2011年3月26日土曜日

How Japan Can Make the Third Miracle from the Disaster

Osaka - Saturday, March 26, 2011




Japan has made miracles twice in its history. The first one is of 140 years ago, of Meiji Revolution in which after almost 300 years of isolation from the rest of the world of the Edo period Japan opened the door to the rest of the world and made drastic innovation to realize revolution. The second one is of 70 years ago, of reconstruction from the defeat of World War II in which atomic bomb was dropped to Hiroshima and Nagaski and it was believed that the country would not be able to revive. But with support from the U.S. and other countries, Japan, the only country ever to suffer an atomic attack, managed to recover and reconstruct, to realize substantial economic growth to become the second biggest economy.



What Dr. Neal calls “natech” (“Na”ture + “Tech”nology combined) disaster in the interviewed introduced in the previous article How the World and Japan Should Handle Japan Disaster is the worst disaster since the World War II defeat. Recovery has started and it is reported in media that the world is surprised at the speed to rebuilding of roads in Sendai; however, and recovery and reconstruction from the “natech” disaster is like making the two previous miracles, as mentioned in an article issued on March 25, of Nikkei, the Japan’s leading newspaper specialized in business and economy.



Following the previous article Japan Disaster to Hit Global and Japanese Economy in which she outlined the size of the affect of the disaster, the author would like to outline what needs to be done to make the third miracle, of recovery and “creation” of a new country, to conclude her (first) series of blog articles about the disaster.



1. First and foremost, rescue people who are still missing



As of 9:00 on March 24, as announced by the National Police Agency and reported by Nikkei, 9,811 people are dead, 17,541 are missing, and 2,779 are injured. It is two weeks from the earthquake and tsunami and the rate of survival is extremely low, but a woman of 80 years old and her grandchild survived for 9 days and were rescued. Some cities/villages are totally swept out by tsunami and wreckage remains in wide a scope of areas so rescuing the remaining people missing is taking time. However, rescue needs to be proceeded.



2. Immediate recovery of Fukushima Daiichi Nuclear Plant is critical



It goes without saying that immediate recovery of Fukushima nuclear plant is inevitable to avoid further negative effects on lives of residents in the area, on agriculture and fishery of the area and prefectures near by, on water supply to regions including Kanto (e.g. Tokyo, Chiba, Saitama), and on global environment. Engineers of Tepco have been doing everything they can for recovery in extremely tough situation as reported in online news on March 25 in website of Asahi, a major Japanese newspaper, based on the information from wives of the engineers; very little time to sleep and when they sleep they do so sitting on chairs, food is only biscuits with minerals, and so forth.



3. Smooth recovery of electricity supply in Kanto area is inevitable



Halt of Fukushima nuclear plant led to shortage of electricity supply in Kanto area and thus “planned” blackout has been ongoing, which is likely to continue for months. This has been causing many problems in the society, business and people’s everyday lives, as mentioned in the previous article The Reality of Japan Disaster – Affecting Nationwide. Without recovery of electricity supply, people’s lives would not return to what it was before the disaster, nor business activities which is the source of economy and capital necessary for reconstruction.



Organizations and individuals are making upmost efforts to save energy to avoid “planned” blackout but the experts estimated that blackouts cannot be avoided in summer and winter, when electricity usage reaches at the peak due to use of air conditioning. Some experts also point out that transferring electricity from Kansai (western Japan) and Hokkaido (northern island) to Kanto would be extremely limited because of technical reasons for Kansai and need to cross over sea for Hokkaido.



Noguchi proposes that such measures as immediately reviewing jacking up of basic rate of electricity and fetching down amperage under contract could avoid “planned” blackout until the end of April. However, he also says that even such measures would not be sufficient to avoid “planned” blackout in summer. Other experts and the government are pursuing other measures such as implementation of summer time.



After recovery of the plant, the government and energy supply related parties would need to reconsider total energy supply system. The key concept in reconsideration would be diversification of energy supply to minimize risk of energy supply shortage, and pursuing green and safe energy.



4. Of course, reconstruction of lifeline and social infrastructure is a big issue



Since everything is destroyed including local government office of many cities even if the cities were not 100% swept away by the tsunami, reconstruction of social infrastructure including roads, public and commercial facilities, housing, energy and water supply is necessary. It is just like creating new cities/prefectures from scratch.



This process would not necessarily mean reconstructing exactly what it used to be. Process needs to be that of determining what to recover/leverage and what to change/create to improve/eliminate the weaknesses the Tohoku and Japan had before the disaster. In fact, this could be a great opportunity to eliminate weakness and correct “contradictions” the country had and transform the total economic, industrial and social structures.



As in the case of Kobe earthquake in 1995, the region was condensed in terms of both population and business activity sites thus it was quite logical to reconstruct as what is used to be. However, Tohoku in this case is quite different, how the region geographically extends and how the structure of the industry extends.



Moreover, as pointed out by Nikkei in its article issued on March 25, the “natech” disaster shed light upon the contradictions and weaknesses of Japan system. They are the fact that the regions in which functions/systems of healthcare, government and lives are dispersed when the country was facing decreasing and aging population and the reality that the country operation and management have been centralized in Tokyo when the electricity supply of Tokyo relied from local regions.



5. Companies/organizations and people need to get back to work as soon as possible



Nikkei online article reported on March 25 that more than 1,000 listed companies in Japan are affected by the disaster, large or small. The most affected are in general of automotive and electronic manufactures because many of they have core plants in Tohoku area and they have been unable to operate. Such plants include those that produce and supply core components to worldwide market and already is pointed out by worldwide media that it would affect many global companies operating outside Japan.



Of course, smooth reconstruction already mentioned to reconstruct global supply chain network as Kishi mentions would be the requirement.



