Editorial: Japan's losses will be shared by everybody

5:29 AM Tuesday Mar 15, 2011

The world will be a while coming to grips with the disaster in Japan. New Zealand knows better than most nations what an earthquake can do not only to communities and their industry but to people's basic amenities and their spirit.

Three weeks after the Christchurch quake, this country is still distributing emergency equipment, assessing damage, adjusting national economic settings, trying to get schools and businesses back to some sort of normality and planning the city's recovery. The quake Japan has suffered was at least 1000 times larger and so is its task of recovery.

Japanese are more accustomed to earthquakes than any other people in the world. Their search and rescue teams in Christchurch stood out with their uniforms, marching and equipment. Earthquakes on Japan's sector of the Pacific Rim shake the surface of cities there several times a year. But those are faultline tremors like Christchurch's two big jolts. Japan was hit last Friday by a movement of the Pacific Plate boundary that shifted the planet on its axis by 10cm, sent it spinning faster by 1.6 microseconds and knocked Japan 2.4m closer to China.

By all accounts it was not as violent as Christchurch's February shake but it lasted much longer and was followed by a tsunami that did far more damage. News cameras had time to get airborne and made the terrible power of water visible to the world. Coastal towns and villages in northeast Honshu have been wiped out. It has been estimated that more than 10,000 people have died and more than 12,000 buildings destroyed. At the weekend, 215,000 people had sought a haven in emergency shelters.

Japan is the world's third-largest economy. If the contraction in Christchurch has stopped a slow national recovery, the loss of so much of Japan is likely to depress global activity. Japan faces the loss of nuclear power stations with consequent electricity shortages. Its car industry has shut down for the time being, so has Sony. Japan's economy was not thriving beforehand; it has been suffering deflation since long before the global financial crisis. With interest rates already near zero, it had little room to stimulate the economy after the crisis, and there is little that its central bank can do now.

Government borrowing will take up the burden of reconstruction but consumer confidence will be shaken by the disaster. Japan is an insular society and its instinct will be to stay home for safety. Tourism to places such as New Zealand may suffer. New Zealand dollar bonds may be harder to sell in Tokyo. Many countries will be just as reliant on Japanese household savings and all will hope the country's confidence quickly recovers.

Eventually, of course, reconstruction will stimulate the Japanese economy, as it will on a smaller scale in or around Christchurch. But a year of land consolidation, insurance procedures, planning and building approval is expected in Christchurch before much growth returns. The Sendai region of Japan has suffered much greater destruction and its future must be more uncertain.

New Zealand has sent a search and rescue squad that is likely to be well received in the devastated region. This country well knows the comfort that people draw from the awareness that their plight is known around the world and help is readily provided. The Christchurch experience bears no comparison with the scale of Japan's quake but it will count for something in Sendai right now.

All of us living on the Pacific's "ring of fire" need to understand the forces under our feet and keep a sense of proportion, even amid the aftershocks. Stress of recent quakes' magnitude has been building for millenniums. Cities can be rebuilt in reasonable confidence the land will stay settled for a long time.