Japan needs to look to the future

The earthquake and tsunami have caused huge human and material losses in Japan, and the threat of nuclear radiation has added to people's woes. Many people have been injured and many traumatized.

The Japanese are resilient people, having gone through many traumatic experiences in their history. There is need for them to rebound again, but today's Japan is different from what it was in 1995, when a devastating quake struck Kobe. Japanese today are not as positive about their future as they were during some of the past catastrophes.

Owing to the level of the damage to Japanese factories and infrastructure, it will be weeks or even months before the country's supply chain returns to normal and its manufacturing level gets back to its previous level. While most factories will be running as usual in the next few months, it is likely that some of the older and less efficient ones will be shut down. It will thus be cheaper and easier to use manufacturing bases in China and other low-cost countries than to rebuild the factories in Japan.