5. And, consumption is also a requirement to get everything going



Events and entertainments are currently restrained voluntarily but excessive voluntary restraints would be a negative factor for smooth recovery. General construction industry is likely to benefit from reconstruction as long as the government would give clear direction and support the industry; however, construction industry alone cannot drive economic maintenance and growth. Consumer spending is a requirement to drive economy and thus it is wise not to excessively restraint events, entertainments and so forth. This was pointed out and discussed in a few recent online articles in Japan’s leading business media.



6. The author’s final thoughts – The country and its citizens are strong enough to make the third miracle a reality



It is true that people suffered directly and indirectly from the disaster were first shocked and was at a loss what to do but are now determined to do what they can and actually started to take proactive actions to recover and reconstruct. The author believes that the country and its people are strong enough to make the third miracle a reality.  Japan cannot possibly remain to be a big burden of the international community because of the disaster.



In fact, the recovery and reconstruction from the “natech” disaster are expected to be converted to an opportunity of eliminating the weaknesses and contradictions the country had, transform the total structure of society, economy and industry. In other words, this is to be a catalyst the country needed to boost its economy for decades.



Last but not least, the author would like to introduce an idea she happened to listen to and was extremely was compassionate, which was introduced in Kansai local TV evening news on March 25 in which they introduced some ideas of some audience of what people in Kansai can do now to help the east, suffering directly from the disaster. The author believes that this is the mindset and behaviour that we all need to have, together with integrity, flexibility and teamwork/collaboration, and that the fact that a normal citizen has courage to share such mindset and behaviour indicates that the country and its citizen have the strengths of realizing the third miracle to create a new country, although it might be a long journey.



It is that every individuals need to unleash their own skills, competencies and strengths in this urgent situation. For example, entertainers focus on entertaining people and athletes playing games to perform well, to encourage and inspire people including those in the devastated area and make them feel better. Of course, business person are to focus on their business while doing what they can to help the people in need, and rescuers health care experts in the devastated area, each people playing an active role and fulfilling his/her mission.





References:-

Kishi, Hiroyuki (March 18, 2011) Discussion on economy management after rebuilt of Japan (in Japanese)

http://diamond.jp/articles/-/11538

Kishi, Hiroyuki (March 25, 2011) Anxiety of hollow out of eastern Japan attributing to the natural disaster and nuclear plant issue and future of Japanese economy (in Japanese)

http://diamond.jp/articles/-/11613

Koya, Tomoyuki (March 17, 2011) Three crisis that companies suffer from the disaster – resource crisis, demand crisis and mind crisis (in Japanese)

http://business.nikkeibp.co.jp/article/manage/20110316/219006/ 

Noguchi, Yukio (March 22, 2011) Reviewing basic rate of electricity for assumed electricity shortage this coming summer has much meaning (in Japanese)

http://diamond.jp/articles/-/11597





Resources:-

The natech (nature and technology) disaster is the most severe since the World War II and the economic loss from the disaster, direct and indirect combined, is enormous. However, Japan has made two miracles in its history, Meiji Revolution and recovery/reconstruction from World War II and the country and its citizen are strong enough to make the third miracle. The disaster is expected to be converted to an opportunity to transform total structure of society, economy and industry, to create a new country, thus a catalyst the country needed for decades to boost its economy.

2011年3月24日木曜日

Japan Disaster to Hit Global and Japanese Economy

Osaka - Wednesday, March 23, 2011




Stock market immediately reacted to the disaster that hit Japan on March 11. Japan’s Nikkei 225 index fell 6.4% extending a 6.2% loss on Monday, March 14 when the S&P 500 fell only 0.6%.



Following series of articles on the Japan Disaster, the latest one being How the World and Japan Should Handle Japan Disaster, the author would like to briefly explain the effect of the Japan disaster on economy, global and Japan, summarizing estimation and viewpoint reported by global and Japanese media.



The author feels it would give an idea of the size of the disaster in the long term affecting macro economy, and the urgency of the aid and recovery/reconstruction to minimize the negative effect on economy, global as well as Japan.



1. What is the possible effect on the Japanese economy?



Most media agree that the loss from the disaster is much larger than the Kobe earthquake in 1995, which was 1 billion yen. What makes the loss far larger than Kobe is the fact that the disaster completely destroyed lifeline and social infrastructure. For this reason, all media agree that the rebuild would require at least 5 years, which was what Kobe post-earthquake rebuilt required.



1) “Direct” loss



The estimations reported by most media of the “direct” loss from the disaster of the earthquake and the tsunami of the Tohoku region (north eastern Japan that the earthquake and tsunami hit hard on March 11) would fall in the range of 1.5 to 2.5 trillion yen. 2.5 trillion yen is equivalent to 4% of the economic output of the country in 2010, according to the World Bank.



Professor Sato of Hitotsubashi University estimated with 2 scenarios, one of 2.5 billion yen loss and another of 3.5 trillion yen loss. Loss of 2.5 trillion yen is only of Kanto area, and 3.5 trillion yen loss includes loss of other areas/prefectures severely been effected by the earthquake. Such prefectures include Shizuoka, Aichi, Mie, Wakayama and Kochi.



2)“Indirect” loss



This estimation mentioned above is called “direct” loss because it does not include “indirect” loss of the disaster. Possible indirect losses include the following. Such “indirect” losses are extremely difficult to estimate but would be huge, and it is quite likely that this would enlarge fiscal strain on Japan, when the ratio of debt to GDP already is 200%, compared to 90% in the U.S. according to Oliver.



(1) Loss from destruction of social infrastructure



This includes roads, electricity and water supply.



(2) Broken link of supply chain network among companies



This includes everything related to economic activities of companies such as purchasing/procurement, energy and water supply, distribution channel to supply products to the market.



This is to severely affect western Japan as well. Today on March 23 JR West announced that it will drastically reduce trains on service from April because they cannot obtain components necessary in maintenance. Such components are made in plants in Tohoku area (Fukushima) and the plants are unable to operate.



(3) Loss from the Fukushima nuclear plant issue



This includes many possible losses such as the following.



(i) People evacuating from (east) Japan meaning negative effect on tourism, and many events being cancelled meaning negative effect on consumer spending..



