AIZUWAKAMASTU, Japan -
Hideo Sato, 47, and his family escaped to this
snowy city 200 kilometers from the radiation
emitting Fuksuhima power plant that was struck by
the earthquake-driven tsunami on March 11.
"We were forced to move from our house in
Okuma-machi barely eight kilometers from the
damaged nuclear plant. We wanted to protect our
children from radiation, but now we are at the
mercy of the government," he said.
months after the disaster, Sato, a former employee
at a car sales company, lives on a US$1,500
dole. His wife is occupied
with looking after their three children and cannot
take up a job.
Sato's plight is shared by
tens of thousands of people from the
tsunami-battered coastline of northeastern Tohoku,
that was home to factories producing automobile
components and semiconductors for export. The
World Bank estimated the economic cost of Tohoku
to be $235 billion, making it the most expensive
natural disaster in history.
disaster has added to Japan's financial woes. The
Tohoku disaster, the high yen, and the global
economic crisis spell a bleak forecast for the new
year," Kenji Obayashi, an economist at the Asia
Pacific research center at Waseda University, told
(Inter Press Service (IPS).
world's third-largest economy after the United
States and China, is now facing difficult economic
decisions as the country gropes its way to
Apart from the crippling natural
and nuclear disasters, the Japanese economy is
reeling from a yen that has strengthened almost
30% against the US dollar, hurting export
competitiveness. In turn, this has increased
unemployment and depressed domestic demand. To top
it all is the scare of a loss of energy supplies
for the resource poor country.
Tsutomu Toichi, advisor to the Institute of Energy
Economics, warns in this month's Nippon, a leading
news magazine, that the non-operation of nuclear
power reactors that hitherto met 30% of national
energy demands has created a bleak picture.
"At present local governments are refusing
to allow operations [of nuclear power plants] to
resume after inspections because of public
wariness towards nuclear power. To make up for the
shortfall in electricity supply the government
will step up generation from existing thermal
plants. In such a scenario fuel costs would soar,
costing the manufacturing industry 38% higher in
electricity fees," he wrote.
depressing backdrop, the Japanese government
approved a $1.16 trillion draft budget last week
for the fiscal year, starting April 2012.
Allocation for disaster reconstruction was set at
Tokyo Electric Power Co
(TEPCO), the operator of the Fukushima plant, has
asked for $8.8 billion in aid from the
state-backed Nuclear Damage Liability Facilitation
Fund for compensation payments to those who had
voluntarily evacuated. This is additional to the
$11.5 billion already granted to TEPCO.
Obayashi explained to IPS that the latest
budget will not herald a miraculous transformation
but serve as a stopgap measure to deal with the
grim reality of an aging population that is
increasing social security spending - already at a
record high of $270 billion, or one-third of the
rates stands at 4.7%, with disaster affected
prefectures now reporting close to 7%. More than
three million people, or 20% of the working sector
earns less than $20,000 annually, on the poverty
Named the "working class poor", the
increasing number of people who work at two or
even three jobs to get by are a poignant symbol of
the breakdown of a once dynamic economy where
unemployment was almost negligible.
Developments in Aizuwakamastu, now home to
6,000 nuclear evacuees from Fukushima vicinities,
have become a focal point for ongoing discussions
on post-disaster recovery. This city of 150,000
people known for its pristine mountain landscape
and hot springs was already struggling with
domestic economic recovery when the Tohoku
disaster struck, badly affecting tourism and
Kumi Inamura, a member of the
Aizuwakamastu town management organization, told
IPS that the city is taking tentative steps to
boost the local economy through local solutions.
"Aizuwakamastu can no longer depend on
injections of public funds from the central
government because Tokyo cannot afford to do
this," she said. Her organization is now helping
local business projects by supporting people who
can start new ventures and boost jobs.
Aizuwakamastu is facing a 90% drop in the
number of tourists this year, affecting local
souvenir shops and hotels. "Income from tourism
was heavily dependent on school excursions that
have fallen drastically after the radiation scare
in Fukushima," Inamura said.
produce has been affected and local small and
medium companies in the area that supplied the
information technology industry face tough
competition as large Japanese conglomerates begin
to build factories in cheaper parts of Asia.
Ideas being floated include turning Aizu
University, the lone higher education institution
in the city into a venture business center and
giving students venture capital.
incubating projects that receive support are
businesses owned by women or those that promote
Obayashi said such
developments are modest but represent a crucial
transformation to Japanese society and economy.
"The stirring in Aizuwakamastu indicate a growing
desire in localities to do things their own way,"
Such moves, he said,
challenge the post-war economic miracle in Japan
when links between the bureaucracy and industry
created the invincible Japan Inc. "That is
crumbling now. We are moving to more diversity and
change," he said.