Hard blow to Japan economy

The death toll in the devastating earthquake and tsunami that hit Japan on March 11 rose to 9,487 on Wednesday, and 15,617 people were still missing. The twin natural disaster damaged the Fukushima Daiichi nuclear power plant, too, triggering a radiation scare. The triple disaster, as the media are calling it, especially the radiation threat, has affected the Japanese economy because many foreigners - tourists and workers both - have been leaving Japan in a rush. Fears are now being raised that the economy could even suffer long-term damage.

The Great Hanshin earthquake (or the Kobe earthquake) on Jan 17, 1995, killed about 6,400 people and caused an economic damage of about 10 trillion yen ($100 billion), or 2.5 percent of Japan's GDP then. But the March 11 quake is estimated to have killed more people and caused more damage than the Kobe earthquakes. In fact, the Japanese government says it could cost $309 billion. This is particularly surprising because the GDP of Kobe and Osaka (Hyogo and Osaka prefectures) is more than two times the size of Japan's northeast region(Iwate, Miyagi and Fukushima prefectures)that was devastated by the March 11 quake and tsunami.

The March 11 quake and tsunami destroyed power plants in the coastal areas, too, though they were designed to withstand even massive quakes. The resultant disruption in power supply in the Tokyo metropolitan area has thrown industrial production out of gear. The chairman of the Federation of Economic Organizations has said that the semiconductor sector is expected to suffer heavily because semiconductors cannot be produced under rationed electricity supply. Moreover, a delay in the production of manufacturing parts and related products in the Tokyo metropolitan area will hamper production in other areas.