In Japan, the same old problems

TOKYO — Mega-disasters like Japan’s earthquake-tsunami are deadly and dramatic, but economists who study them are in near-total agreement: They don't cause much long-term economic damage, particularly in developed countries.

But in Japan, that rosy outlook comes with a caveat. A full recovery would leave Japan merely with the same gloomy economy it had in the first place, well before the northern coastline was flattened on March 11.

Macroeconomists who have studied big disasters around the world over the past decade have found that major economies are generally strong enough to perform a repair job. And in this case, the disaster spread across hundreds of miles, but it didn’t strike an economic center; the battered Tohoku region accounted for just 2.5 percent of Japan’s economic output.

But the world’s third-largest economy must now perform two repair jobs at once, reconstructing a coastline while also grappling with a shriveling population, a growing social-welfare burden and a massive sovereign debt. This latest disaster elongated the list of problems for an economy that already had too many.

“The economy’s long-term trend, fundamentally, doesn’t change,” said Kazumasa Oguro, a macroeconomist at Tokyo’s Hitotsubashi University.

But then Oguro added, “the basic trend before this was deterioration.”

Researchers who study disasters describe a two-step economic impact, with a short-term blow that is followed by a quick, neutralizing wave of private investment, new jobs and government spending.

That’s the pattern Japan saw when a 6.9-magnitude earthquake struck Kobe in January 1995. The industrial port city lost 6,400 people. Some 100,000 buildings collapsed. The country’s economy grew 1.9 percent that year, and in less than 1 1 / 2 years, Kobe’s industrial production had nearly returned to normal.

In the two months since the March double-disaster and nuclear emergency, Japan has endured only the first economic aftereffect, crystallized last week when the government announced that, between January and March, its economy contracted at a 3.7 percent annualized rate. That second consecutive quarter of shrinkage tipped Japan into a recession.

The news doubled as a shorthand for all that had happened since the earthquake. Some 200,000 jobs were lost as a result of evacuation and building destruction, according to one research firm. Toyota suspended all domestic production until April 17 and is now operating at just 50 percent of usual levels. Concerned about Japan’s disaster-vulnerable supply chain, some companies, such as Nippon Steel, drew up plans to expand operations overseas.

The country also faces long-term energy shortages resulting from the damaged Fukushima Daiichi plant and other shuttered nuclear plants. Forced blackouts appear unlikely, but businesses are being asked to conserve energy. To avoid peak electricity times, some automakers plan this summer to close their factories on Thursdays and Fridays — and keep them open on Saturdays and Sundays.

As reconstruction money flows into the disaster region, though, economists expect Japan to experience a period of growth, beginning in the third quarter. Japan’s economy minister, Kaoru Yosano, called the recession a “temporary phenomenon” and predicted that the economy will still expand 1 percent this year.

Japan disaster death toll nears 14,000

Tokyo (CNN) -- The death toll from Japan's earthquake and tsunami rose to nearly 14,000 on Monday as efforts continued to stabilize a crippled nuclear reactor plant.

Another 14,030 people are missing, according to Japan's National Police Agency. Police and soldiers still are combing the ruins of coastal villages in search of more bodies.

The March 11 magnitude 9.0-earthquake and the tsunami it spawned have killed 13,843 and displaced more than 136,000 people, police said Monday.

The tsunami also caused an ongoing crisis at a nuclear power plant that workers continue to fight.

On Monday, safety officials said that remote-controlled robots and the workers controlling them have recorded high levels of radiation inside and around two reactor buildings at the Fukushima Daiichi nuclear power plant in northern Japan. The tsunami damaged the plant's cooling systems, unnerving hundreds of thousands of people.

The U.S.-built robot probes measured radiation doses as high as 57 millisieverts inside the housing for reactor No. 3 and up to 49 millisieverts inside the No. 1 reactor building, Japan's Nuclear and Industrial Safety Agency reported.

Levels found between the double doors of the airlocks of the reactor buildings were much higher -- 270 millisieverts in the case of reactor No. 1 and 170 millsieverts in No. 3, the agency said.

By comparison, the average resident of an industrialized country receives a dose of about 3 millisieverts per year. Emergency standards for plant workers battling the month-old nuclear disaster limit their annual exposure to 250 millisieverts, while a CT scan produces just under 7 and a chest X-ray delivers a one-time dose of about .05 millisieverts.

