August 5, 2011

After the great earthquake

On March 11, a magnitude 9.0 earthquake––said to be the fifth largest in the world since 1900––occurred off the northeastern (Tohoku) coast of Japan.

The earthquake generated a gigantic tsunami that struck the area and killed people in huge numbers. The Japanese National Police Agency has confirmed 15,401 deaths, with 8,146 people missing, as of June 9. Moreover, the earthquake and tsunami caused several nuclear accidents, most importantly the level 7 meltdowns at three reactors in the Fukushima I Nuclear Power Plant complex. Officially, the catastrophe has been designated as the Great Eastern Japan Earthquake.

Various international responses have been advanced in the aftermath of the earthquake in humanitarian, economic, and strategic dimensions. India looms large in all of these. I would like to examine their implications.

First must be mentioned the outpouring of international condolence and help. Japan received messages of condolence and offers of assistance from a range of international leaders. According to Japan’s foreign ministry, 116 countries and 28 international organizations have offered assistance to Japan, all of which have been accepted. The overwhelming good wishes and assistance have been greatly appreciated by the Japanese people and the praise above has warmed hearts and cheered many grief-stricken residents.

Second are economic implications, which present two main aspects. One acute issue is Japan’s supply chain. Japan accounts for roughly 10 percent of the world’s economic output. However, the combination of the earthquake, tsunami and reactor accident effects has disrupted Japan’s supply side because of wrecked and damaged factories in the affected areas.

The goods exported by Japan in 2010, mostly machinery and transport equipment including multilateral parts and components, were worth $470 billion. However, reduced figures this year seem to be unavoidable. For example, Japan’s seven automakers in the US have been affected severely. May sales figures had decreased 23 percent year-on-year mainly because of the short supply of parts. Another example is silicon wafers: the building blocks of computer chips. Japan produces about 60 percent of the world’s supply, but the shutdown of two factories by the earthquake removed a quarter of that global capacity.

Masaaki Shirakawa, the Governor of the Bank of Japan, predicted on April 23 that recovery of Japan’s supply chain would begin by around August. Earlier he had been optimistic enough to estimate the timing as June to July. Recovery appears to be brighter than expected, as shown by the Index of Business Conditions published by the Cabinet Office on June 24, which characterized conditions simply as “Improving.” The main factor contributing to improvements is the apparent rapid restoration of infrastructure. A typical example would be the case of the Tohoku Shinkansen, a high-speed rail line connecting Tokyo and northeastern Japan. It recommenced operations 49 days after the earthquake. Toyota Motor Corporation, which was affected severely by the tremor, has come back strongly by employing an additional 3000–4000 seasonal workers throughout Japan from July.

More important than the supply chain is an acute economic problem: atomic power generation. Nuclear power supplies 24 percent of the total power generated in Japan. The country has 54 reactors, of which 35 have suspended operations because of safety checks, thereby causing a power shortage in Japan. The Ministry of Economy, Trade and Industry (METI) has urged consumers of the Tokyo area and Tohoku who use more than 500 kW of electricity to cut consumption by 15 percent from last year’s levels between July 1 and September 22. Such an order is the first in 37 years: the last was issued in 1974 during the OPEC oil embargo.

Still the Japanese government has stuck to its guns in maintaining its nuclear policy. Banri Kaieda, the trade & industries minister, has pledged to do his utmost to return idled nuclear reactors back on line and has stated that nuclear power will remain a core energy source for Japan.

Tokyo Electric Power Company (TEPCO), the largest electric power company in Japan, which owns the reactors at the Fukushima plant, plans to adhere to its dependence on atomic energy. Its first annual shareholders’ meeting on June 28 concluded with a vote to continue using nuclear power for generation. Other electric power companies have adopted policies similar to TEPCO’s.

Why are the Japanese government and these companies adamant to promote nuclear energy as a primary electricity resource in defiance of growing public opposition? Simply put, Japan has few energy resources. Availability of oil and gas are unstable with fluctuating prices. Solar and other means of resources remain unreliable. These may prompt the move to maintenance and expansion of nuclear power reactor usage in Japan.

Another less obvious reason not to do away with nuclear reactors is related to public subsidies. Most Japanese people are unwilling to accept reactors because of the unforgettable experiences of atomic-bombing in Hiroshima and Nagasaki and reactor accidents at Chernobyl and other places. Nevertheless, the national government has poured huge subsidies into areas where nuclear plants would be constructed to pacify anti-reactor sentiment. Perhaps for that reason, areas chosen for nuclear plants are areas where local governments lack fiscal viability.

The subsidies encourage not only acceptance of a plant but also, over time, its expansion. Politicians benefit by such subsidies in terms of money and votes. In reality, nuclear plants are political power generators. For a country that is dependent on nuclear energy and subsidies, it is difficult to reverse course.

Aside from domestic factors, there are several reasons for Japan to be persistent in its pursuit of nuclear energy. Japan can be classified as a nuclear energy promoting country along with France, the United States, Russia, and Korea. These countries are users of nuclear energy and exporters of nuclear software and hardware. Since Fukushima, Switzerland, Germany, and Italy have ceased their reliance on nuclear energy. Promoting countries will never relax their vigilance against efforts by Japan to forgo and jettison its nuclear policy.

