Japan economy after the earthquake and tsunami - Research Paper Example

The purpose of this paper is to describe the economic effects of the March 11th earthquake on Japan. The earthquake devastated the infrastructure of Japan. There are over 500,000 people homeless as a consequence of the earthquake. The overall property damage exceeds $300 billion (Huffingtonpost). The effect of having so many people homeless has destabilized the nation in social and economic terms. Despite all the humanitarian help that has come from the global community the Japanese government is finding it hard to feed and provide shelter to so many people.

Due to the rising cost of petroleum and its derivative products is going more expensive than the $300 billion estimate to reconstruct Japan. A major problem that is hurting the economy of Japan is the damage that the earthquake caused to the power supply of the country. About ? of the electricity in Japan is produced by 4 nuclear reactors. The earthquake caused major damage to one of the plants. The nuclear accident in the Japanese Fukushima plant is considered the biggest nuclear accident since the 1986 Chernobyl disaster.

Due to the immediate danger that the nuclear facility pose to the population the nuclear electricity infrastructure of Japan has been offline. There is a shortage of electricity across Japan. The lack of electricity throughout the entire country has negatively impacted the industrial activity in Japan. Manufacturing companies have been forced to temporarily shut down operations. This is affecting the ability of the country to export goods. The working class of Japan is losing valuable income everyday which is hurting the well-being of Japanese families.

Another problem that companies are having in Japan is supply chain issues. The transportation system in Japan is in total chaos. The short term outlook for the Japanese economy is not too bright. The OECD had to recalculate the GDP growth forecast of Japan for 2011. The OECD GPD forecast for 2011 was lowered to 0.8% from the original metric of 1.7% (Euronews). There are major health concerns in Japan as a consequence of the earthquake. In the short term the quake caused injuries to thousands of people.

The health system of Japan has been overloaded with work due to the massive amount of people requiring medical treatment. Another issue of major concern for the people of Japan was the nuclear accident in the Fukushima plant. Radiation has been already released into the population. An early study on the situation claimed that the 5.5% of the Japanese population living within 200 square kilometers of the damaged Fukushima plant would develop cancer in the long term (Youtube). This figure implies that 400,000 people would develop cancer.

The only way to prevent such a horrible health forecast is to evacuate the entire area of 7.8 million inhabitants. Japan is still in a state of crisis six weeks after the earthquake. During the last month it is estimated that the Japanese economy has lost $297.8 billion (Theworldreporter). Even a strong economy such as Japan’s cannot sustain these types of losses in such a short period of time. There a strong concerns that the Japanese economy will enter into a recession. The global economy will be hurt if Japan goes into a recession because Japan is considered one of the 8 most powerful countries in the world.

Nobody could have image that such a strong earthquake would hit Japan. The people of Japan