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In-depth Japan in the Post–3/11 Era: The Road to Rebirth
Earthquakes and the Economy
Historical Perspectives

Takemori Shunpei [Profile]


The question on many minds today is what economic ramifications the March 11 earthquake and tsunami will have. This article explores this issue by looking back on the major earthquake the country experienced in 1923 and again in 1995, and considering the impact of those earlier disasters on Japan’s economy.

The Buddhist temple Murōji in the mountains of Nara Prefecture, known for its beautiful five-storied pagoda. The structure was damaged in 1998 by a typhoon, but repaired in 2000.

Let me begin this article by introducing a wonderful place in Japan. Adherents of the esoteric Buddhism (mikkyō) that arose in Japan some 1,200 years ago, during the Heian period (794–1185), went to the mountains in their quest for the divine. The temples they built are to be found deep in the hills, far removed from human habitation. So visiting these temples means heading to the hills, just as is the case with the Romanesque churches of Europe.

The most beautiful of the esoteric Buddhist temples is Murōji, located in the Uda Mountains at a considerable distance to the south of Nara. After walking for about two hours from the nearest train station through the forested hills, suddenly the prospect opens up, and the temple comes into view, its grounds covering an entire mountain. The sight is so splendid that it makes one think the temple was built here deep in the mountains in order to impress visitors with its appearance. The temple houses a statue of the Buddha that was designated as a National Treasure in 1951. Statues of the Buddha made during the Nara period (710–94) were put together using multiple layers of lacquer, but this one was carved from a single piece of wood. It is a first-rate work of art in terms of elegance, size, and majesty; the carving clearly reveals the grain of the wood, and the statue as a whole, with its low center of gravity, evokes a feeling of substance and dignity.

The Great Jōgan Tsunami

As I started to write about the March 11 Great East Japan Earthquake, my thoughts turned to the statue of the Buddha at Murōji. I happened to remember that the period when it was made was the Jōgan era (859–77). After the March 11 earthquake, which struck off the eastern coast of northern Honshū, the newspapers contained many references to this era, because it was when a quake of similar scale, at least 8.3 in magnitude, struck the same area of the Pacific Ocean and similarly caused a huge tsunami. This fact came to light in 1990. The Asahi Shimbun carried an interesting story on the background to this discovery and its subsequent impact in its evening edition on June 22:

The Onagawa Nuclear Power Station just escaped being directly hit by the March 11 tsunami by 80 centimeters.

“The fields and roads all turned into a blue sea… a thousand people drowned.” So it is written in the Nihon sandai jitsuroku [Veritable Record of Three Generations of Emperors of Japan] concerning the Jōgan tsunami of 869, which has come into the limelight in connection with the recent tsunami. The physical traces of this earlier disaster were first confirmed in a geological survey in 1990, which revealed that the Sendai Plain was inundated to a distance of three to four kilometers inland, confirming that the record in the above document seems to be basically factual. The findings were published in a paper by a team at the construction office of the Onagawa Nuclear Power Station operated by Tōhoku Electric Power Co. in Onagawa, Miyagi Prefecture. According to one member of the team, Chigama Akira, deputy head of the planning department, this was part of the surveying conducted to apply for a permit to install a second unit at the Onagawa plant.

On the basis of a survey of historical documents conducted in 1970, when Tōhoku Electric applied for permission to put up the first unit, it was assumed that the [maximum] height of a tsunami would be 3 meters. After that, according to Chigama, because there were advances in the techniques for surveying old earthquakes, they conducted [further] surveys and research, including excavation to search for traces of the Jōgan tsunami. As a result, the tsunami height assumption was increased to 9.1 meters. From the time of the construction of the first unit, though the assumed height was 3 meters, the plant was put at an elevation of 14.8 meters on the basis of a “comprehensive judgment,” which proved its worth this year. The land on which the Onagawa plant stands subsided by 1 meter as a result of the March 11 earthquake, and the tsunami that struck there was 13 meters high. The plant avoided being directly hit by a margin of 80 centimeters.

The series of accidents that occurred at the Fukushima Daiichi Nuclear Power Plant operated by Tokyo Electric Power Co. (TEPCO) following the great tsunami has developed into a disaster on a level comparable to the Chernobyl accident, the worst nuclear plant disaster in history. The above article indicates what was missing from TEPCO’s safety planning. It might have been possible to avoid this disaster if, like Tōhoku Electric, TEPCO had taken the trouble to conduct careful archeological studies, assumed a worst-case scenario for earthquakes and tsunamis, and prepared for such a scenario.