The IAEA—an international organisation with member countries said to be sharing the same bed with different dreams—initiated discussions designed at adopting new strict safety standards of nuclear reactors in June 2011 in Geneva. Fundamentally, promoting countries would like to realise strict standards upon which they might be able to expand their nuclear reactor-related exports.

According to Mike Weightman, head of the IAEA fact-finding team, “Japan’s response to the nuclear accident has been exemplary, particularly (as) illustrated by the dedicated, determined and expert staff working under exceptional conditions.” He pointed out that the greatest lesson learned by the international community from the Fukushima accident has been the spirit of the Japanese to face up to it. He cheered Japan in its maintenance of its nuclear-oriented energy policy and its decision not to abandon it.

The third implication of the Great Eastern Japan Earthquake is a strategic dimension. Among the countries which have shown the strongest concern is the United States. Washington wants Japan to resurrect itself in economic and security terms so that the latter can remain in its role as a counterbalance against China’s rise. The least desirable situation for the United States would be a weakened Japan, which would jeopardise its Asian policy.

At a Congressional hearing in may, all specialists giving testimony emphasised the importance of support and assistance of Japan in the backdrop of rising China. One speaker to the committee, Michael J Green, of the Center for Strategic and International Studies, testified “If we stand squarely with Japan it will make a difference in the months and years ahead-for Japan, for us and for the world.”

The US armed forces immediately implemented Operation Tomodachi (literally, Operation Friends) to assist and support Japan. Ten days after the disaster, 20 US naval ships, 140 aircraft, and 19,703 sailors and marines were involved in humanitarian assistance and disaster relief efforts in and around Tohoku with an estimated cost of $80 million.

China dispatched a rescue team to Japan and also evaluated Japan’s defense preparedness. One such evaluation found that military preparedness of Japan’s Self Defense Force would amount to 90 points out of 100 in a normal situation but 50 points in the case of its operations after an earthquake.

The humanitarian, economic and strategic dimensions mirror those of relations between Japan and India. India sent a rescue team of 46 personnel deployed at Rifu-cho in Miyagi prefecture, 365 km from Tokyo, along with rescue supplies. Miyagi was the worst affected prefecture in the March 11 tragedy, with more than 9,000 dead.

Among the economic dimensions, a bilateral nuclear co-operation agreement is the most important point because this agreement would become a pace-setter for similar agreements with other countries.

Japan and India started negotiations on a bilateral nuclear cooperation agreement in June 2010. India plans to produce 20,000 GW of nuclear power generating capacity by 2020 to meet planned cuts in gas emissions and to sustain industrial growth. India’s energy market is beckoning and many companies—including those partially or wholly owned by Japanese investors are working in close co-operation such as General Electric, Areva, and Westinghouse Electric—are responding.

Nevertheless, these companies cannot use Japanese technology in India without a bilateral nuclear deal and subsequent easing of Japan’s ban on the transfer of military-related technology. A particularly coveted cluster of such Japanese technologies belongs to Japan Steel Works, which claims 80 percent of the global market for large forged components for nuclear plants and which also produces steam generators and turbine shafts.

During Prime Minister Manmohan Singh’s visit to Tokyo in October 2010, a joint statement underscored the point that both officials welcomed the commencement of negotiations between the two countries on the agreement. They encouraged their negotiators to arrive at a mutually satisfactory agreement for civil nuclear cooperation at an early date.

Even after the Fukishima accident, both governments have remained determined to proceed with their nuclear policy. However, in the case of Japan, it is a hard choice. The nuclear agreement would signify Japan’s abandonment of a half century of anti-nuclear weapon advocacy, likely giving the impression that it prioritises economic interests at the cost of its highly moralistic cause. At the moment it appears that both governments intend to finalise the agreement.

Japan–India relations have been improving rapidly since 2005 when the Japanese and Indian prime ministers began alternating reciprocal visits. Building on the momentum created by the establishment of the Japan–India strategic partnership two years earlier, both governments issued a joint statement on security co-operation to mark Prime Minister Singh’s visit to Japan in 2008. In February 2011, the two governments indicated a further strengthening of relations by signing the Comprehensive Economic Partnership Agreement (CEPA), a major step in fostering closer economic ties.

This developing pattern closely dovetails with the growing realisation that Japan and India share many strategic concerns, including that of a rising China. Japan must contemplate the possibility of gradual dilution of the US–Japan alliance over the long term, while India must now chart a viable strategy that responds to present weaknesses and which can accommodate future greatness. In short, Tokyo and New Delhi see in the other a reliable partner on the economic, security, and strategic fronts at the moment. Nuclear co-operation might become one measure to fortify constructive efforts in such directions.

India has announced that “it was also agreed to establish an India–Japan–United States trilateral dialogue on regional and global issues of shared interest. These consultations, agreed to earlier by the US, will be conducted by the Foreign Ministries of the three countries.” Japan’s Sankei newspaper pointed out that the trilateral dialogue would deal with close sea-lane defense co-operation in the Indian Ocean among the three countries to restrain China’s growing presence there.

Japan has overcome exceedingly difficult situations twice in modern history. The first was during the Meiji period (1868–1911) when Japan radically metamorphosed from a feudal state into a modern state. The second, which occurred after Second World War, occurred when Japan lifted itself up to status as a country with a viable economy and democracy. Both challenges have been successful. Now is the third occasion. Japan’s ability to cope with disastrous situations is being tested.

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