Japan: Immediate and longer-term effects of disaster

Resentment and anger need socialist expression

The human cost of the Kanto-Tohoku earthquake and tsunami will be immense. Nearly two weeks after the disaster struck, well over 9,000 are confirmed dead with nearly 20,000 missing. Police in the worst affected prefecture, Miyagi, expect the eventual death toll to reach over 15,000 in that prefecture alone.

The ‘Asahi’ newspaper estimates there are more than a third of a million people living in refugee centres as a result of evacuations, including because of the state of the nuclear power stations. Across the whole Tohoku area there are two million presently without electricity and probably a similar number without gas and water.

On top of this, the people of the Tohoku and Kanto face the danger of nuclear contamination. Already higher than legal levels of radioactivity have been found in water supplies, even in Tokyo, and in milk and spinach. The government is claiming that there is presently no major threat to health although many are sceptical about these claims and they are now advising people not to give tap water to children under 1 year old. Many cases of thyroid cancer after the Chernobyl disaster resulted from people drinking milk contaminated with radioactive isotopes.

What about those who have lost homes in the quake? The authorities are presently building “kasetsu jutaku” (prefabricated constructions) on school grounds and on public land. This is temporary accommodation though, that people cannot stay in it indefinitely. Earthquake insurance is expensive in Japan and very few people have it. In previous earthquakes such as the Hanshin earthquake of 1995, the government provided no compensation for people who lost their homes and possessions. Most people will have to pay to rebuild their homes by drawing from their savings or taking out fresh mortgages. Those who cannot afford this will probably receive little more than some kind of priority on what public housing is available maybe with a subsidised rent. (In Kobe they did give rent discounts to the poor.)

Government funds are likely to be used largely to rebuild the infrastructure of the affected areas. The end result, as in Kobe after the Hanshin ‘quake, may well be that the “rebuilding” results in the destruction of local communities, the pushing out of the poor and elderly and major commercial developments providing a windfall for the developers and major construction companies.

Socialists are opposed to the exploitation of the misery of the earthquake victims by these parasites. We call for the nationalisation under workers’ control and management of the general building contractors and major financial institutions, including insurance companies and banks. The rebuilding of the communities could then be democratically planned by committees of residents, community and workers’ organisations, with interest-free loans extended to those who need them to rebuild their homes.

Anger will mount

While there has generally been a mood of shock and a certain acceptance of having to cope with the situation, we are now beginning to see patience running out and anger being expressed. It is as yet mild, but it will spread.

The nuclear accident is definitely the biggest issue in Japan now and it looks as if it is going to drag on. There is talk of having to continue spraying water onto the reactors well into the Autumn. Tokyo fire-fighters have been told to work on the plant for periods that expose them to radiation over the legal safety limit. If they refused, they would be disciplined. (Unfortunately, it has not been the workers’ union that has exposed this scandal, but the deranged right-wing governor of Tokyo, Isihara. He had totally discredited himself earlier when he said the ‘quake was divine punishment for the egotism of the modern day Japanese.)

Many unions have been active in organising relief efforts. They have also held a press conference in Tokyo to protest about a statement from the Ministry of Labour and Welfare encouraging employers not to pay workers who are laid off in the present crisis. Under Japanese labour law, they should receive 60% of their wages. Earthquakes have generally been treated as something beyond the control of the company, but the majority of lay-offs during this crisis are the result of power cuts which could and should have been avoided.

It is widely known that mismanagement and government collusion with the power companies is to blame for not being able to cope with the disaster. The vice-president of the main one, TEPCO, actually went round some of the refugee centres apologising. But the governor of Fukushima, was reflecting the simmering, as yet unexpressed, anger of millions of people, refused to accept their apology after the banning was announced of the sale of milk and other produce, not only from Fukushima, but also neighbouring prefectures.

The minister who made the announcement also said the government saw the power company, TEPCO, legally liable for the losses farmers suffer as a result of the ban. The government is trying make clear the responsibility for the ban is TEPCO’s so that anger is turned against the company rather than them! It would not be a surprise to see them use a bank bail-out type tactic and step in to nationalise TEPCO. On their terms, this would then entail passing the bill on to the taxpayer – the workers and farmers of Japan.

