Companies, Individuals Must Pull Together For Japan's Economic Recovery
On 14th March monday morning, just three days after the massive earthquake and tsunami had struck Japan, the country did its best to get back to work and to keep the economy running.
As anticipated, the markets were already shaky, which saw the Nikkei Stock Index drop well below the 10,000 yen mark. It dropped again on March 15, dipping below the 8,500 yen level in the early afternoon.
From an economic standpoint the earthquake struck at a particularly bad time, just when Japan was beginning to pull out of stagnation. However, despite the crisis, Japan has managed to avoid economic panic. The Bank of Japan made record high levels of cash available in a bid to further ease its monetary grip and keep the financial wheels turning. Private institutions, too, were working hard to reduce the impact on customers and consumers to the absolute minimum under the circumstances. It is this kind of energy that will see Japan through the current crisis.
"This disaster will produce enormous losses", Japan Business Federation (Nippon Keidanren) Chairman Hiromasa Yonekura said recently. Indeed, in addition to the human sufferings caused by the earthquake and tsunami, a huge economic impact is unavoidable. "From this point on, it is essential that companies make every effort to avoid as much of the effect as possible," Yonekura added. If both companies and consumers act only in their own interests, putting short-term profits first, this will result in overall losses. If everyone run to stores to buy up stockpiles of daily necessities, this will cut into supplies for those in northeast Japan who currently need them most, adding further burdens on an already devastated population.
However, there is some encouraging news in the expanding scale of aid to the stricken areas. Telecommunications firms are providing free services to disaster victims and evacuees. Manufacturers are also pitching in, with Sony announcing it will contribute money and 30,000 radios - often the only way those in disaster-stricken areas can get up-to-date news. The cosmetics giant Shiseido has decided to donate money and shampoo that doesn't require water for victims?f use. Good results can also be expected with more electricity conservation efforts and the use of self-generating electricity at homes, for example through the use of solar energy. These contributions and support will have a far-reaching impact.
At this point in time, it is extremely important to get all bills tied to the fiscal 2011 budget draft that was passed, and for the Bank of Japan to keep a steady stream of credit flowing. Government support will be imperative. However, the foundations of Japan's economy has always been its companies, workers and consumers. The power of the Japanese people, whom have learned and strengthened through overcoming many of the country's past crisis?f and adversities, has become their greatest resource. The world is watching closely, and is expecting a Japanese recovery. I too believe that Japan will be able to demonstrate its resilience and will recover from this.