The World Rallies to Help Japan
With a population of 126,475,664 (July 2011 est.), Japan is major economic power, has the world’s third-largest economy by nominal GDP and by purchasing power parity. It is also the world’s fourth largest exporter and fifth largest importer.
There is no doubt the economic effects of Japan’s devastating earthquake and resulting tsunamis will be significant and felt around the world for some time to come. The LA Times reports:
Obama said the Defense Department was marshaling U.S. forces in the Pacific to deliver relief and help with evacuations. One U.S. aircraft carrier was already off the coast of Japan and another was en route to the disaster scene, the president said.
At least 45 countries have assembled relief teams, including 68 search-and-rescue operations, and were awaiting Japan’s direction on where to deploy, said Elisabeth Byrs of the United Nations Office for the Coordination of Humanitarian Affairs.
U.N. Secretary-General Ban Ki-moon told reporters that the world body was ready to help Japan in any way necessary, including humanitarian assistance, and was closely monitoring aftershocks throughout the day.
“The biggest problems tend to be infrastructure, roads and rail,” said Janet Hunter, who teaches Japanese economics at the London School of Economics. “Almost everything is going to have to be replaced” that fell in the path of the tsunami.
Any disruptions in Japan’s manufacturing sector will inevitably ripple through an economy that had stagnated over the last two decades, but that had been expected to pick up. Japan’s gross domestic product fell 0.3 percent in the fourth quarter and at an annualized rate, Japan’s economy shrank 1.1 percent in the fourth quarter from the previous quarter.
Cargo shippers reported that major Japanese ports were closed, though the shutdowns may be precautionary. The country’s major container seaports, most of them south of Tokyo, play a crucial role in Japan’s export-driven economy. Japanese exports — chiefly automobiles, machinery and manufactured goods — rose by almost 25 percent in 2010, the first increase in three years, and a lengthy shutdown could create costly delays up and down the global supply chain. Several airports, including Tokyo’s Narita, had been closed.
Economists at Capital Economics, a research firm in London, said in a report that it “may be several days before the costs of the disaster are clearer.”
“The greater the social and economic damage,” the report said, “the more difficult it will be for the government to ward off a fiscal crisis.”