(ii) Contamination making agriculture and fishery products unsuitable to ship and consume. This would likely to have direct impact on domestic food supply as well as international trade. This means loss of agriculture and fishery businesses and some business owners may well be forced to go bankrupt. The bad reputation could further enlarge loss.



(4) Electricity shortage



This is not only in Kanto region. In fact, this is a serious issue already in Kanto (e.g. Tokyo, Kanagawa/Yokoyama, Chiba, Saitama) leading to “planned” blackout. This is an enormous negative factor for business in all industry



2. What is the possible effect on global economy?




There seem to be different perspectives on the effect on global economy. There are some people such as Oliver, although agree that the loss from the disaster is huge on Japan, say that global economy should not be hardly hit by the Japan disaster because the GDP of Japan in the world economy is limited.



However, others say that the Japan disaster could hit global economy hard. This is because there have been many core plants of automotives (e.g. of Japan big 3 automobile companies) and electronics including plants that have been manufacturing core components of mobile phones that such global companies as Nokia and Samsung has been relying on. It was soon reported in multiple western media that such global companies of consumer electronics are to be hit hard and although they will try to acquire components from other sources it would be extremely difficult for them to come up with good options.



The World Bank predicted in a separate report that East Asia would be affected. They say that in the immediate future the biggest impact will be in terms of trade and finance. The World Bank report also says that the other worrying factor for the region is that about one quarter of East Asia’s log-term debt is dominated in yen. For China it is about 8% but for Thailand it is about 60%. Thus the report points out that a 1% appreciation in the Japanese yen translated into about 250 million USD increase in annual debt servicing on the yen-dominated assts held by the nations.



3. The author’s final thoughts



The author feels there are other possible negative effects on global economy if Japan, with world class technology in many fields such as environment that the world requires today, struggles too much in reconstruction.



Japan has recovered from various disasters in its history, from many major earthquake (e.g. of Kanto in 1929, of Kobe in 1995) and from World War II and the author believes it can recover again, with the help from the international community as well as its citizens. This is probably another “test for toughness to survive”, as Fingleton says.



By overcoming what Koya says “resource crisis, demand crisis, and mind crisis” of the disaster, Japan needs to pass the test for toughness to survive, and transform the reconstruction to, what Rosembush words as “growth catalyst that Japan needed for decades”.





References:-

BBC News (March 21, 2011)

http://www.bbc.co.uk/news/business-12802193

CNNMoney.com staff (March 15, 2011) Tokyo stocks plummet as crisis deepens CNNMoney.com staff http://money.cnn.com/2011/03/14/markets/japan_world_markets_tuesday/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29&utm_content=Twitter

Fingleton, Eamonn (March 15, 2011) Broken Links - How much will the Japan quake hurt the global economy? http://www.tnr.com/article/85236/japan-earthquake-tsunami-industry-economy

Isidore, Chris (March 14, 2011) Will global economy be hit by Japan? http://money.cnn.com/2011/03/14/news/international/japan_earthquake_tsunami_economic_impact/index.htm

Koya, Tomoyuki (March 17, 2011) Three crisis that companies suffer from the disaster – resource crisis, demand crisis and mind crisis (in Japanese)

http://business.nikkeibp.co.jp/article/manage/20110316/219006/ 

Los Angeles Time (March 15, 2011) Japan quake likely to affect business globally http://www.latimes.com/business/la-fi-japan-business-20110315,0,2713425.story?track=rss

Nikkei (March 23, 2011) Loss from the Japan earthquake to total 15-25 billion yen, more than the loss from Kobe earthquake that was 10 billion, according to the estimation of the Japanese government (in Japanese) http://www.nikkei.com/news/headline/article/g=96958A9C93819481E0E0E2E1838DE0E0E2E1E0E2E3E39F9FEAE2E2E2

Oliver, Shane (March 15, 2011) Global Economy should not be badly hit by Japan’s heartbreaking tsunami

http://www.smartcompany.com.au/economy/20110315-global-economy-should-not-be-badly-hit-by-japan-s-heartbreaking-tsunami-oliver.html

Rosenbush, Steve (March 15, 2011) How Japan Earthquake Will Impact Global Economy

http://www.institutionalinvestor.com/rss/Articles/2787087/How-Japan-Earthquake-Will-Impact-Global-Economy.html?p=1

Reuters (March 16, 2011) Japan’s rebuilding needs at least 5 years (in Japanese) http://jp.reuters.com/article/topNews/idJPJAPAN-20060120110316

Sakai, Koichi (March 18, 2011) In 10 years Japan to become an attractive country to invest in, according to a famous U.S. investor (in Japanese)

http://business.nikkeibp.co.jp/article/manage/20110317/219023/

Sato, Motohiro (March 15, 2011) Overview of economic loss from the Japan disaster (in Japanese)

http://diamond.jp/articles/-/11498

Takenaka, Heizo (March 16, 2011) Huge disaster when the economy was about to recover (in Japanese)

http://www.nikkei.com/biz/editorial/article/g=96958A9C93819499E3E6E2E2998DE3E6E2E1E0E2E3E3E2E2E2E2E2E2;p=9694E2E4E3E2E0E2E3E2EBE4E1E6

2011年3月21日月曜日

How the World and Japan Should Handle Japan Disaster

Osaka - Monday, March 21, 2011




Following the author’s previous articles The Reality of Japan Disaster – Affecting Nationwide and What Aids Japan Needs and Why from the Natural Disaster, the author would like to share the essence of an online article in which Dr. David Neal of Oklahoma State University (leader of disaster study centre), an U.S. expert who have been studying this topic for over 30 years, was interviewed by a major Japanese journalist and posted as an online article of a leading Japanese business media on March 17, on how the Japan disaster should be handled.



1. How Dr. David Neal sees the Japan disaster as an expert?



Concept of “natech disaster” has been an area of study for the past 15 years. This is “tech(nology” disaster triggered by “na(tural)” disaster.