The underlying anger and resentment amongst working and poor people in Japan at the way their fate is held in the hands of profiteers and corrupt politicians needs an expression. It could become a powerful force if harnessed by a genuine workers’ party that fights for a socialist alternative to the anarchic and dangerously unplanned way society and industry develops under capitalism. Nationalisation and democratic planning are the only logical way to provide for peoples needs.

A basic kind of cooperation and democratic decision-making are to be seen even in the schools and other buildings where hundreds of thousands of bereft Japanese people are housed at present. Representatives are chosen for the food rotas, assisting the old and the young, cleaning the premises etc.As always, it is working people with scant resources who are responding with the biggest sacrifices in terms of donations and offers of help. The world’s capitalists merely debate how much will be lost in profits and dividends through this massive human tragedy.

Effect on Japanese and world economy

It is not yet completely clear what the economic effect of the disaster will be. Although Sendai is a major city, the worst affected areas are predominantly agricultural and fishing communities. The three worst affected prefectures – Miyagi, Iwate and Fukushima – produce only about the same share of GDP as Hyogo, the prefecture worst affected by the 1995 Hanshin earthquake.

Nevertheless, the earthquake will have a substantial effect on the economy, at least in the short-term. It has hit important production networks supplying components to car and electronic companies. Production of lithium-ion batteries, a major component in computer notebooks and other mobile computing devices have been seriously affected. Power generation has been particularly hard hit with reports claiming that 11 nuclear and 21 thermal power plants have been shut down as a result of the quake.

According to the Economist Intelligence Unit, three of the nuclear power stations have been written off totally and will never work again. This amounts to 3% of power production and means Japan boosting its imports of oil and Liquefied Natural Gas to maintain power supplies, helping to push up prices (and profits) of these alternative fuels.

A World Bank report puts the total cost of the earthquake as up to $235bn. (Some estimates now say it could be $300billion; others a maximum of 5% of GDP.) They expect it to take between 3-6 months to restore the basic infrastructure of the area and, overall, expect it to shave 0.5% off economic growth this year. The Japanese economy actually contracted by 0.3% in the last quarter of 2010, even before the earthquake, so growth is likely to be negligible this year.

One paradoxical affect of the quake is to send the yen soaring to new highs. This is probably the result of speculators buying yen on the expectation that insurance pay-outs and Japanese companies repatriating funds will force the currency higher. The government is desperately trying to stop this by selling yen (as did the G7 with its unprecedented intervention). They fear Japanese exports being priced out of many markets. This will not only affect Japan. According to the World Bank Report, a quarter of long-term debt in the East Asia Pacific Region is denominated in yen. They estimate that a 1% rise in the yen will lead to a $250m rise in debt servicing. While China has only 8% of its debt denominated in yen, others such as Thailand have as much as 60%.

“It’s an ill wind that blows nobody any good” but sections of the Japanese bourgeois are licking their lips at the prospects of the profits to be made from rebuilding. Prime Minister Naoto Kan has held out the prospect that the rebuilding may eventually lead to a recovery of the Japanese economy, as people in the affected areas are forced to spend savings to replace their houses and possessions and the economy also benefits from increased government spending on infrastructure. To a certain extent this is what happened following the Hanshin earthquake in 1995.

Kan is talking in terms of a ‘New Deal.’ However, the crisis facing Japanese capitalism is much more severe than it was in 1995. In particular, government finances are in a much more desperate state. Having increased the amount workers have to pay for their pension, Kan and the Democratic Party government are now proposing an increase in the consumption tax, supposedly to shore up the pension system and welfare in a society with a rapidly ageing population. While they might verbally oppose it, in practice this policy is supported by all of the right-wing parties. Government expenditure on rebuilding has to come from somewhere. While it may give a boost to the economy, an increase in the consumption tax to pay for it will have the opposite effect.

Even before the earthquake, Japanese capitalism was facing a serious crisis. The government was already unpopular. Nothing it has done has increased people’s confidence in it or in any capitalist politicians. A coalition is not the answer. (See recent article).In the past, left parties have been able to make some headway but neither the small Social Democratic Party nor the Japanese Communist Party (which has reached nearly 10% support in the recent past) advocates an alternative to struggling Japanese capitalism.

The years of double digit growth rates and increased living standards are long gone. The declining power of Japanese capitalism on a world scale will usher in a new era of instability and class struggle at home as the ruling class attempts to make workers pay for the earthquake and nuclear disaster. The future will lead to a questioning of capitalism amongst workers and young people and a radicalisation in the Japanese labour movement.

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March 2011