Richard Koo: Eastern Japan quake leaves massive damage in its wake

Richard Koo “Last Friday’s earthquake was Japan’s largest ever and struck a devastating blow to the nation, especially to the Tohoku region in the northeast. With towns and cities completely washed away by the tsunami and mountain villages rendered unreachable by rescue teams as a result of landslides, it is thought that the number of dead may exceed 10,000, with hundreds of thousands forced out of their homes. I would like to express my sincere condolences to those affected by the disaster.

The quake has already interrupted the production of food, energy, and manufactured goods, with conditions not expected to return to normal for weeks or months. It appears increasingly likely that economic activity will suffer even in areas not directly hit by the earthquake or the subsequent tsunami as rolling power outages, disruptions to the transportation network, and supply chain problems interfere with production.

The uncertainty surrounding the situation at the nuclear power stations in Fukushima is also a major negative both in terms of the energy supply outlook and the psychological impact on the public. Official statements in the initial stages of the crisis were inconsistent and far from convincing, which has served to breed distrust of the government both inside and outside Japan.”


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