The Japan earthquake is such a typical example. Huge earthquake triggered massie tsunami that completely destroyed social infrastructure. This was followed by the Fukushima atomic plant issue, making the disaster extremely complicated.



There would more likely be other issues such as breakout of fires (like Kobe earthquake in 1995) and possible contamination of water; however, as of March 17, everyone had been in panic to forget possibility of such issues. In such a situation, it is extremely difficult to develop a (detailed) plan of rescue and reconstruction.



For the time being, there would be repeated “changes” and the most important thing is for everyone to be flexible to adapt to such repeated changes without being too sensational.



2. The most urgent issue (as of March 17) was how to avoid the worst scenario. What is the advice from Dr. Neal?



What needs to be discussed is “science” of handling this issue, and not pros and cons of nuclear plant.



Repeated changes of instructions given to residents to evacuate (first residents within radius of 10 km then 20km, then instructing residents within radius of 20-30 km to stay indoors) was what Dr. Neal was surprised at. He says that that it would have minimized the confusion if the instruction had been more with some allowance, taking into consideration that it would be rather difficult to transport residents by bus etc. to safe area (when transportation infrastructure such as roads is severely damaged with earthquake).



Moreover, the fact that information about the atomic plant became snarled amplified confusion. One reason for this is the difference in viewpoint/opinion among the Japanese government, electricity company (TEPCO) and experts, which was something similar with the Three Mile Island issue in 1979. The background for this is the difference in standpoint (for or against nuclear plant/energy), which is about “politics”. However, what is necessary is “science”, not “politics”.



3. How should the Japanese government handle this?



The government needs to disclose the facts as they became clear, and continue open communication with the Japanese citizen (and with the international community). If the situation should deteriorate, assess and communicate again. Repeat of such cycles.



One incorrect “myth” of disaster is the fact that (the government’s warnings) are considered to immediately cause panic. It is usually believed that when people are instructed to evacuate, they would immediately get into cars to do so, causing traffic jam; however, that is not necessarily quite true.



Usually the first reaction of the people to the government’s warnings is “do nothing”. Most people “wait” until more information is disclosed. Then when it comes to a point, there will be a panic.



4. How should the government communicate the information accurately?



Japanese people are well educated regarding what to do should an earthquake occur; however, it seems that they were not so well educated regarding what to do should emergencies of tsunami and atomic plant occur.



As to nuclear plant issue, the ideal thing was that the government and electricity companies have been sufficiently communicating with residents, and had given guidance on how to evacuate etc. should an issue occur, thus establishing good relationship of trust. Such relationship would be a great help should in crisis. This is a lesson for everyone in the future.



What can be done from now on is someone (background etc. of that person does not matter) whom people help/take initiative in open communication with the general public.



5. How are other issues?



The problem is the fact that it is extremely difficult to understand the big picture of the disaster. In most disasters, within the first 5 days, first phase of the rescue is mostly complete; i.e. people who survived are rescued, overview of the disaster is understood, and dead bodies are collected and identified. However, this disaster covers such a wide region and such process is rather slow (despite much efforts/assistance by various parties from around the globe). More human resources and assistance from Japan and the international community is vital.



After such a phase comes reconstruction phase. Infrastructure reconstruction would no be only of business/commerce. Focus in reconstruction phase include starting from what would be the most effective to reconstruct transportation of necessities/goods; how many people temporarily evacuated to look after where, how and for how long; how and with what pace to reconstruct housing and business/commerce facilities in order to support people’s lives and economic activities, to name a few. This is because people needs to be employed to make a living even if they have housing, and even if they are employed without housing business/commerce activities would not function appropriately.



Psychological support of people in devastated area is also important. People have been noble and helping one another, as reported by worldwide media. However, although it has not appeared on the surface, it is quite possible that after about half a year many such people would suffer from PTSD (posttraumatic stress disorder). Usually not so many people would suffer from PTSD in natural disaster but in this case so many people have seen people including their families and friends taken away by tsunami and dead bodies. Therefore, psychological care of such people is also very important.



6. What is the key message from Dr. Neal?



The key would be to make upmost effort with integrity and flexibility. Japan needs brave actions, exceptional mindset, and resources (from around the globe). Experts like Dr. Neal himself and his team outside Japan would like to give full support.



7. The author’s final thoughts and additional comments



The article presents the guidance for all of us to handle the disaster, together with lessons for the future. Appropriate, open, timely communication of facts and of correct information is vital. Everyone needs to be calm and be flexible.



Besides the issues of radiation/contamination, electricity shortage, reconstruction of total social infrastructure, effect on global and Japanese economy etc., what is becoming a serious issue includes urgency of medical aids (experts, medicines, all other goods/services related to healthcare). Reason unique to this disaster include the fact that body temperature of many people in evacuation centres are very low (some even below 30 Degrees C) from tsunami, the region is still cold this time of the year, in addition to shortages of medicines, all healthcare goods/services, and experts.





References:-

Urgent interview to Dr. Davit Neal, an expert representing the U.S. in handing disasters – “What we can do now and what we need to do in the future from the Japan disaster” (Posted on March 17, in Japanese, interviewed and written by a Japanese journalist, Ms. Noriko Takiguchi)

http://diamond.jp/articles/-/11522





Resources:-

The key in handling the Japan disaster would be to make upmost effort with integrity and flexibility. Japan needs brave actions, exceptional mindset, and resources from around the globe. Experts in this realm from the U.S. like Dr. Neal himself and his team would like to give full support. This presents the guidance for all of us to handle the disaster, together with lessons for the future. Appropriate, open, timely communication of facts and of correct information is vital. Everyone needs to be calm and be flexible.

2011年3月20日日曜日

What Aids Japan Needs and Why from the Natural Disaster

Osaka - Sunday, March 20, 2011




There have been much aids from many countries, regions and people around the globe, including human resources of experts in various realm and donations of goods/materials, to rescue and heal people, to clear rubbles from major roads and Sendai airport to secure transportation channels, and to help people without homes and deliver necessities and energy fuels and to such people and staff/places helping them, to name a few. With such supports, there has been a big progress in the first week since the earthquake and tsunami that struck northern east Japan on March 11.



