Earthquakes in Japanese Economic History

Situated at the confluence of four tectonic plates, the islands of Japan is subject to a high level of seismic activity. Large scale earthquakes has historically occurred in fifty-year cycles with the most recent Tōhoku earthquake of 11th March 2011 also being the largest on record, measuring a magnitude of 9 Mw. Until the unfolding of the last few days devastating events, the most deadly earthquake since 1960 took place 20 kilometres outside Kobe 17th January 1995. Measuring 6.8 Mw it took 6,434 lives  and caused an estimated $102.5 billion worth of material damages, 2.5% of Japan’s contemporary GDP.  Although not being of a relatively large magnitude, its proximity to a urban area magnified its destructive potential.

Japanese Earthquake Magnitudes vs GDP/Capita Development Y-o-Y (%) 1960-2011

A rough comparison of Japanese GDP/Capita development and historical seismic activity reveals the predictably negative effect earthquakes have on the Japanese economy. With the 2011 tremor being on an unprecedented magnitude of 9 Mw, causing a devastating tsunami which laid North-East Japan’s coastline destroyed, killing upwards of 10,000 people and included damage to several nuclear reactors which again is likely to cause severe environmental damage. As such the 2011 earthquake will also be unprecedented in human, ecological and material cost.

Current preliminary estimates range to upwards of $200 billion, however quantifying such massive disasters is a virtually impossible task. It is however clear that Japan needs the global community’s help, humanitarian and economic in order to see it through this terrible ordeal. In lies not in the proud and mild mannered Japanese nature to accept assistance, but then one must insist for it is in the best interest of us all to overcome this apocalyptic vision as soon as possible.

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About J.F. Gjersø

PhD in International History, LSE. http://etheses.lse.ac.uk/3202/
This entry was posted in Contemporary History, Economic History and tagged , , . Bookmark the permalink.

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