Doses above 100 millisieverts can increase the long-term risk of cancer, while 1,000 millisieverts can produce radiation sickness.

There was no immediate explanation for the much-higher radiation levels recorded in the airlocks, said Hidehiko Nishiyama, the safety agency's chief spokesman.

The robots were inserted Sunday in an attempt to determine the conditions inside the No. 1 and 3 reactor buildings, which were blown apart in massive hydrogen explosions in the first days of the worst nuclear accident since Chernobyl. The cooling systems for Fukushima Daiichi reactors 1-3 were knocked out by the tsunami that struck northern Japan, causing the reactor cores to overheat, spewing huge amounts of radioactive contamination across the surrounding area.

Nishiyama said running the "Packbots" in reactor No. 3 was difficult because of the amount of debris scattered around the building, but engineers found the building was dry and the temperatures were normal. In unit 1, the robot found a high level of humidity, the explanation for which was not known Monday night.

The robots were inserted the same day that the plant's owner, the Tokyo Electric Power Co., announced a six- to nine-month plan to restore normal cooling systems and shut down the damaged reactors at Fukushima Daiichi. Japan's government has designated the situation a top-scale nuclear disaster.

Nishiyama said he did not know whether the data recorded Sunday would affect the timetable laid out by Tokyo Electric, which had been under pressure to lay out a timetable to resolve the crisis.

No data has yet been reported from the No. 2 reactor, which is believed to be leaking an undetermined portion of the 6-7 cubic meters (1,600-1,800 gallons) of fresh water being pumped into it every day. The plan laid out Sunday would bring an end to that improvised solution, which has left workers scrambling to find places to contain the vast amounts of contaminated water that have flooded the basements of the units.

In Tokyo, meanwhile, Japan's government took a step toward slowing what critics have called a revolving door between the nuclear industry and the ministry that regulates it. Chief Cabinet Secretary Yukio Edano said the government is urging officials of the Ministry of the Economy, Trade and Industry to stop taking jobs with companies that run nuclear plants upon retirement.

"I have consulted with METI and decided to request that government officials to voluntarily refrain from seeking re-employment at electricity companies, and asked electricity companies for their cooperation," Edano told reporters. But he said the ruling Democratic Party of Japan lacks the votes in parliament to make his call a law at this point.

Critics say the practice -- known in Japanese as amakudari, or "descent from heaven" -- creates cozy ties between the government and the nuclear industry at the expense of the public interest. Edano's declaration was "a necessary step but it's not enough," said Tetsunari Iida, a former nuclear engineer who now runs an alternative energy think-tank.

Tokyo Electric is one of the companies that has come under fire for the practice. Company spokesman Hiro Hasegawa told CNN that the company tries to keep some "distance" between itself and the government, but added, "The nuclear industry is a group of specialists. We cannot deny there is close communication."

And Eisaku Sato, a former governor of Fukushima prefecture and a longtime critic of Japan's largest utility, said the nuclear safety agency should be independent and the government needs "to create a sense of safety built on trust."

"This is a test of Japanese democracy," said Sato, who has been battling corruption charges he says are retribution for his criticism of the industry. "We must make a flawless framework for operating Japan's nuclear power plants, one that the people of the world can feel safe about."

Sato told reporters Monday that Tokyo Electric missed a warning signal at the plant less than a year ago. He said emergency generators failed to start when a power failure in June 2010 cut off cooling systems at reactor No. 2, forcing workers to start the diesel-powered backups manually.

Hasegawa disputed that account, telling CNN that emergency generators kicked in automatically and the reactor shut down. Water levels dropped in the reactor for a brief period, forcing the company to declare the incident to the government, but he said no radiation was released.

An investigation later determined that power was cut off by accident when workers for a subcontractor were installing temperature gauges in a cramped space. No disciplinary actions were taken against anyone at the plant, Hasegawa said.

Japan disaster likely to be world's costliest

TOKYO – Japan's government said the cost of the earthquake and tsunami that devastated the northeast could reach $309 billion, making it the world's most expensive natural disaster on record.

The extensive damage to housing, roads, utilities and businesses across seven prefectures has resulted in direct losses of between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion), according to a Cabinet Office estimate Wednesday.