The author specializes in marketing and is not an expert in this realm; however, following the previous article The Reality of Japan Disaster – Affecting Nationwide which is the overview of the affect of the natural disaster as of March 19, the author would like to share what aids are ongoing and what aids she believes is vital and why to minimize negative effect on global and Japanese economy, from the first hand information she acquired from her online friends throughout Japan and what she and her employer have been doing as well as Japanese and western media and other sources.



1. What aids are ongoing besides the aids that countries and regions kindly offered immediately after the natural disaster?






1) From media



Media have been making upmost efforts to communicate critical information in a timely manner. Japanese media immediately started campaigns to collect relief money.



2) From companies



Companies including those that were severely affected by the disaster immediately started their own aids leveraging their business and products.



Telecommunication companies such as SoftBank, NTT and Google immediately started providing services to help confirm safety of people in devastated area as well as quickly recovering from mobile phones not being connected in Kanto (Tokyo etc.) immediately after the earthquake.



Automobile and consumer electronics companies (especially Japan big 3 of automobile companies; and consumer electronics giants such as Panasonic and Toshiba) most of which are severely affected because many of them have core plants in hardly hit Tohoku area, were quick in their action. They decided to provide financial aids (e.g. donate 300 million yen) plus their products. Automobile companies decided to donate cars and trucks for transportation of necessities. As an example of consumer electronics, Panasonic decided to donate batteries, radios and TVs so that people in evacuation centres to help people in evacuation centres obtain information and lead daily lives. As in the case of Nissan, they also welcomed 100+ people in their global HQ in Yokoyama on March 11 who could not go home when train services became unavailable.



Healthcare/pharmaceutical companies, Japanese and foreign affiliates (e.g. Takeda, Daiichi-Sankyo, Pfizer, Novartis, GSK, MSD), have been providing aids with similar concept; i.e. financial aids (100-300 million yen) via Red Cross and for some companies donation of medicine in addition. Shortage of medicine in devastated area is becoming a serious issue so this has much meaning.



Many companies of other industries have been providing aids in the same manner, and many foreign affiliates have been supportive as well. A few examples of the companies that the author’s friends works for include P&G (Japan office located in Kobe) that decided to provide financial aids and already sent some of their products such as diapers as donation based on their lessons from the Kobe earthquake in 1995, and IBM that provided some IT services for free.



3) From NPO/NGO and other organizations, local communities



Many NPOs and NGOs, worldwide and Japan, also were quick to take actions to provide aids leveraging their strengths.



As in the case of Japan, NPOs, NGOs and local communities immediately started campaigns of collecting relief money and goods. They also started planning how to organize and dispatching volunteers when we get to that phase.



Campaign of collecting relief money was initiated by famous athletes in sport games.



Many local communities (groups of people) in the devastated area voluntarily established unofficial evacuation centres.



Groups of hotels in spa resort area in midlands (away from the devastated area) started to welcome people evacuated from Tohoku area in their rooms.



4) From small and mid sized business owners, individuals



Business owners of small and mid sized business and individuals have also been setting up their own campaign to collect relief money and/or promoting campaigns of collecting relief money, as well as proactively sharing valuable information.



There is also a case in which the concept/objective of their upcoming event due in middle of April is now changed from sharing information and matching business owners to start and drive businesses to charity.



Many Japanese celebrities (business owners, TV stars and singers, journalists, athletes) announced that they will give relief money and/or give revenue from events etc. as charity.



2. What aids are still necessary, from Japan and from around the globe?






1) Goods, medicines



Necessities (food, water, blankets etc.) have started to arrive in the devastated area; however, one-time delivery will not keep people there to survive.



Fuel to keep people warm is also necessary. The temperature in Tohoku in this time of the year is still low. In fact it was as cold as middle of winter within the first week after the disaster and it snowed.



Medicine will started to arrive in the area soon but one-time delivery for this also will not be sufficient. Shortage of medicine and medical experts is becoming a serious issue. A few elders already died in evacuation centre and flue has emerged. Without medical aid it is quite likely that people who were rescued to survive the disaster would die.



Goods (e.g. foods) disappeared from shelves of supermarkets in Kanto area (e.g. Tokyo, Kanagawa/Yokohama, Chiba) and there seems to have been only little improvement but there are sufficient goods for people throughout Japan so as for area other than Tohoku it is the matter of Japanese consumers calming down instead of buying up more than they need for speculative stocking.



2) Transportation to deliver goods and medicines



This includes transportation vehicles and fuels. The key would probably be supply of fuels (gasoline/petrol). Shortage of gasoline has been a serious issue. For this reason, there were many cases in which goods arrived to places near Tohoku but could not be delivered to evacuation centres. Shortage of gasoline also made people in the Tohoku area with cars unable to evacuate smoothly.



3) Rebuilt of life lines and social infrastructure



One reason why goods and fuels could not be delivered to Tohoku smoothly was the fact that social infrastructures including roads, which are inevitable for transportation of goods, were collapsed completely. It is why gasoline companies have been trying to supply gasoline from Japan Sea side.



Now primary route to deliver goods to main area is established but smaller routes to deliver to all the evacuation centres are not yet established.



And of course, the total area (many areas/cities are still flooded, covered with rubbles), needs to be rebuilt from scratch; from roads, buildings and houses, to supply of electricity, water and communication services. It simply reminds many people of rebuilding the country from World War II.



4) Resources, especially financial aid



Much resource would be necessary for ongoing rescuing, delivery of goods and medicines, helping people in evacuation centres survive and start getting back to “normal” lives, and rebuilding life lines and social infrastructure that is expected to take at least 5 years, according to the estimation of a Japanese expert based on the recovery from Kobe earthquake in 1995.



