serve to help the rest of Japan recover as non-impacted regions push the economy forward, unencumbered by the market worries that currently plague many Tokyo business people. On the other hand, the kick-start opportunity this disaster might have provided to Japan as a whole (á la post WWII hyper-competitive, recovery-minded Japan) to get the country more involved in internationalism and competition with its Asian neighbors might be lost on many regions of the country that continue to do business as usual without taking into account the new peril this event may present for Japan's national economy.

In either case, the good news here is that outside of Tokyo there are plenty of strong businesses doing well and building products and plans for the future. So although the lights in Tokyo may be currently dimmed, one need only look to the country's other prefectures to see the proverbial light at the end of the tunnel that represents the real hope for Japanese business and an inspiration to the beleaguered, stalwart businesses of Tokyo proper.

-Adario Strange

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