Monday 14 March 2011

Effect of the Economy

There is a lot of pessimism about the economy, but there may be a positive side to the disaster.

If the nuclear plant situation doesn't escalate, the sense of purpose and investment in re-building may have a positive effect in the slightly longer term. The contribution of the Tohoku area to GDP is only 1%. The major negative impact is from power cuts, but the Japanese are very good at matching consumption to supply.

Disaster Management

The events of the last four days have put an enormous strain on the government of Japan.

Politicians and TEPCO managers are struggling to find a balance between preventing panic and providing necessary information to the public at the same time as managing the multiple crises facing the country. They are hampered by a lack of credibility stemming from decades of misinformation and by a tendency to hide the truth rather than release the information necessary to allow the public to make informed decisions.

Looking beyond this unfortunate incompetence, however, we should remind ourselves that, in the face of a natural disaster of terrifying proportions, the social fabric is holding together and many brave, committed people are working to repair the damage in all areas.

Whether or not it was wise to build a nuclear power plant on a fault line in an area exposed to tsunami is a question for the generation of politicians and managers who took that particular gamble (continuing to operate it was, of course, a more recent decision), there is little the current team can do other than fight to bring the situation under control.

This morning's news that the Fukushima Daiichi plant No.2 reactor compression chamber is probably damaged following an explosion follows the news yesterday that the cooling water in the reactor had been allowed to run down, exposing the rods, due to human error. Poor management again compounding a serious situation.

The Japanese government has finally asked for outside help. Hopefully the combined efforts of experts from around the world can bring the situation under control.