It is likely that extra resource aids become necessary in regions outside Tohoku, too. This is because prefectures and cities including those that have been affected by aftershocks and blackouts decided to welcome people evacuating from Tohoku area.



5) Information and environment to proceed with the total recovery



It is public and private sector, academia and individuals of Japan that are ultimately responsible for the recovery, with further help from other countries and regions, and such help includes “soft” aspects as well as “hard” aspects of goods, medicines, human resources and financial aids.



What the author means by “soft” aspects includes economic environment, appropriate information sharing, and mental assistance.



Key economic environment determinant include stock market price and foreign currency rate. As for the latter, the yen reached as high as 76 yen per USD, the highest in history, which was rather difficult to understand why, after the disaster. Such a high yen would be a huge negative factor for recovery of companies and the country when the recovery of Japan economy has been rather weak compared with the rest of the world. It was highly appreciated that the international community took measures to stop further high yen.



Information sharing includes sharing of correct information by Japanese and western media as well as accurate, trustworthy, timely information from the Japanese government. One reason why Japanese citizens were extremely confused about the Fukushima atomic plant issue at the beginning was the fact that information became snarled.



Moreover, the author simply could not understand nor believe when she was informed from one of her online friend in Canada (initiator to raise 5 million dollars to save Japan) who kindly provided with all the information he had with agility, that western sources have been communicating online that Japan no longer needs assistance from abroad, when the situation here is desperate. She believes there was a kind of misunderstanding and/or miscommunication; however, this kind of things should be avoided. This issue really made her depressed, when many kind messages she received from online friends around the globe made her feel better.



All media and individuals need to be responsible of sharing information in an appropriate manner. We should share only the facts, what we know and feel that is logical and rationale, whose source of information is trustworthy.





In the next article the author hope to briefly introduce what experts around the globe (Japan and overseas) estimate as possible effects of the natural disaster on the economy, global and Japan.

2011年3月19日土曜日

The Reality of Japan Disaster – Affecting Nationwide

Osaka - Saturday, March 19, 2011




It is over one week since Japan experienced twin tragedies, earthquake plus tsunami, followed by Fukushima atomic plant issue, as mentioned in the previous article Reality and Lessons from the Japan Earthquake / Tsunami Tragedy. There have been so many aftershocks in the region and other parts of Japan including Nagano (midland, between Tokyo and Osaka) and Shizuoka (West of Kanagawa/Yokohama, famous for Mt. Fuji) that are as big as magnitude 6 or more.



In this article the author would like to briefly explain the situation as of Saturday, March 19 (Japan time).



1. People dead and without homes in Tohoku (north eastern Japan, the region hit the hardest by the earthquake and tsunami)



This area is still in extremely critical situation.



1) Thousands of lives lost and/or in emergency



More people are reported dead and missing, and the lifeline and social infrastructure remains totally destroyed.



Now people dead topped 7,100 and people missing 18,000 according to Sankei, a major newspaper and convey through Yahoo! Japan news. This is greater than 6,400t of Kobe earthquake in 1995, and it is estimated that it would be in 10ks. 100ks of people are without homes, and although necessities (food, water, batteries, blankets etc.) are on the way to evacuation centres in the devastated area of Tohoku, they are not reaching people in need smoothly.



This is because the lifeline and social infrastructure was completely destroyed, meaning broken links (roads still need to be cleared, etc.), lack of gasoline. Also, the fuel to carry the necessities is insufficient although parties are making upmost effort to provide gasoline from Japan Sea route. Moreover, the fact that the area covers such a wide range of scope, unlike other earthquakes Japan experienced such as of Kobe, Niigata, and Tokyo, make it extremely tough to distribute necessities to all the evacuation centres.



Medicine is also insufficient and a few elders died in evacuation centre. Flu broke out and experts in this realm are extremely anxious that in this situation the flu may well spread quickly from which many people die, after survived from the earthquake and tsunami.



2) An example from Fukushima



The situation is probably the worst in Iwaki City in Fukushima prefecture. This is in addition to the reasons mentioned above, the drivers of trucks carrying the necessities refrain from delivery and return because they are afraid of the radiation, although this city is outside 20km and 30km radius from Fukushima atomic plant. In NHK news in the evening of March 18, messages from people in evacuation centres in Iwaki were introduced. They believe the necessities and aids are on the way but psychological situation of them and the staff as well as necessities are almost the limitation, and they feel they just will die there.



3) Evacuation to other parts of Japan



People in Tohoku and around Tohoku area also started to evacuate voluntarily to other prefectures and prefectures/cities to nearby prefectures including Niigata (located in Japan Sea coast, that suffered from earthquake in 2007, and prepared 43 evacuation centres and welcomed 7,650 people without homes from the earthquake and tsunami by evening on March 17, as reported on March 18 by Yomiuri, a Japanese leading newspaper) and Saitama. Such prefectures/cities as Yokoyama and Osaka (in the western Japan) said that they will prepare to welcome such people as well.



2. Kanto (e.g. Tokyo, Kanagawa/Yokohama, Saitama, Chiba, Shizuoka)



This area is not functioning as usual.



1) “Planned” blackout



Due to electricity shortage (attributing to halting of Fukushima atomic plant as well as the initial effect of power down), there have been “planned” blackout, which is expected to continue until at least the end of April. This caused chaos in commuting by train because many trains became out of service or decrease in number of train in service and therefore companies made their employees to go home after they finally arrived in the office just before noon, and/or work from home. Also, many business people were forced to leave their office all of a sudden before the “planned” blackout. Retailers have been forced to operate in limited hours (evading blackout hours).



During the blackout hours, polices have been replacing traffic lights giving signals but still there have been many accidents. The blackout is especially critical in hospitals because some patients live on equipment operating on electricity and therefore finally blackout in hospital areas was avoided. The blackout was also very difficult to cope with in nursing schools and they prepared for it by making infants where extra clothes etc.