Shots of the higher than expected tsunami sweeping over the wall protecting the Fukushima Daiichi Nuclear Power Station on March 11. (Photo: TEPCO)

Problematic Assumptions

In the wake of the March 11 disaster, the term sōtei-gai, meaning “unforeseen” or “beyond what was assumed possible,” has come into frequent use. People in positions of responsibility have repeatedly used it in order to avoid blame for what happened. But the real problem lies in the nature of the assumptions used. According to a 2007 government report, Japan, which covers a mere 0.25% of the world’s total area, experienced 21% of the earthquakes of magnitude 6 or above during the previous 10 years. Everybody knows that earthquakes may happen. The problem is their scale. To forecast how big an earthquake might strike, it was necessary to look back in time by examining the historical evidence, as the people at Tōhoku Electric did.

How far back should one go? Let us consider an example. Some 640,000 years ago, a volcano located in what is now Yellowstone National Park in the United States erupted, spewing a volume of smoke said to be 1,000 times greater than that from the 1980 eruption of Mount St. Helens, the largest volcanic eruption of recent years. Geologists believe that a similar eruption could occur even now, spewing debris and ash to a height of 1 meter across half of North America. In the case of economic forecasts, data from 100 years ago is not much use, because the structure of the economy changes rapidly with time. But when forecasting natural phenomena, data not just from 100 years ago but even from 1 million years ago can be of great value.

The Jōgan era was a time of numerous calamities in Japan. In addition to the earthquake and tsunami, plague struck, and Mount Fuji erupted. It was during this era that the culture of esoteric Buddhism flowered and the sublimely beautiful statue of the Buddha at Murōji was created. The Japanese are an interesting people.

  • [2011.10.03]

Professor at Keiō University. Born in Tokyo in 1956. Graduated from Keiō University in 1981, where he majored in economics. After completing his doctoral studies at Keiō in 1986, received his PhD in economics from the University of Rochester in 1989. Has been an associate professor at Keiō. Author of Keizai kiki wa kokonotsu no kao o motsu (Economic Crisis Has Nine Faces), Sekai o kaeta kin’yū kiki (The Financial Crisis That Has Changed the World), Keizai ronsen wa yomigaeru (The Revival of Economic Debate; winner of the Yomiuri–Yoshino Sakuzō Prize), and other works.

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Other articles in this report
  • A Land Awash in DespairFour months on from March 11, journalist Kikuchi Masanori visited areas of Tōhoku devastated by the earthquake and tsunami that struck on that day. Meeting with residents and local leaders, he finds that they are desperate to bounce back from the tragedy and rebuild their lives.
  • Crisis Management in the Aftermath of 3/11Kobe 1995 and Tōhoku 2011 were both earthquake disasters, but the first saw most deaths from fires and collapsed homes, while the second was a complex disaster involving a tsunami and nuclear power plant meltdowns. Former director of the Cabinet Intelligence and Research Office Ōmori Yoshio considers Japan’s crisis management in the light of these two events.
  • “Emergent Destruction” and Japan’s RevivalJapan now faces the challenge of recovering from the worst natural disaster it has experienced since World War II. But the country needs to do more than simply rebuild the areas hit hardest by the March 11 earthquake and tsunami, argues Professor Yonekura Seiichirō. In this article he critiques the status quo and outlines a vision for a new nuclear-power-free, low-carbon Japan.
  • The Sorry State of Japan’s Public FinancesJapan’s public finances had already taken a turn for the worse before the March 11 earthquake, but the situation is likely to become even direr as a result of the disaster. Nariai Osamu, a professor and former government official, considers whether Japan can sort out its fiscal mess while paying for its recovery.
  • Six-Month Timeline Since the Great East Japan EarthquakeOn March 11, 2011 a massive earthquake and tsunami struck the northeast of Japan. While the people of Japan responded calmly to the disaster and private-sector companies were quick to take part in recovery efforts, the government and the Tokyo Electric Power Company (TEPCO) were widely criticized for a sluggish and ineffective response. This timeline looks back on the half year since the disaster, with a focus on the government response to the nuclear disaster.

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