Tokyo Times photo
Japan faces three big challenges in its efforts for fast economic recovery following the March earthquake and tsunami: the electrical power supply shortage, the supply chain disruption, and the Fukushima Dai-ichi Nuclear Plant disaster. Despite these highly problematic scenarios, Japanese should remain optimistic, the Bank of Japan’s economist Hiroshi Nakaso said Tuesday during a visit at the Harvard Kennedy School in the United States.
Nakaso, who is the Assistant Governor of the Bank of Japan, discussed the problems related to the Japanese infrastructure that aggravated the crisis. Nakaso also talked about what financial experts are doing to prevent a sharp fall of the economy, reports The Harvard Crimson, the daily college newspaper with the longest history in the U.S.
Although Japanese officials said the damage to the national industry totaled roughly 16 to 25 trillion yen – enough to completely block production in coastal Japan for some time – Nakaso has reasons to see the greater good in the current situation.
He explained that on the first business day after the earthquake, the Bank of Japan injected a record high ¥21.8 trillion into the economy, increasing liquidity and investors’ confidence.
He also believes that the economy could be boosted by demand for reconstruction, an opinion he said was shared by the International Monetary Fund, and mentioned there is a precedent to believe that GDP will not go negative, because shortly after the earthquake in 1995 “GDP remained positive for most of the period after the earthquake”.
Nakaso said he was especially impressed by how the Japanese youth got involved after the earthquake.
“They are voluntarily helping people in the disaster region. It’s reviving the activity and vigor of Japanese youngsters,” he said. “I am hopeful that this tragedy could change the course of Japan in the future. [The Harvard Crimson]