Much preparation is necessary in households, too. As in a case reported in TV news, bags full of ice were made and put into refrigerator. Of course, recharging was done. Mother made her children wear extra clothes. She also prepared to show her children see movies on recharging PCs so that they would not be scared in the darkness.



2) Little food in supermarkets and convenience stores



Soon after the earthquake on March 11, the shelves in supermarkets and convenience stores became empty, probably because people became anxious and started speculative stocking. This is why the author and her colleagues at work in Kansa (western Japan) went around shops near her office on March 14 and 15 to buy necessities to send to employees of her company in the devastated area. Tokyo HQ would usually take such initiative but it was impossible for them to do so.



With extremely limited circulation of foods in addition to blackouts, some schools closed because they simply could not provide children with school lunch. Some others kept open but children had to bring their lunch with them.



3) Biggest aftershock in Shizuoka among hundreds of aftershocks – messed up inside buildings, Shinkansen Bullet Train stopped temporarily



There have been hundreds of aftershocks of magnitude 3 – 6+. Perhaps the biggest one was of magnitude 6+ in Shizuoka on March 16. The shop floor of a retailer reported by a TV crew just after the earthquake was a complete mess; all goods cannot be sold as products anymore. Also, immediately after the aftershock, Shinkansen Bullet Train service stopped around Shizuoka, which took a few hours before the service became available again.





In the next article the author would like to briefly explain what aids Japan needs in this critical situation to minimize negative effect on economy, global and Japan.

2011年3月13日日曜日

Reality and Lessons from the Japan Earthquake / Tsunami Tragedy

Osaka - Sunday, March 13, 2011




On Friday afternoon of March 11, magnitude 8.8 earthquake (being revised just now, 12:57, to 9.0, in the explanation broadcasted in the TV news, because of multiple collapse of fault) struck Northern East Japan, provoking huge tsunami, which is described as “Death Wave” and “Hell on Earth” by the U.S. media headlines. This is the largest in Japan with the energy is 180 times that of the Kobe earthquake in 1995 that made the beautiful Kobe city (in western Japan) into a hell all at once mostly with fire, in which as many as 6000 people or more died.



Investigation, rescue and support will be ongoing for a while. Smaller earthquakes of magnitude 3-5 has been continuing in places or wide a scope including in southern area such as Ibaragi, Chiba, Tokyo and Nagano, which is assumed to continue for a month.



1. How is the situation as of 12:55 of March 13 (Japan time)?






1) North Eastern Japan



According to the TV news the author had been watching wince this morning, more than 2,100 people are dead or missing (the number continuously increases even when the author is watching the news), 10,000 people cannot be contacted, 2.15 million households are still without electricity, hundreds of houses are destroyed and hundreds of people are still being evacuated. The devastated area remains submerged. Transportation is paralyzed.



2) Other parts of Japan (Kanto area such as Tokyo, Chiba, Saitama, Kanagawa and others)



Even Tokyo and prefectures around Tokyo, far away from the earthquake, were severely affected. Tokyo suffered from earthquake of magnitude 5. Some buildings were partially collapsed. Public transportation paralyzed on March 11 and therefore people had to walk from work/ school or stay overnight and Shinkansen bullet train also stopped (thus people could not return from Osaka, western Japan, to Tokyo), but recovered smoothly the next day.



According to the TV news, currently 310,000 households in Kanto area are without electricity, and 1.4 million houses from Hokkaido to Kanto are without water. Also, Tokyo Disneyland and Disney Sea in Chiba will be out of service for a while.



3) Factories of leading Japanese Companies



Many global companies located in Japan with factories in the devastated area or in places nearby are forced to stop domestic production for a while, as reported by media including those of the leading U.S. media on March 12. Such companies include automobiles such as Toyota, Nissan and Honda, and consumer electronics such as Panasonic, Sony and Toshiba.



2. How were the actions by various parties?



People evacuated as instructed by government, and investigation and rescue have been ongoing. Experts have been getting together to share information and discuss.



Over 60 countries and regions around the globe including New Zealand that recently suffered from their own earthquake tragedy offered for help and staff are now arriving one after the other this morning. Some countries such as Germany and the U.K. arrived. 150 people from the U.S to arrive soon (or arrived by now).



The Japanese government decided to increase SDF (Self Defense Force) of Japan from original plan of 50,000 to 100,000.



Telecommunication and IT companies have been quick in starting services to help people to connect, share information and find missing people.



Red Cross and many NPOs were also quick in their actions to help. Some individuals also started to act such as donations.



3. What are the lessons from the tragedy?






1) Importance of Risk Management, BCM/BCP and Crisis Communication



It may well be difficult to have simulation training like the one the author experienced at work in 2007 for pandemic flue BCM (Business Continuity Management) / BCP (Business Continuity Plan) and crisis communication but risk management is necessary so if an emergency similar to this earthquake should occur in the future all parties can take appropriate actions immediately and disaster is minimized.



At least manuals should be ready and actions should be taken based on the manuals.



Crisis communication is especially the meaningful lesson from the Fukushima atomic reactor issue. This issue is something unique and significant to this earthquake tragedy yet the information became snarled and many people were confused. This is because this issue was reported with possibility of the meltdown by worldwide media before the official announcement was made by the Japanese government (speech by the Prime Minister and then explanation by the Chief Cabinet Secretary from 20:30 on March 12, which was after the explosion of the first reactor around 15:30. It turned out to be that it was not of the meltdown, the worst scenario, but it seems to take time to “correct” the information once proliferated worldwide.



It is highly understandable that the government needed time to investigate and find out the truth before making an official announcement but they could have minimized misunderstanding if they acted differently much earlier. The government has been disclosing information in a timely manner since the announcement last night and frequent updates have been made this morning.



2) Importance of integrity in accurate information sharing



There have been chain mails which had spread incorrect, negative information about a gas station company whose source and how it started is completely unknown. The corporate communications of the company immediately made a comment saying so and that the company is very sorry to have made nearby residents worried.



