Monday, March 28, 2011

Dr. Peter Apedaile's reflections

I received some thoughtful comments from Dr. Peter Apedaile today. He reports on a conversation he has had with Dr. Tsuboi regarding possible responses to the crises in Japan. You are welcome to contribute to this conversation by clicking on the word "comments" at the end of any blog, then filling in the "Post a Comment" box which appears or by e-mailing me with a request to add your comment to the blog.

Peter wrote:
"Here is an edited cc of some thoughts with Nobuhiro. How can we academics, intellectuals, ex and current, make any difference? One way is to start thinking ahead beyond the tragedy of the moment. This is not heartless. But what options are opening? Mayor Kanno is responsible for on-the-spot action. Not a lot of time to think longer term. Can we be useful?

Since returning from Cuba last night, I have read many emails from friends in Japan and am so relieved that our CJ Family are well.

I am sure that the economy of Iitate-mura is devastated. I wonder what helpful advice we economists could offer to Mayor Kanno??? Of course if cesium radiation affects the whole Mura, perhaps it will have to be abandoned. It was always an option for such hilly and remote rural economies to become natural parks with minimum population density and focus on ecological amenities in the long run.

Iitate was slowly moving in this direction it seemed to me. Awano may have more options as long as cesium stays out of the picture. But here again, the game has changed. It seems useful to do some new thinking about a geographic strategy to disperse the location of industry in Japan. Awano already has a lot of intermediate SMEs of course. We can see how the concentration along the east coast with major concentrations in places like Sendai hurts the entire Japanese economy.

Since the Japan Plate is a reality, perhaps there is logic for expanding light industrial investment to more remote rural places without forgetting the vulnerability of transport infrastructure. A very small difference in the epicentre would have devastated the Tokyo part of the Japan economy. Chiba showed some of this threat with the fires.

Right now, the equity problems of Daichi Electric (loss of stock value) also apply to farms and businesses in Awano and Iitate. Will the banks help them too and in time? Japan's debt and deficit situation makes it hard to use public finance to help private recovery let alone for infrastructure and loss of tax revenue. How to unlock the savings from over-65 Japanese to finance economic recovery, when it is already tied up supporting the national debt??? Do we need to think of new types of global financing instruments for natural disasters too big for even a Japan??? Local options?

As a former mayor and councillor, I understand that Mayor Kanno is in charge of information when a disaster strikes. We must all understand that information in a disaster is a number one management problem for the Mayor. The press must not jump to spread the feeling of mistrust, as I have seen on CNN while in Cuba. He is correct to criticize the media for jump and run coverage of a rapidly changing scene, imperfect knowledge and huge remediation and response efforts to correct never-before-seen problems arising every minute.

Bravo to Mayor Kanno and many other municipal leaders, who survived to organize the crisis and start the recovery."

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