Wednesday, March 16, 2011

Will the trauma bring about historic change?

An 1855 earthquake that destroyed much of modern-day Tokyo bookmarked the twilight of the Tokugawa period, during which Japan was isolated for two centuries. Rebuilding efforts after the devastation of 1923 coincided with the rise of Japanese militarism. Kobe's 1995 tragedy dovetailed with the end of Japan's post-war industrial boom and the advent of deflation.

IT ALWAYS struck me as odd that Japanese bookstores have not just earthquake sections, but entire aisles of titles devoted to tectonic upheavals. After Friday's big one, I am now a believer in quake-ology.

Temblors have a complicated place in the Japanese psyche. There is a widely held belief, a local mythology, that tectonic-plate shifts can coincide with big ones above the ground, too.

Might this latest trauma also signal historic change?

Economist Nouriel Roubini has a point when he says the earthquake came at the 'worst time' as Japan struggles to reduce its massive debt. Let us go the other way for a moment, and explore three potential silver linings from this quake.

One, it is a wake-up call. Japan dithered for years as deflation deepened, wages stagnated and public debt exceeded gross domestic product. Even after China's economy blew past Japan last year and a Standard & Poor's downgrade in January, officials in Tokyo remained as paralysed as ever.

The days before Friday's quake saw Japanese politics at its worse. Foreign Minister Seiji Maehara, a 48-year-old who had been tipped to be the next prime minister, was browbeaten into resigning over a clerical error. His campaign had received US$3,053 since 2005 from a South Korean woman residing in Japan. By Friday morning, before the quake, the opposition was digging up similarly petty dirt on Prime Minister Naoto Kan.

Such complacency and distraction is no longer an option. Japan's leaders must now roll up their sleeves to rebuild after the strongest earthquake on record in Japan. And they must do so without the luxury of massive borrowing. As Professor Roubini, co-founder of Roubini Global Economics in New York, says, a 'shock like this' complicates reining in the world's biggest public debt.

Yet with a little political will, another kind of shock could befall Japan, author Naomi Klein explored in her 2007 book, The Shock Doctrine. Ms Klein's focus is on free-market ideologues who exploit crises to impose rapid and irreversible change in nations around the world. Fate may have just handed Japan a chance to unleash the doctrine on itself.

Japan might well benefit from any shakeup that encourages entrepreneurship from the ground up, increases competitiveness and imposes change on the decidedly change-resistant bureaucrats who really run the nation. For years, pundits said only a major crisis will bring about change in Japan. March 11 provided the shock; leaders just need to act accordingly.

Two, a chance to make up with China. The seemingly inexorable rise of 1.3 billion people and the competitive forces that come with such an economic event are bringing Japan and South Korea together, helping overcome hard feelings over a colonial past.

Now, China's rapid offer of help and condolences to Japan's earthquake victims could go a long way towards reducing tensions. It is the rare event that gets officials in Tokyo and Beijing to put aside prickly disagreements over economic, territorial, military and historical disputes. And here, we have one.

Three, a boost to Japanese confidence. In the days since the earthquake, editorials in Chinese newspapers shifted from bashing Japan to exploring what the Chinese can learn from Japan's speedy response and the orderliness of its people.

It is a valid point. While it is early days in the rescue effort, Japan has much to be proud of, from the way Tokyo's skyline withstood the tectonic assault to the lack of looting and social instability. The nation has shown itself to be a highly civil, stable and caring place.

Tough building codes, training and lessons from the 1995 Kobe earthquake that killed more than 6,000 people probably saved thousands of lives this time around.

Certainly, problems abound. The most immediate is containing the worst nuclear accident in at least 33 years, at a plant north of Tokyo. At a minimum, Japan must scrutinise the safety record of Tokyo Electric Power as never before.

Nor is the unpopular Mr Kan distinguishing himself. Information from his office has been lacking and downright contradictory at times. Mr Kan was basically on his way out before the earthquake, and how he handles things in the next few days will decide his political fate.

Yet, in this time of devastation and uncertainty, Japan has shown it runs well on many levels in spite of its government. This is a moment for sorrow and reflection, yes. It is also a time to look ahead to brighter days. They could indeed be on the way.
By William Pesek