 Good evening everyone. Please take your seats. We are ready to begin the program. I am Joseph Booth, Executive Director of the Stevenson Disaster Management Institute at the Louisiana State University. Thank you for joining us tonight for a compelling and timely discussion of the fiscal, economic, and social challenges for Japan in the aftermath of the Tohoku earthquake. I want to commend the Center for Strategic and International Studies on the tremendous effort they put forth in bringing this program and panel of experts together tonight so quickly. This program is the fourth in a series entitled the CSIS LSU series on Disaster Management and Emergency Response. I would also like to thank Ms. Lori Bertman of the Pennington Family Foundation for their support of this series and for making this possible. We've all been saddened to watch the media reports of the unfolding events in Japan following the tragic Tohoku earthquake and tsunami. Our thoughts and prayers are with our Japanese friends. In the aftermath of one of the most complex and natural environmental disasters of our lifetime, we struggle to understand the dynamic interconnections between the diverse hazards and the ramifications. We are hopeful that even in this early stage, the setting of priorities now will set the stage for rapid recovery for the ultimate reconstruction of Japan. As a veteran of numerous disasters which struck Louisiana, I saw firsthand how devastation in one area can have the cascading effect of causing consequences over a much larger venue. I also observed that quick and decisive action can mitigate consequences and initiate an effective recovery. But more importantly, it is preparedness both as a practice and as a cultural ethic which determines the final outcome. Japan is perhaps the most prepared of all nations against the threat of earthquake and tsunami. Even so, Japan faces enormous challenges in her recovery. And this is the focus of tonight's panel. Your moderator for this panel is Michael J. Green, Senior Advisor and Japan Chair of CSIS. He is also an associate professor at Georgetown University. Mr. Green, would you introduce your panel? Thank you very much. Welcome everyone. Thank you, Colonel Booth and our colleagues at Louisiana State University and the Pennington Family Foundation. I think I speak for all of us at CSIS when I say how much we appreciate this series on disaster prevention and response and how much I think it will mean to our Japanese audiences that New Orleans is here today to express solidarity with the Japanese people and offer what lessons there may be from that tragic experience a few years ago. This is, as Prime Minister Khan has said, the biggest crisis Japan has faced since the war. The toll is going to be over $200 billion by conservative estimates and probably over 20,000 souls lost. The psychological toll will be harder to measure. Japan went into this disaster with some challenges for its economy. Those in some ways have been highlighted. The demographic problem overwhelmingly the people lost in this tsunami have been toward 70 years of age. But the response has also highlighted some real strengths in Japan's society and economy that have often been forgotten in the narrative in the Western press over the last few years. Just the fact that there is a critical shortage of silicon wafers and other critical high technology materials demonstrates the dominant niche Japan continues to have in global production chains in critical high-tech areas. The world has really marveled even, I would say, even the Tsinghua and the People's Daily have had editorials praising the stoicism and determination and preparedness of the Japanese people for this. And there have been highlights of real courage and activism. The self-defense forces have received universal praise. Japanese youth, which was once dismissed as kind of listless and lacking for motivation and dismissed as herbivores in the Japanese press, has really mobilized and really galvanized a sense of purpose with this. The key question, of course, will be economic recovery. That will determine in the long run whether this disaster changes Japan's role in the world. And we're going to talk primarily today about economic recovery and reconstruction. Although we'll touch on the energy situation, we'll touch on disaster relief lessons, we'll touch on the social and psychological and civil society repercussions. Before I introduce my fellow panelists, I also want to highlight for you the announcement yesterday in Japan of the Fukuiinkai, the Recovery Committee for Japan, which will be chaired by Mr. Yoni Kura, the chair of Keidanren, the Japan Business Federation. We at CSIS will be announcing in a few days a parallel effort in collaboration with Keidanren. We'll be establishing a task force and working over several months to make recommendations for how the U.S. and Japan can collaborate and how the U.S. can support and provide expertise and build ties as the Japanese government, Keidanren, Japanese civil society, make their plans for recovery and reconstruction. So today is an early look. We'll learn more in the weeks and months ahead about the scope of the challenge. And we have an excellent panel to address this at CSIS with our colleagues at Keidanren. We'll be coming back to this over the coming months with more research and recommendations and hope to invite you all to be involved in that. This panel is, I think, well known to many of you. Arthur Alexander, on my right, is an economist. He's a colleague of mine at Georgetown University, where he teaches a very popular class on the Japanese economy. He was at RAND at many years. And for a number of years headed an institution here in Washington that many of us miss called the Japan Economic Institute, which focused on Japanese political, economic, and foreign policy issues. Yu-Gi-Oh-Tada is from the Sojitsu Corporation, formerly Nisho Iwai. He was here in Washington at Brookings. He also headed Sojitsu's operations in the Sun Rock Institute and is a leader in the Keisai-Do-Yukai, which is the Association of Japanese Business Executives, where he's vice chair of the U.S. Japan Committee. He's just arrived from Japan a few days ago. For those of you who know Tadasan, his other, it's not on his resume, so I hope he won't mind me telling you. But for many years, Yu-Gi-Oh-Tada was a private in the Second Rhode Island Infantry, which was a Civil War re-enactment unit. So if you ever traveled to Antietam or Gettysburg and saw one Japanese private marching with the Second Rhode Island against the secessionists, sorry, our Louisiana friends. I'm from a solid Yankee family myself. Yu-Gi-Oh-Tada is a good union man. Probably doesn't have an opportunity to fire his musket and his rifle in Japan. Marcus Nolan is Vice Director, Deputy Director at the Peterson Institute for International Economics, PhD from Johns Hopkins. Mark has written an influence policy on exchange