Bishwa Nath Singh
The Japanese Government on March 23,2011 has come out with the estimated straight damage from a deadly earthquake and tsunami that had struck the northeast of Japan this month on March 11,2011 at as much as $310 billion that amounts to the world's costliest natural disaster.
(Picture of damages of buildings in Japan)
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Bishwa Nath Singh :
The first official damage estimates in Japan will serve to map out disaster relief plans and emergency budgets to fund recovery costs. Tokyo has reiterated that the estimate covered damage to roads, homes, factories and other infrastructure..., and eclipses the losses incurred by other natural disasters that had occurred in the past such as the 1995 Kobe quake and Hurricane Katrina in 2005. The said estimated figure can go even higher, as the estimate does not include losses in economic activity from planned power outages or the broader impact of a crisis at a stricken nuclear power plant in Fukushima that has been posing the biggest risks to the economy of Japan.The impact from the planned power outages is likely to be significant as revealed by Fumihira Nishizaki, Director of macroeconomic analysis at the Cabinet Office to the Press reporters.The upper end of the 16-25 trillion yen ($197-308 billion) estimate range would amount to about 6 percent of Japan's gross domestic product. This quake will cause the condition of Japan's economy and output to be severe, as conveyed by the Bank of Japan Governor Masaaki Shirakawa to a parliamentary committee of Japan. Speaking separately, central bank board member Ryuzo Miyao repeated the bank's pledge to take appropriate policy action if needed to support the world's third-largest economy.He has retreated that they have to be be mindful that the quake's negative impact on the economy, at least on the supply side, may be bigger than the Kobe quake 16 years ago, and be prolonged.In its initial response to the disaster, the central bank doubled the funds earmarked for purchases of a range of assets and started pumping record amounts of cash into the money market to prevent it from seizing up.It later followed up by joining forces with other G7 central banks in a rare coordinated move to keep a rallying yen from inflicting further damage to the economy. Japanese officials from the ruling coalition have said that at least two and perhaps more emergency budgets would be needed to pay for the reconstruction, with the first focused on immediate disaster relief, possible in April or May2011.The government will be in a position to decide as how it will finance those budgets, which some analysts say may exceed $ one hundred billion and most certainly will require new borrowing. While economists expect Japan's biggest reconstruction push since the post-World War Two period to give the hard-hit economy a badly needed lift in the second half of the year, they warn that power shortages are the greatest risk to such a scenario. The 9.0 magnitude quake that struck on March 11,2011 unleashed a deadly tsunami that wiped out whole communities, leaving nearly twenty three thousand people dead or missing and three and half lakh people homeless, and crippling the biggest power utility in Japan and Asia.Tokyo Electric Power Co, which serves Tokyo and the surrounding area that accounts for forty percent of Japan's economic output, lost about twenty percent of its operating thermal and nuclear power generation and is unlikely to get enough back online to meet peak summer demand. The utility is unable to get much surplus power from operators in the undamaged western part of Japan because they operate with a different power frequency. Toyota Motor Co, the world's top automaker, could be losing about $seventy four million of profit for every day its twelve assembly plants remain shut that is was estimated by Japanese officials . It is just one of dozens, if not hundreds, of Japanese manufacturers facing disruptions. Many analysts see a ripple effect from the disaster with disruption to production, both inside Japan and abroad, and the impact of fears of radiation and food contamination hurting business and consumer sentiment worldwide. Let us hope and pray for Japan to emerge out successfully very shinning with perfection from this grave natural calamity by exploring their wisdom and technological skill!