The losses figure is considerably higher than other estimates. The World Bank on Monday said damage might reach $235 billion. Investment bank Goldman Sachs had estimated quake damage would be as much as $200 billion.

If the government's projection proves correct, it would top the losses from Hurricane Katrina. The 2005 megastorm that ravaged New Orleans and the surrounding region cost $125 billion, according to the Insurance Information Institute.

Japan's estimate does not include the impact of power shortages triggered by damage to a nuclear power plant, so the overall economic impact could be even higher. It also leaves out potential global repercussions.

"The aftermath of the tragic events in Japan will obviously alter the domestic economy," said Takuji Aida, an economist at UBS Securities Japan, in a report. "However, Japan's position in the global economy is such that there must also be some transmission of the shock to other parts of the world."

The Cabinet Office suggested, however, that the economic hit could be softened by the expected upswing in public works and construction as the region rebuilds.

The 9.0-magnitude quake and tsunami on March 11 laid waste to Japan's northeastern coast, killing thousands of people and triggering a crisis at a nuclear power plant. Tens of thousands of people living near the plant were evacuated.

Utilities have imposed power rationing, many factories remain closed and key rail lines are impassable.

Toyota Motor Corp., the world's No. 1 automaker, has halted auto production since March 14 because of difficulty securing components, including rubber parts and electronics. By Sunday its lost production will reach 140,000 cars.

The company said Wednesday it will delay the launch of the Prius hybrid minivan in Japan due to disruptions in parts supplies.

Toyota spokesman Paul Nolasco said the automaker initially planned to roll out the Prius minivan in April. But the disaster has crippled suppliers and destroyed shops, forcing Toyota to postpone the launch.

Another Cabinet Office economic report released Wednesday underscored the new challenges facing Japan, which had been on the mend from a lull in growth late last year.

"The economy is moving toward recovery, but its self-sustainability is weak," it said.

More broadly, the Japanese economy has been lackluster for two decades, barely managing to eke out weak growth between slowdowns. It lost its position as world's No. 2 economy to China last year and is saddled with a massive public debt that, at 200 percent of GDP, is the biggest among industrialized nations.

The government plans to introduce a supplementary budget to tackle reconstruction, though Cabinet members have said additional budgets will probably be needed down the road.

Speaking to the upper house budget committee Tuesday, Finance Minister Yoshihiko Noda said the country's deteriorating public finances will not deter the government from reconstruction spending, according to Kyodo news agency.

Cabinet Office spokesman Noriyuki Shikata expressed confidence that the country could handle the massive task that lies ahead.

"This is not something that the Japanese economy cannot overcome," he told reporters Wednesday.

The government also reportedly plans to inject public money into banks to help support lending as companies rebuild. It may finance that from a fund of 11 trillion yen ($135 billion) that is still available under a law on emergency support to banks passed after the 2008 collapse of Lehman Brothers.

Japan official: Disasters overwhelmed government

TOKYO – The Japanese government acknowledged Friday that it was overwhelmed by the scale of last week's twin natural disasters, slowing the response to the nuclear crisis that was triggered by the earthquake and tsunami that left at least 10,000 people dead.

The admission came as Japan welcomed U.S. help in stabilizing its overheated, radiation-leaking nuclear complex, and reclassified the rating of the nuclear accident from Level 4 to Level 5 on a seven-level international scale, putting it on a par with the 1979 Three Mile Island accident.

Nuclear experts have been saying for days that Japan was underplaying the severity of the nuclear crisis, which later Friday the prime minister called "very grave."

The International Nuclear Event Scale defines a Level 4 incident as having local consequences and a Level 5 as having wider consequences.

Hidehiko Nishiyama of Japan's nuclear safety agency said the rating was raised when officials realized that at least 3 percent of the fuel in three of the reactors at the Fukushima Dai-ichi plant had been severely damaged, suggesting those reactor cores have partially melted down and thrown radioactivity into the environment.

"The unprecedented scale of the earthquake and tsunami that struck Japan, frankly speaking, were among many things that happened that had not been anticipated under our disaster management contingency plans," said Chief Cabinet Secretary Yukio Edano, admitting that information had not been shared quickly enough.

"In hindsight, we could have moved a little quicker in assessing the situation and coordinating all that information and provided it faster," he said.