rate issues and has been especially, I think, influential in thinking about unification and reconstruction of North Korea. Very different case from Japan, obviously, but Mark has put his head around one of the toughest economic, macroeconomic, microeconomic reconstruction challenges we may face in the decades ahead and knows Japan well, having lived in Japan, studied at Saitama University and been a fellow and associated with Japanese institutions. I'll ask questions for perhaps 30 minutes and then we'll open it up to the floor. And I have a couple of, we won't have opening presentations, but I have a couple of questions I'd like to open up with. I want to first ask, I'll start with Arthur and then go to Mark and then Tarasan. Just in a long-term sense, what you anticipate the economic recovery trajectory will be. We have some precedents like the Kobe earthquake. The World Bank has put out a damage assessment of well over 200 billion dollars, but it said economic growth should recover within 2011. There are debates about whether recovery really represents economic growth or just replacing destroyed assets. But to begin with, how would you assess the growth trajectory we can expect over the coming years based on what we know? I did bring a few slides. Let me just highlight a few of them. I'm going to zip by some of them. I think we can start with this one. This was the Great Kanto earthquake in 1923. And this is the Ginza area in Tokyo. And we can look at the vast amount of destruction. There's a few masonry buildings that are standing, but we just see block after block. We can actually look down to the waterfront there, the fishing market, because it's all disappeared. And this is, I think, thematic of what I will expect and what I'll mention. Here it is two years later. The streetcars are running. The buildings are back. The shoppers are out on the street. The cars are running. This is a modern society that works. It has competence. It's a rich society. It's a big country. And it's back working again. I think this is what we can look forward to. Here is the GDP, going by annual GDP figures. And it's hard to find the earthquake in this. The red line is a general trend line. You can actually see that GDP does go down for that year. But it's hard to distinguish from the noise level. If we look at more of that, here is the Kobe earthquake of 1995. Kobe and the surrounding area was a real center of manufacturing, transportation, of economic activity densely populated. And when we look at this quarterly data, you don't see any impact. There's no blip in the data at all around that. Here is the prefecture for its annual data, 95. It goes up. It goes up the next year. And then it comes down. Japan was going into recession that year. But for the regional output, we don't see anything. Here is just manufacturing. Manufacturing is about 20% of the economy. Monthly data. We are getting finer and finer. Can you pick out? There's a lot of noise in the ups and downs. If you squint, you actually see it. If you put a magnifying glass on it, it does pop up. And here's the magnifying glass. And we see that in the month of the earthquake, GDP for the country, not GDP, manufacturing came down. It fell 2.5% a month. It went back up most of the way the next month. By the third month, we're back on trend. Tertiary sector services is about 60, 65% of the economy. That fell in the month of the earthquake in the nation as a whole. It was back up two months later to where it had been. And I think this is the sort of thing that we can expect over the long run. Now, the blips now are going to be, I think, about twice as big and last for twice as long because of the electricity problems and other things. But I would say six months from now, it'll be a chart looking somewhere like this, a little bit more extended, a little bit more of a downturn during the problems. But within six months, because of reconstruction, because of reconfiguring, because of redundancies, in the system, we'll be back to where we were. So that's kind of my quick response here. Thank you. Okay. Mark? I think I should warn the audience tonight. I think we have an optimist and somebody who's beyond optimistic. I don't think you're going to find a pessimist. They give a sense of where people are. I don't think there's a pessimist on the panel. There's nobody sitting over on this side of me. I would largely agree with Arthur's analysis and just add a couple of caveats to it. The Kobe earthquake of 1995 is a reasonable benchmark. The current one is much worse just as an earthquake. And it also presents two additional problems that we didn't see in Kobe, which I think is going to make the economic dislocation both greater and longer lasting. The one, the obvious one, is the nuclear situation. There's no equivalent in the Kobe case of this unresolved problem with the damaged nuclear facility. Second is associated with that there has been a disruption to the eastern grid of the island of Honshu. Who would have known, but the island of Honshu has two electrical grids. And in some ways that's nice because it means the whole country isn't disrupted or the whole island isn't disrupted. But it also limits the amount of load shifting that one can do. So in areas essentially Tokyo and North or Tokyo and East, there continue to be problems with electricity. And what that means is that the economic dislocation, which is normally confined to a specific region that has been affected by the disaster in Kobe, it was Kobe, is being propagated through the electrical grid to other parts of the country, in particular in Tokyo. So that means that in the short run, economic dislocations are probably going to be greater than a typical earthquake or a typical natural disaster because it's affecting activity beyond the immediate area. We have the uncertainty with the nuclear reactors. And the third uncertainty which is thankfully dissipating is that we get a major aftershock that either further disrupts the reactors or hits a larger population center. Obviously none of us want to see earthquakes anywhere in the world. In some sense, as strange as this may sound, Japan was lucky in that the city of Sendai is isolated. The surrounding areas are lightly populated for the most part. If the earthquake had hit 200 miles to the south, it would have hit Tokyo, which is a metropolitan region of 35 million people. So with each passing day, it looks like we've dodged that bullet of a major aftershock that could really further disrupt the situation. So I think Arthur is basically right. We've got a short run problem, decline in activity. Industrial production will surely be down this quarter. We'll surely be down next quarter. One hopes that rebuilding activities will get underway so that GDP growth will actually accelerate in the second half of the year. Whether it nets out, I'm not as convinced. Most people were expecting the Japanese economy to grow at, say, 1 