On the 11th of March, at precisely 2:46 p.m., a 9.0 magnitude earthquake struck Japan leaving destruction in its path. The loss of lives and property are constantly rising even today. But probably one of the biggest blows to Japan was the crumbling of its economy. Questions arose of whether the 3rd largest economy in the world would be able to bounce back. With oil refineries, car manufacturing units and the electronic industry damaged, it is understandably hard to believe that Japan will be able to recover. What is worse is that because of the global financial crisis, interest rates are already at zero percent, and cutting taxes is not an option either. More information on how the quake has hit Japan’s economy can be found in the video here.
Analysts have proposed the solution of selling government bonds, but many economists think that this would be improbable. I would like to remind everyone of a similar earthquake that struck Japan in 1995. Kobe was left utterly devastated, with over 100 billion dollars in damages. Nevertheless, the resilience of the people of Japan surfaced and Kobe was rebuilt within five years. Today, there is almost no evidence that an earthquake hit Kobe. In my opinion, Japan will recover. Yes, it may take time, but it will prove the world wrong and do what it does best – stand up again.
Udit Hinduja is a student at New York University double majoring in Economics and Political Science. As a Program and Research intern with the SISGI Group his focus areas are education, poverty and economic development in Asia and South America.