Later, Prime Minister Naoto Kan urged the nation to unite.

"We will rebuild Japan from scratch. We must all share this resolve," he said in a nationally televised address, calling the crises a "great test for the Japanese people."

At the stricken complex, military fire trucks sprayed the reactor units for a second day, with tons of water arcing over the facility in desperate attempts to prevent the fuel from overheating and spewing dangerous levels of radiation.

"The whole world, not just Japan, is depending on them," Tokyo office worker Norie Igarashi, 44, said of the emergency teams working amid heightened radiation levels at the complex.

[Related: What is acute radiation syndrome?]

Last week's 9.0 quake and tsunami set off the nuclear problems by knocking out power to cooling systems at the Fukushima plant on the northeast coast. Since then, four of its six reactor units have seen fires, explosions or partial meltdowns.

The unfolding crises have led to power shortages in Japan, forced factories to close, sent shockwaves through global manufacturing and triggered a plunge in Japanese stock prices.

"We see it as an extremely serious accident," Yukiya Amano, the head of the U.N.'s International Atomic Energy Agency, told reporters Friday in Tokyo. "This is not something that just Japan should deal with, and people of the entire world should cooperate with Japan and the people in the disaster areas."

"I think they are racing against the clock," he said of the efforts to cool the complex.

One week after the twin disasters — which has officially left more than 6,900 dead and more than 10,700 missing — emergency crews are facing two challenges in the nuclear crisis: cooling the reactors where energy is generated, and cooling the adjacent pools where used nuclear fuel rods are stored in water.

Both need water to stop their uranium from heating up and emitting radiation, but with radiation levels inside the complex already limiting where workers can go and how long they can remain, it's been difficult to get enough water inside.

Water in at least one fuel pool — in the complex's Unit 3 — is believed to be dangerously low. Without enough water, the rods may heat further and spew out radiation.

"Dealing with Unit 3 is our utmost priority," Edano told reporters.

Edano said Tokyo is asking the U.S. government for help and that the two are discussing the specifics. "We are coordinating with the U.S. government as to what the U.S. can provide and what people really need," Edano said.

[Related: Carriers offering free calls to Japan]

While Tokyo quickly welcomed international help for the natural disasters, the government initially balked at assistance with the nuclear crisis. That reluctance softened as the problems at Fukushima multiplied. Washington says its technical experts are now exchanging information with officials from Tokyo Electric Power Co., which owns the plant, and with government agencies.

A U.S. military fire truck was also used to help spray water into Unit 3, according to air force Chief of Staff Shigeru Iwasaki, though the vehicle was apparently driven by Japanese workers.

The U.S. vehicle was used alongside six Japanese military fire trucks normally used to extinguish fires at plane crashes.

The fire trucks allowed emergency workers to stay a relatively safe distance from the radiation, firing the water with high-pressure cannons. The firefighters also are able to direct the cannons from inside the vehicle.

Officials shared few details about Friday's operation, which lasted nearly 40 minutes, though Iwasaki said he believed some water had reached its target.

The U.S. has also now conducted overflights of the reactor site, strapping sophisticated pods onto aircraft to measure airborne radiation, U.S. officials said. Two tests conducted Thursday gave readings that U.S. Deputy Energy Secretary Daniel B. Poneman said reinforced the U.S. recommendation that people keep away from a 50-mile (80-kilometer) radius around the Fukushima plant.

Tsunami survivors observed a minute of silence Friday afternoon to mark one week since the quake, which struck at 2:46 p.m. on March 11. Many were bundled up against the cold in the disaster zone, pressing their hands together in prayer.

Low levels of radiation have been detected well beyond Tokyo, which is 140 miles (220 kilometers) south of the plant, but hazardous levels have been limited to the plant itself. Still, the crisis has forced thousands to evacuate and drained Tokyo's normally vibrant streets of life, its residents either leaving town or hunkering down in their homes.

The Japanese government has been slow in releasing information on the crisis, even as the troubles have multiplied. In a country where the nuclear industry has a long history of hiding its safety problems, this has left many people, in Japan and among governments overseas, confused and anxious.

After meeting with Kan and other senior officials, the U.N.'s Amano complained that his agency had not been receiving critical information. He said, for instance, the IAEA wanted to know what kind of radioactive elements were being released but could not get the data.