or 1.2 percent. It may not make it this year. But I am confident that once these immediate problems with the nuclear issue and the electrical grid are surmounted, that we will see a very forceful rebuilding effort, and that certainly 2012 and so on, we'll see a lot of pickup in economic activity and a lot of reconstruction in the Tohoku region. Well, yeah, I believe with the two domains. But my observation is optimistic in the Japanese economy in general. But the very pessimistic about the Tohoku area, about how they can recover from kind of this damage this time. Because this is a triple disaster in addition to the 9.0 earthquake that the 20 meters high tsunami wiped away most of the coastal industry area. And then now this is a nuclear reactor issue. But before that, unlike two gentlemen, I'm from Tokyo this time so that most of you may rely on TV coverage or CNN, Washington Post. That may sometimes illustrate more than what we really are. So that my role here today is that in order to, since at the time of the earthquake I was in Tokyo, so that in order to share the fair view assessment between you and I, so that I would like to share my experience at the time of the earthquake. So March the 11th, 2.46 p.m. in the afternoon, I was at the Tokyo, downtown Tokyo hotel in New York, and waiting for the Japanese Americans' delegation from the Washington D.C. headed by Irene Hirano. And then before that, that session was scheduled between three to four-thirty. And then our side was the Keisai Doyukai headed by Sakurai-san, 12, the Japanese businessman waiting for the delegation. And then before that, earthquake happened and all the shelves for our base falling down. And then we started communication how, what is a Japanese entrepreneurship innovation for the remaining one and a half hours as it is. And of course, there's an aftershock in every 10 minutes, but we concluded that from the courtyard, we can see the old high-rising building was dancing like a Hawaiian dancer. But even the most highest structure, the Sky Tower, which reached out to 634 meters, still intact. And then so that's the kind of first impression, okay, that's fine. Structure in Japan was not damaged by the earthquake. On the next day in the morning, because I have to go to the Osaka, early in the morning. So even before the commuter train started, 7 a.m., I reached out to the Tokyo station and got the Tokaido Shinkansen, bullet plane, and which operate perfect operation and arrive at Osaka on time. On time means plus, minus, 32nd. Not Amui's Amtrak. So just like Amtrak. So that the life in Nagoya Osaka is quite normal. So that means 99% of Japanese population was not affected. And then somehow, you know, that the New York Times following days, weeks, praised the Japanese about selfless sacrifice, stoicism, or perseverance. But we are Japanese. It's also the human beings. That means in some way we have a breaking point. Of course, our breaking point might be higher than that of the American. But since these days, like water contamination, or any other sea import, export ban, or any radiation check at every port, something like that. So those stress is now affecting Japanese. So of course, we are quite garments, perseverance. But still we need to concern about that. So that also the kind of mood it may affect the Japanese economy in some way. But the Japanese side, of course, supported by the western part, of course, might be recovered step by step. But still, I don't know how to address to the Tohoku area. I lived in Tohoku for a while in Iwate prefecture, which was hit pretty hard. And I understand that that area accounts for about 4% of GDP. Sendai port after taught me is about 1% of shipping. But the electrical water and other impact will be geographically much broader. We have, in addition to our panelists, CSI experts, Jane Nakano, who's an expert from our energy program. Stacey White, who is our expert on disaster prevention and response, and Lisa Carly from Global Health. And maybe if I think you have a microphone, if I can put Lisa briefly on the spot, if there's anything you can interject at this point about what we're starting to hear about some of the health concerns, water safety, food, and mental health, if there's some insights you can give us at this point. Yeah, no, sure. Thanks very much, Mike. And I think I just offer maybe four brief comments of things that I think we need to all be watching as this response unfolds. And they've been highlighted in some articles that have come out in the last week or so. But I think the first thing, obviously, to be concerned about is people's physical well-being. And there are very real issues around supply of water and shelter and food. And particularly, given the number of elderly affected, how they're dealing with chronic health conditions and supply of medications that are required to treat heart disease and diabetes and other conditions that have left unattended can actually pose very serious health consequences. I think a second major issue, of course, is around mental health. And I think what we've seen in other complex emergencies is that there is an effect that actually continues for quite a long period after the actual event, certainly in young people, certainly actually in mothers. I think this has been documented in the case of Chernobyl in Three Mile Island, and I think also particularly in the elderly. And I think that's going to bear close watching. There are going to be real challenges around rebuilding some of the physical infrastructure. I think we know that there have been considerable numbers of health personnel lost in the parts of Japan that have been affected. And those people are going to have to be replaced, and those physical facilities are going to have to be rebuilt. And I think the last issue that's going to be important is looking at the radiation effects. And I guess my impression has been that what's made disaster response effective in many other international circumstances has been an interoperability across response agencies so that they speak the same language and know how to address the issues that are unfolding. But I don't think we've quite seen that on the nuclear issue. We have WHO saying one thing. We have IAEA saying something else, and we don't really have the type of connectivity we probably need to have with national authorities that watch these issues closely. I think that's going to be something we're going to need to go back and take a second look at. Thank you. Actually, why don't I just go down the line briefly and turn next to Stacey on disaster response, especially I guess what we would call internally displaced persons, 80,000 plus displaced persons, over 100,000 some figures say. What happens over the coming, the San Riku Kaigan where I used to go is just tragic for me to look at having been there. It's matchsticks and mud. They can't go home for some time. What happens? What is over the coming months