Thursday, April 07, 2011

Japan is Fucked Short Term Long Term

The potential for a collapse of a society is I think a very real threat. That great swathes of this comparatively small country are almost certain to become uninhabitable, its level of food production decimated and groundwater contaminated forever, cannot be underestimated or written off.

Add to these not insignificant woes, the future prospect of untold numbers of health related problems, the future does indeed look grim. And to be taken into consideration, the very real threats to Japan's manufacturing industries and potential loss of markets, it becomes increasingly difficult to see how Japan can perform as a functioning society.

The seemingly devil may care attitude by vast majority to what is actually happening in Japan reminds me of a story once told to me by a friend, John.

John and a colleague had occasion to conduct some business north of the border and found themselves on a domestic flight in a gale of wind, bound for one or other of the Scottish airports.

Both ex pilots, thoroughly aware of the conditions, the wind speed and direction, and not least the layout of the only runway that would be available to them, were, in their own words, shitting themselves. Strapped in with an eye on the nearest exit, all the while surrounded by fellows reading the Evening Standard and calling for ''just another gin Giovanni, before we land.''

But the difference between that flight and the situation at Fukushima is, that flight did eventually get down on the ground. Fukushima has been, and is likely to remain so for the foreseeable future, constantly on final approach.

Fukushima: A Nuclear Threat to Japan, the U.S. and the World
Japan Disaster Could Have Far-Reaching Consequences

It will take the equivalent of billions of dollars for the Japanese to recover from these disasters and the U.S. economy is closely linked to theirs. The Japanese government and Japanese investors comprise the second largest holders of U.S. Treasuries, at $885 billion. The Bank of Japan also is reported to hold $493 billion in its reserve balance to avert credit problems. Some financial observers have speculated that the earthquake and tsunami may force Japan's government and investors to liquidate much of the U.S. debt they hold. This possibility doesn't even consider that there is no transparency as to what plans exist for using these funds.

The wholesomeness of much of Japan's food supply has come under question. Farmers have been forced to destroy crops and dispose of dairy products. Because of continuing contamination of seawater, the healthfulness of seafood from the Pacific Ocean is in question. Japan is already a net food importer. In response to a continuing shortage of Japanese home-grown food, the Japanese government may encourage importation of even more foreign food, which is likely to increase the price of food in a nation where food is already an extremely expensive commodity. Worldwide, increased competition for food is likely to affect prices, causing some people in marginal economies to go hungry.

Japanese manufacturers are increasingly in competition with other Asian countries. With the domestic Japanese industrial base severely damaged by the earthquake, delivery of Japanese-manufactured products to the U.S. has been disrupted. Some U.S. plants using Japanese parts have been forced to slow down or halt production. They will probably recover when Japan begins exporting a full supply again, but in an already shaky economy, that could take months. If severe enough, the postponements could cause demand to disappear.

Some industries where Japan now has a predominant position are already threatened. Pre-Fukushima Japan produced a significant percentage of the world's supply of silicon wafers, the base on which integrated circuits and memory chips are made. Because of the earthquake, it has been estimated that wafer supply has diminished by 25 percent.

A shortage of silicon wafers is likely to cause the price to rise, thus increasing the price of chips worldwide, which would have impact on the price of all sorts of goods from jumbo jet airplanes to programmable coffee makers. Korean manufacturers said they would fill the void. If customers establish supply agreements with new manufacturers in Korea, return to their former suppliers in Japan will become even more difficult.

Japan is a culturally unified nation, with more than 98 percent of its population sharing the same ethnicity. It also is a nation where the social norm is to achieve consensus and conform to standards. Japanese people are careful about expressing dissent or participating in controversy. Yet, we are seeing increased, almost unprecedented criticism of TEPCO and the government beginning to be expressed. If this is possible in such a polite and restrained society, imagine the response to a similar disaster elsewhere.

Increasingly, reports of heroic workers, dubbed the Fukushima Fifty by the press, have made their way into Western news media. There may be as many as 1,000 workers who are sacrificing themselves to prevent additional damage and repair existing damage to the nuclear reactors. It is possible some of these workers have been exposed to so much radiation that their lives will be changed in unforeseeable ways. It is likely many of these workers will suffer the long-term effects of radiation exposure, including increased likelihood of leukemia within a few years and other cancers as much as a decade or more from now. DNA damage to workers could become apparent only when these workers have children.

Though the aftermath of Fukushima will be with us for decades, and perhaps generations, immediate attention to this matter is imperative to save lives, provide knowledge that will avert a similar disaster elsewhere, and minimize domestic and worldwide economic impact.

After almost a month, there continue to be more questions than answers. There has been marginal success in cooling the at-risk reactors and little success stemming the flow of radioactive waste water. We have no credible estimate of the impact this disaster will have on the Japanese economy in particular or the world economy in general. There have been no credible steps in the U.S. or by the International Atomic Energy Agency to begin learning from this event and its aftermath and to apply those lessons to avert or minimize future tragedies.

The Japanese authorities, with the help of other experts, will have to muddle through this disaster, making up solutions as they go along. Hopefully, the damaged reactors will be brought under control before serious permanent harm is inflicted on national and international resources. more page 3

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