"This kind of information is needed in a timely way, and we hope the Japanese government will provide it. We hope everything will be better," Amano told reporters.

At times, Japan and the U.S. — two very close allies — have offered starkly differing assessments over the dangers at Fukushima. U.S. Nuclear Regulatory Commission Chairman Gregory Jazcko said Thursday that it could take days and "possibly weeks" to get the complex under control. He defended the U.S. decision to recommend a 50-mile (80-kilometer) evacuation zone for its citizens, wider than the 12-mile (20-kilometer) band Japan has ordered.

Crucial to the effort to regain control over the Fukushima plant is laying a new power line to the plant, allowing operators to restore cooling systems. The operator, Tokyo Electric Power Co., missed a deadline late Thursday but hoped to completed the effort late Friday, said nuclear safety agency spokesman Minoru Ohgoda.

But even once the power is reconnected, it was not clear if the cooling systems were intact and will still work.

Workers were completing laying cables around Units 1 and 2 on Friday, a power company official said, and hoped to reach more units Saturday. Even so, experts will have to check for anything volatile to avoid an explosion when the electricity is turned on.

"There may be sparks, so I can't deny the risk," said Teruaki Kobayashi.

President Barack Obama assured Americans that officials do not expect harmful amounts of radiation to reach the U.S. or its territories. He also said the U.S. was offering Japan any help it could provide.

Police said more than 452,000 people made homeless by the quake and tsunami were staying in schools and other shelters, as supplies of fuel, medicine and other necessities ran short. Both victims and aid workers appealed for more help, as the chances of finding more survivors dwindled.

About 343,000 Japanese households still do not have electricity, and about 1 million have no water.

At the Fukushima plant, a core team of 180 emergency workers has been rotating out of the complex to minimize radiation exposure.

The storage pools need a constant source of cooling water. Even when removed from reactors, uranium rods are still extremely hot and must be cooled for months, possibly longer, to prevent them from heating up again and emitting radioactivity.

The actions authorities are taking to cool the reactors are the best ones available, experts say. Eventually, the plant may be entombed in concrete, as was done hastily after the 1986 Chernobyl reactor accident.

But pressures and temperatures must be controlled before then, said Mario V. Bonaca, an adviser to the U.S. Nuclear Regulatory Commission. Otherwise, he said, overheated nuclear fuel will melt or burst through the sand, cement or other covering and release more radiation.

Touching reunion videos after Japan disaster

There's not much good news in the wake of last week's devastating 9.0 earthquake in Japan. So far, the disaster may have left as many as 10,000 dead and half a million homeless, as well as sparking a nuclear crisis that is still unfolding. But amid the tragedy, some tsunami and earthquake victims have--against the odds--reunited with their loved ones and shared their incredible tales of survival.

Akiko Kosaka, who was studying English in California, had all but given up hope of hearing that her family had survived in the coastal village of Minami Sanriku. Nearly half the town's inhabitants are missing or feared dead.

After a friend tipped her off, Kosaka found a YouTube video of local news coverage that shows her older sister wearing a hard hat and calling out to the cameras to let her little sister in America know that the family has survived, Kosaka told CNN. The video shows that the houses next to her family home have been destroyed, making the family's survival all the more miraculous. You can watch her story, and other moving reunion vidoes, below.

CNN has translated NHK video showing a slew of reunions three days after the quake first hit. One man speaks to his wife over the phone and hears for the first time that she has survived. Another man searches for the employees in his now-destroyed sake factory, and finally reuintes with one.



"I didn't think they survived," she told CNN. "I cried for three days--Friday, Saturday, Sunday." Kosaka is now trying to let them know she's received their message through a video she uploaded.



Meanwhile, the Wall Street Journal has documented an elderly couple's journey to a small coastal town devastated by the tsunami to see if they could find their daughter and three grandchildren living there. You can watch their reunion below:




The photo, below, shows a Japanese soldier right after he discovered a four-month-old baby in the rubble in the village of Ishinomaki. The soldiers somehow managed to locate the baby's father, who thought his baby had washed away with the tsunami's waves, and reunite them. "Her discovery has put a new energy into the search," a civil defence official told The Daily Mail. "We will listen, look and dig with even more diligence after this."