or even years? How does that transition work when you have displaced persons like that waiting to go back to the hometown that's been destroyed by a tsunami? I think I would just preface my comments by saying related to what Tadasan said. I think very much Japan is still in an emergency response phase and not just in the physical aspect, but also in the psychological point of view. And so we have graphs and we start talking about recovery and rebuilding and the very people who need to be leading that effort might not quite be there yet. And when I say those people leading that effort, people think about government, but I mean one thing we do know and our folks from Louisiana can tell us is that the local participation is critical to making sure that the design of whether the transitional homes or permanent resettlements is absolutely key to their sustainability and to their success over time and to the actual revitalization of the economic communities in the Northeast. So one, what I would say in terms of the nuclear situation, I mean I really don't know at what point these people are going to be able to return to these evacuated areas, but that experience does show us and demonstrates that the closer you can get displaced persons to their communities of origin so that they can live in transitional homes, but they can also be rebuilding their livelihoods and their lives while they're living transitionally is really the most important thing to do and that's something that's been demonstrated again and again. Another sort of positive lesson we might take from the cashmere earthquake and also from the tsunami in Ache is that in those cases the federal government actually brought a unit of administration for reconstruction and rebuilding to the region of the country where the greatest devastation had occurred and that was actually really useful in making sure that local people were participating and that their voices were heard in sort of the design and implementation of different programming, but also that you know sort of the red tape and the bureaucracy that can happen at federal government level didn't mean that you know things were slowed or in fact you know inefficient in terms of the implementation of some of the reconstruction programs so you know getting people as close to their homes as possible and making sure that the response effort is as localized as possible is two key points. Thank you and Jane on the energy front 29 percent of Japan's power generation is nuclear so I understand it and for TEPCO for Tokyo Electric Power it's about 50 percent. What happens to the you know the distribution of energy supply over the coming months they're going to be rolling blackouts I understand until May and then the summer will depend on the weather so the coming months and years one would expect a lot more LNG to be in that mix but what's the formula you'd expect? So it was really interesting how any plants have you know shut down in the immediate aftermath of the earthquake and tsunami I guess in the nuclear sector there are 50 there are 54 operating reactors and the 11 of them shut down either you know mostly by design well by design they all in a safe way shut down but then there are also damages to the thermal power plants you know gas coal you know those power plants as well and as you said you know it's now affecting not just the folks in the northern part of Japan that were struck by these natural disasters but then people in Tokyo where I guess Tokyo accounts for I guess nearly 40 percent of Japan's GDP and you know rolling blackouts are you know even though it's scheduled it's you know it's it's not it doesn't make it easy for folks in Tokyo or surrounding areas to focus on some of the recovery or disaster management tasks at hand. I've seen a couple different forecasts I know that at least in Tohoku region the schedule rolling blackouts are no longer like a schedule but in Tokyo area we're talking surrounding prefectures I guess there are about nine prefectures you know it's expected to continue until the end of April you know at least and then of course you know once summer approaches then I guess as far as typical or typical electric power company region goes I guess it be my fault like about 15 to 20 percent short of the you know of the peak demand so obviously you know right now it's you know I think there is much less need even from the industrial sector you know manufacturing plants and so but so but it'd be interesting to see you know I would how that I guess the recovery from the manufacturing sector may outpace really the recovery from the power producing sector so that's the key the timing and scope is I guess you have to know but and so it's it's really tough to say but I know there are efforts to restart some of the thermal power plants that have not been in operation but it might take quite a while it's not something you can just turn you know turn on then you know get going it's not like you know water out of faucet so it might take two to three months it might take even longer for some of the aging power plants and then but then I guess the good news as Mike use you mentioned is LNG I think there is for now in the global LNG market I think the supply is still there it's not it hasn't seen any panic because of this tragedy in Japan so I think you know many folks are turning to LNG as a sort of short-term solution from what I understand there's still three out of six refining refineries that haven't come back to operation so I think Japan has about 60 and only six got damaged and then three are back so the oil is you know oil demand will probably stay pretty low for the immediate future LNG you know there I guess both the government and the Japanese business folks are pretty busy trying to see how much of the LNG cargo they can secure for now so there are lots of hope that's helpful thank thank you all three of you you know there are various collateral effects of this on Japan's foreign policy and I expect one of them will be that Japan-Russia relations which were in a very bad place two weeks ago are going to be transformed you can already see it in the bilateral diplomacy to start preparing for a much more mutually beneficial relationships around LNG back to the panel let's one of the other big challenges will be financing the reconstruction Moody's investor services put out a warning that the cost of capital will be high for Japan there are problems anticipated of inflation of a high yen damaging exports as insurers presumably or allegedly there's some debate about this we capital we bring capital home to pay for damages or as with 200% of GDP Japan is forced to issue new government bonds let me turn to you first mark on this question of I guess can Japan afford it part and do you see a scenario where maybe the IMF or World Bank or others get involved to are the inflation and high yen fears over overdone how do you see that side of it at this