With social media, everyone can be a publisher and share information online to make it “viral” so responsibility of the individuals is vital and the key words would be “integrity” and “calmness”.



The above is an exceptional case and there have been information sharing based on “integrity”, helping to overcome the tragedy. Some examples to name just a few include calling to all people in Japan to save energy and transfer the saved energy to areas that suffer from electricity shortage, sharing information about the services of telecommunication and IT companies mentioned above, sharing useful websites, and asking people for information about the friends who cannot get in contact with.



4. The author’s final thoughts



Whatever the situations might have been until now, we cannot go back to the past. We simply need to move forward. We cannot afford to insult or fight with internal and/or external stakeholders. Every individual, every organization and every country/region is expected to help one other, do what he/she can, and fulfill his/her responsibility.



Of course, we need to learn from the incident so that we can manage should something similar occur in the future.



We are all connected and inter-dependence in the today’s global world. That is how we can all survive, co-exist, co-prosper, and realize sustainability.





Resources:-

The earthquake and tsunami tragedy that struck Northern East Japan presents lessons such as risk management and crisis communication, and what kind of mindset and actions we (individuals, organizations, countries/regions) need to have to overcome tragedies. Such mindset and actions are also requirements for sustainability of all of us in the today’s global world.

2011年3月8日火曜日

Shinkansen Bullet Train Extension Throughout Japan – Meaning, Benefits, Actions

Osaka - Tuesday, March 8, 2011




With completion of the extensions, Shinkansen bullet train is to go through across from north to south Japan on March 12 (excluding Hokkaido and Okinawa islands). This allows us to travel more than 2000km from Aomori in the north end of the mainland to Kagoshima in the south end in of Kyushu in southern Japan by train only in about 8 hours. This project has been ongoing for many years and is expected to boost tourism and economy of regions and towns along the Shinkansen, while competition between railway and aviation industries would become fierce.



1. How has the Shinkansen bullet train been until today?



The Shinkansen service first started between Tokyo and Osaka of 552km in 1964. The service was then extended between Osaka and Hakata (capital of Kyushu in southern Japan) of 644km. More extension followed from Tokyo towards northern Japan and towards Japan Sea Regions of Johetsu and Hokuriku to name a few.



At first there were Kodama, which stops at every station and Hikari, which is express. It used to take 3 hours from Tokyo to Osaka by Hikari but with the availability of Nozomi, super express, since 1993 it now takes only 2-1/2 hours from Tokyo to Osaka.



2. What is the Shinkansen bullet train route extension project?



It is to extend to make the route truly extending across the nation from north to south. The recent northward extension to Aomori of 714km was complete and the service started on March 5, 2011. And the southward extension in Kyushu from Hakata (northern Kyushu) to Kagoshima (southern Kyushu) of 2167km is to complete to start its service on March 12, 2001.



The two extensions are one of the hottest news among the many past extensions. The ticket to ride on the first extended Shinkansen sold out in less than 5 minutes.



More extensions are ongoing and being planned across to cover major cities and regions nationwide, excluding Okinawa.



3. What are the benefits of the extension for travelers?



1) Quicker and easier travelling



It is the fact that people can travel from South to North Japan without changing transport, much quicker than it used to take. For example, the author travelled from Osaka to Kagoshima last year which took total of 4 hours, changing trains. She went from Osaka to Hakata by Shinkansen (Nozomi) which took 1-1/2 hours, changed to JR (Japan Railway) limited express and rode for over 1 hour to a station in Kumamoto, then changed again and rode Shinkansen (Hikari) to Kagoshima for 40 minutes, meaning total of 3-1/2 hours. This is far quicker than before Shinkansen services became available but changing trains multiple times is inconvenient. However, it would only take 3 hours without changing trains after March 12. The similar benefit applies for the northward extension.



2) More options



The fact that by Shinkansen people can travel nationwide on trains means more options for travelers. Due to burden of changing trains and long hours of travelling, most travelers would choose to travel by air if they are to travel from Osaka or Tokyo to Kyushu other than Hakata, or Tohoku other than Sendai. In reality people travelling from Osaka would always choose to travel by air if they need to go to Tohoku.



However, with the Shinkansen extension, it would be realistic for people to travel nationwide by Shinkansen as well as by airplane. Therefore, they would be able to choose the optimum option according to the available time and cost, and preferences.



4. What would the extension mean for related industries?




It means more competition between railway and aviation industries. The two industries have been competing between Tokyo and Osaka and between Osaka and Hakata and therefore there have been two types of travelers, especially in business; one preferring Shinkansen and the other preferring planes.



With the Shinkansen route extension the scope of competition would extend to nationwide, when the third player of cars became another option for holiday travelers and the competition has been increasing. This is because the Japanese government implemented a system in which one time fee of 1000 yen allowed car drivers to use motorway nationwide at weekends and holiday seasons since last year when the fee varied according to the distance and it could be as much as almost 10,000 yen.



5. What has the cities/regions been doing to benefit from the Shinkansen extension?






1) From Tourism



To benefit from the Shinkansen extension, Aomori has renewed the area around the new Shinkansen station, and has been proactively developing, announcing and executing campaigns to attract tourists. In addition, restaurants and shops in and around the station have been creating new products and services



Three prefectures in Kyushu, Fukuoka (in which Hakata belongs), Kumamoto and Kagoshima, have been planning and executing something more dynamic and strategic. Not only do they plan to attract tourists within Japan but also from neighbor Asian countries by collaborating to develop strategic campaign and joint-announcing to tourist agencies in Asian countries such as South Korea and China. This kind of campaign was not feasible before the Shinkansen extension when it was such a burden in terms of time and effort to visit all three prefectures.



2) From population increase and city development



With the Shinkansen extension in Kyushu, it would take just over 1-1/2 hours to travel from Hakata to Kagoshima. This time is quite commutable in Japan and therefore it is quite possible that the extension have a big influence on population shift and city development. In fact, multiple flats including modern, luxury ones are being built near the new Shinkansen stations.