point no I don't see it I don't see a scenario in which the IMF or the World Bank would get involved in any major way I mean there may be some symbolic actions but but not any major way first of all I think we need to be we need to be careful here the estimates that we have are all highly provisional remember we've still got these nuclear reactors out there kind of ticking away that we're not exactly sure what's happening with them we don't know exactly what is going to be necessary to get the eastern grid back up to being fully functional there's some you know there are various strategies including adding additional capacity to ship electricity from western Japan to eastern Japan adding new capacity and so on so it's all very provisional the Japanese government has released a figure which is just over 300 billion dollars for reconstruction costs that's about the same as what one of my colleagues and I calculated on the back of an envelope the other night was about 300 billion there are other estimates out there they're up in the area of six to eight which strike me is very high if we take 300 that's about five percent of GDP so that's that's a big number now there are essentially two ways that one can generate the funds for for reconstruction and that's that's five percent of GDP presumably spread over about three years one way is to issue new debt and we hear this figure of more than 200 percent of GDP which you mentioned that figure is factually correct but it's also a bit misleading much of that debt about a hundred percent of GDP's worth is owed by one Japanese agent government agency to another and much of that is backed up with with with assets that generate real revenue streams as anybody who's ever driven on the Japanese equivalent of an interstate would know they have tolls that would that would make Americans absolutely you know die okay so so real net debt is something north of a hundred percent of GDP so that's a weak starting point but it's not it's not a disastrous starting point second thing is um that debt not for any legal reason but just a result of private preferences is overwhelmingly owned owned by Japanese residents and one would have to expect that Japanese residents are less footloose than say London hedge funds so one gets the sense that the government of Japan has more room to maneuver than say you know the government of Portugal or the government of Greece would have in similar circumstances the IMF says they don't think financing is going to be an issue moodies despite their warnings as they don't anticipate any downgrade in sovereign debt rating so they have a certain amount of room to maneuver in terms of issuing additional debt they also have capacity for expenditure switching one of the reasons that Japan has such a terrible debt problem is decades of absolutely wasteful public investment driven by the wildly disproportionate influence that lightly populated rural districts have on national decision making so you had bridges to nowhere you had small fishing villages getting modern port facilities you had bullet trains going through you know bucolic rural areas um that stuff can stop at least temporarily and money that would have gone into those white elephants can be diverted to building a tohoku one of the things that I found most heartening if you're looking for silver linings in this disaster is the rapidity in which the Japanese political system seems to be moving beyond this beyond just switching expenditures from white elephant public investment projects but they're actually talking about real belt tightening uh the ruling party the democrat the democratic party of japan is talking about putting agricultural subsidies on the table cutting subsidies to agriculture in order to generate funds for rebuilding sendai the opposition party countered by putting child care subsidies on the table and cut some child care subsidies to rebuild sendai so there's politics involved this isn't complete kumbaya but it is striking especially if you compare the japanese political response to our response to 9-11 then instead of talking about tax cuts they're talking about shared sacrifice now I have some colleagues who think that maybe this is not the moment for shared sacrifice they would make an argument about kane lack of kanesian aggregate demand and maybe you don't want to cut those subsidies maybe you just want to finance more we can get into that if you want but I think the basic issue is there's still a lot of uncertainty about how much this is going to cost the government of japan has more cards to play that may then maybe immediately apparent and while we don't have a government of national unity I have been struck by the willingness of both major political parties to put current expenditures on the table as a mechanism for generating funds for rebuilding and not just financing or or shifting patterns of public investment that is okay three things I would like to mention the first international financial institution you know that JB exposure is bigger than world bank and Japan has been a major donor for the all the financial institutions so that the regarded international you know is aid from the those institutions I don't think it's feasible but the second things the japanese economy or japanese financial markets quite valuable to their attack speculative activities so that the last week such as g7's coordination and just send a strong message to the financial market or or so those kind of the assistance is quite helpful but still we need our own political leadership to control everything yeah well mark mentioned hedge funds in London you mentioned Japan's vulnerability to speculation I've heard from friends in Tokyo some sort of resentment that perhaps the high end is being driven by hedge funds or outside forces is this something that will become a political problem you think or cause a major backlash against yes hedge funds or the international economy in general well let me the as soon as I heard about the earthquake I sent out emails on various lists that I was on saying expect the end to rise and for a very simple reason is that a lot of the investment from Japan the funds that are going abroad now Japan is a net exporter of capital to the rest of the world a lot of that will be staying home so instead of going abroad is staying home and the effect of that on exchange rate will be to tend to drive up the the end it happened after Kobe and a lot of people said well there's a lot of other reasons that happened after Kobe remember there was nick leason at bearings bank who is investing in in Tokyo stock market futures and that had collapsed and things but my interpretation at the time was it was because of the earthquake a lot of money reconstruction money would be invested in Japan and the same thing even more today and as soon and it don't have to have expectulators and nasty hedge funds and so on out there betting on all of this but in some way the market works to immediately back up that back up those things that will happen in the future in today's prices and immediately we started seeing the yen spiking up it was driven down by the intervention and we have started to see a continuation of drifting higher since then I think people are worried about more interventions or something that interventions can do in the short run but not in the long run you look a little quizzical about all this well I I mean I think the idea that the yen would rise in response because of repatriation of funds by insurance companies or Japanese individuals I think is is quite reasonable I share that interpretation but if you were sitting at your computer screen like I was the other night when the yen spiked five yen in 30 minutes I I think it would be hard to else going on that was not you know something that was very that was both unusual and not particularly constructive and I think that part of the part of the story is is just sort of prosaic the market had closed here it hadn't yet opened up in Japan so it was only Australia New Zealand that were open so it was thin trading it didn't take a lot of money to move the market but I think the g7 intervention in that circumstance was entirely appropriate because it basically what the g7 was saying was that we can't fix your nuclear reactor but we can put that our thumb on the scale so that nobody you know in London or New York gets the idea that maybe we can make a quick buck on the situation and so I think it's kind of an insurance policy um you know that was a reasonable thing and that having eliminated that extreme volatility uh yeah you're going to see this general upward drift in the exchange rate which I think is appropriate for the reasons you say does it does it become a problem if that upward drift uh starts to make exports uncompetitive and could it become something that's that that would change your relative optimism about the economic trajectory over the coming years does the drift become dangerous in a sustained or structural way in other words well being the proverbial two-handed right that's right um you can make an argument that actually having a little bit of you know a little bit of depreciation to kind of help the traded goods sector get you know kind of pushed along is desirable but if you think that um that Japan is going to have to keep more savings at home for reconstruction purposes that process is going to be consistent with a more highly valued yen yeah yeah what about um the idea that out of this uh disaster will become uh there will be a new um uh the spur for innovation fuel cell technology I mean if nuclear is not going to be as attractive politically or technologically shale oil or other things do you see this um spinning off uh innovation and technologies that might also have a beneficial impact or is that too speculative no no uh no I don't think oh there are changed incentives there will be changed incentives to do things but I think the liquefied natural gas is where the incentive will lead uh and perhaps companies being more conscious of having some of their own self-generation equipment uh at hand for emergencies if they can we may be I might like to know your your view of that well some of the uh a lot of companies now be buying some of the big turbines uh to generate power for their own facilities and then perhaps feeding off whatever is left into the grid uh are we seeing likely to see that are we seeing that right now do you want to answer that chain then I'll go to mark and okay and yeah thanks for the question I don't have that much to ask to I know that um at least when it comes to that issue I know uh more activities back I mean here in the U.S. as opposed to in Japan but I agree with you I think the LNG um so there might be a you know greater interest in um you know fuel cell uh high you know uh you know technology but I think in general if I may add I think if it's really if the if we are to invest or you know look more into technology I think then perhaps um you know I don't think we can really dismiss nuclear I mean you know we're the Fukushima folks are dealing with second generation technologies and it's I mean there has been quite done in the past 40 years the the so I think technology is is one of the key uh you know keys but then you know then you know I guess the nuclear technology should be one of the you know a list of technology areas to look at but but you know the shale gas is also an interesting one I don't think Japan has really shale gas reserve I've been looking at shale gas reserves in China and India recently but there may be you know greater interest in some of the regional Asia Pacific countries you know looking hot you know harder at their reserve levels and how to devote them and and perhaps I mean that would definitely have an impact on the regional LNG market I'm not saying that they might start exporting right away or any time so soon but you know if these are all potential the solutions to some of the challenges that Japanese will have to address thanks let me turn to Mark and and Yukio and then I'll open it up on this question of innovation and all right I feel about your question the way that Joe and live uh reputedly uh felt when asked about the French revolution which by the way is an urban legend but thank you Henry Kissinger yeah it's too early to say um look if if the if the problems in Fukushima are brought under control and you know we don't get radioactive tap water in Tokyo and so on then there may be there may be reactions in Japan maybe not more broadly if god forbid the situation in Tokyo and Fukushima really turned south and you got you know something that looked more like Chernobyl than Three Mile Island then it will have more profound impact on the political reaction and it's regulatory changes that will drive some of the innovation because it'll create incentives for alternative technologies so I think in that sense it really is too early to say until we see exactly how the nuclear situation plays out um beyond that my I would expect that you would see one of the responses that you would see over the medium run in Japan to this tragedy is renewed emphasis on these kinds of of engineering and tech technological solutions and one of the issues that the government of Japan is going to confront is exactly how to manage and organize and what is the vision for rebuilding Sendai and Sendai in an odd sort of way despite its isolation had an high tech industry and one can imagine um rebuilding Sendai in a way that it actually that you try to make it an attractive growth pole in northern Japan attracting high tech you try to make its relative isolation an advantage in terms of lower cost housing in terms of recreational activities I mean think of an American city that's not pinned on you know the Washington Boston you know corridor and there are some attractive aspects to that so the government of Japan could actually push that that process forward possibly but that requires vision that requires planning and we're simply too early in this process I mean you know for that to really you know assume it's proper place on the agenda okay so innovation is one of the key area we discussed during the earthquake together the actual earth while it was shaking the building yeah yeah so that that's a Japanese trading company that's strategic thinking Japanese Americans see asking in case I do it at that time why Japan lacked entrepreneurship or innovation and my observation was in this way okay in case of the innovation there's a full type in my sense the first one a state of art technology an invention of the kind of high tech or anything is based on like during the Cold War Cold War it's a kind of from the military technology that spin off to the conversion technology became the ICT FT or ET or whatever and then that in in case of the United States the second innovation was came from the venture capital or very adventurous financier who put the money from from the city's aid but those first and second type of innovation was not developed in Japan because of the the peace constitution or whatever but the third one that's and the fourth one there is one another type of innovation that is mass production kaisen or see production management that is a third category the fourth one for the user size necessity like a tv uh nintendo game now contribute to the age of society to health care whatsoever so that in this line we pick it I like to pick up the third one a fourth one so that instead of your cell type set of art technology maybe that hybrid car will have a extra outlet which can use to the kind of a refrigerator during the power out to see uh blackout or those kind of functional additional function or mass production to put into the more kind daily uses or like a weave without a screen uh in that area so those kind of uh necessity based innovation will coming out based on our so you think there will be innovation but it will be in places we wouldn't normally have expected it interesting all right let's open the the the discussion to the audience we have microphones if you raise your hand a lot of yeah i'll call on people if you want to direct it to someone specific let me know right here where's our microphone team okay thank you very much my name is kawa hero kawaoji the world bank and yes it is a very interesting presentation and I agree with you I am not so pessimistic about the future of the Japanese economy to recovery and I don't worry about financing the public expenditures or recovery reconstruction cost by issuing the government government bond but one thing I worry about is the confidence private consumption the consumers confidence in Japanese societies the main difference between the this time at the time at the previous two earthquakes it's that now the Japanese society is very very aging societies and almost 70 percent of the our household financial asset are owned by the people over the 65 years old and I don't think that's their confidence of the consumer or private consumption is recovering so fast after this kind of the very horrific experiences and so and yes as you know the most of the event or entertainment are now cancelled all over the Japan that is because the sharing the sacrifice or the because of the power outage or the nuclear issues and so private consumption has a very impact that is there almost 60 percent of the GDP so I think that's it is not so yes small things so if you have some comment on that I'm very welcome that thank you you want to go first are there purely conjectural okay not based on evidence but a little bit of evidence I think that after much of the initial consumption here that we have seen in the past in Kobe for example was because people couldn't get out they couldn't get to the shops there was production shut down in the immediate area of the the trains the metros the subways weren't working and we did see a hit to consumption consumption did decline but within a very short time it resumed right back on the trajectory within within about a month or two a very short time I don't think the people who are away from the disaster area are very much taken up with it while it's happening but it quickly tends to fade I mean you said you took the subway or took the bullet train the next day even in the pictures he brought when they were while the earthquake was going on people continued their lunch and I think as I said purely conjectural based on a little bit of you know information that's been there I don't think we're going to see that loss of confidence to people saying why buy anything it's all over that kind of thing we in fact I would suspect that down in Fukuoka which is distant from the earthquake people are continuing their normal lives as though nothing had happened I would actually like to see talk to restaurant keepers down there in the south how are things going are you seeing any change and I suspect maybe on the day or so of the earthquake the day or two after there may have been an effect people were glued to their television set and there but I I haven't seen that evidence but I I would like to and I would predict that there was very little effect down there but you were there and what do you what do you say yes so on the next day I was in Osaka and the life in Osaka was totally different from the talk area so that their consumption attitude is quite active and so just the way they are so that I don't see any differences even after soon after the earthquake and the Tokyo area of course some of the consumption soared like a toilet paper or a pet bottle I don't know why Japanese toilet paper addiction but any event oil shark or earthquake the first things that we buy is a toilet paper so that in this way it's a kind of peculiar kind of conceptual style but on a whole on a whole in the Japanese economy so as I said from western part we'll push up step by step toward the north but still I don't know how to address to the talk issue maybe you have no I don't know but I saw that diapers also sold out but with Japan's aging society it wasn't clear which which time I actually think I'm probably in greater sympathy with your concerns than than the other panelists I and but perhaps for a different set of reasons when Arthur showed those pictures of the great Kanto earthquake one of the things he forgot to mention was that 140,000 people were killed among those were thousands of ethnic Koreans and other minorities that were slaughtered by mobs who had been told by the popular press and some government officials that they were poisoning wells and the inability at least relatively perceived inability of the civilian leadership to respond to this crisis led to a declaration of martial law and was a contributing factor certainly not the sole factor the Great Depression had something to do with it but a contributing factor the eventual rise of Japanese militarism and I'm certainly not saying this is going to happen now but my point is that these kinds of disasters can have profound political effects and what we have now in Japan is a very strange situation you've had for almost 60 years a single party dominant system where one political party the liberal democratic party governed almost continuously since the end of the American military occupation following the Second World War the government we have now the the Democratic Party of Japan was really flailing I mean they came to power two years ago they were really flailing and they've been putting a situation which I think is probably sadly kind of understandable for our guests from Louisiana that in the kind of fog of war that accompanies this sort of disaster government officials will make misstatements they will inadvertently spread misinformation and so on not because they're trying to do anything just because it's extremely chaotic and confusing situation if they turn out to do well if they can get the nuclear problem under control if they can appear to be competent forceful even heroic in the way they respond I think that this could probably go a long way to cementing a true two-party system in Japan which would open up a lot of doors for Japan to deal with a whole bunch of issues in a more transparent and forthright way than they've been dealt with in the past however if the current unease with this government deepens if and I don't want to insult anybody in the audience but if this looks more like the Bush administration or Hurricane Katrina then you could have not only an alteration in power among the political parties but in the Japanese case you could have actually a restoration of the status quo honte as it existed for most of the last half century of essentially one party running the country and so I think the confidence issue is actually a very deep issue I wouldn't to me I wouldn't tag it on the aging population so much but basically the possibility that the population could really lose confidence in the in the current government and that could really have a depressing effect on people's future outlook and as consequence the economic behavior. Although I have to add that going into this crisis the DPJ had about as low a level of public confidence as it's possible to have with something like less than 15 percent of the public saying they support the the party and the LDP hovers at around 12, 13, 14 they they compete in that very very very low end of public support. My I agree with what you said I I I wonder whether Prime Minister Kahn can survive this in the long run I don't think they can replace him in the in the near term to mid term there has to be a supplemental budget again another one in June or July can't even hold elections in parts of Japan right now I think it will be hard for him and there will be I would suspect there will be repercussions whether that affects the DPJ as a whole compared to the LDP is a much more open question and we'll see but I I I remember the Kobe earthquake in 95 Moriyama was Prime Minister he was a socialist it happened in January 95 he stepped down a year later so it didn't immediately do him in but it was one of the things that really made Hashimoto his successor much more credible because Hashimoto was focusing on crisis management on competence as a same coalition but as a contrast and as an alternative to to Moriyama who you replaced I think you'll see politicians start brandishing their credentials as competent policy professionals and crisis managers and you'll see certain kinds of politicians now emerging whereas before you had kind of populists I think you'll start seeing people who have who have credibility as crisis managers that doesn't mean militarists or rightists I think it's a much healthier thing than that but but that's what happened 95 I wouldn't be surprised to see that happening in the in the year ahead not in the months but in the year ahead because you in the middle of a crisis like this you don't change captains yes sir right thanks for a fine presentation Leo Bosner private consultant and retired FEMA and a former men's political not my card yeah yeah I was talking to an old dog graduate um after the Kobe quake there was a lot of talk in Japan about should they create an agency like FEMA some kind of a national capability to coordinate and I've been part of those discussions I was in Tokyo lecture in the week of the quake but 16 years later there's still having discussions and from what I'm hearing back when the reports come out they are having a lot of problems coordinating effectively because they don't really have any agency or plan to do this in the Japan government do you think this will be enough of an impetus for them to actually either create a FEMA-like agency or create a true national disaster response plan in Japan wow yeah I do hope that any kind of a FEMA type thing so Homeland Security is hopefully see create in the future but uh see yeah the main problem is the lack of the political leadership because although FEMA worked perfectly but still is like a NSC type controlled everything to make a necessary implementation so that we're lacking those both side of the function now so that so that's going back to the we are really depends on the creation of new political leadership whatever I think I think your interactions over the years FEMA's and yours personally with Japan have been have been well received and there before the DBJ came to power there was a growing movement to create a national security council staff and more effective homeland and emergency management dbj put that on hold and the dbj's theme has been politicians will take the leads and bureaucrats will listen I think now bureaucrats will have a lot more credibility vis-a-vis the politicians and some of these ideas about national security council and crisis management will come back the big difference will be there the f in FEMA the federal uh Japan's not a federal system so the relationship between state and local government and the central government is much more seamless than in our system and so it would probably not look like FEMA but I think that trend will will probably come back I don't know if you either want to wait a minute yes sir my name is Peter Hyde I'm sort of an interested bystander and a sympathizer to the situation my my question is for Tadasan I have experience in media relations nuclear industry and one of the things that that happens here is that we have a very close cooperation between state and local government in the event of a disaster and we immediately form a joint information center um and it seems as though in this particular instance there was a communication gap between the government and and tepco which is understandable given the nature of the severity of the event and the unfolding fast-moving events but do you see apropos of what this the question you just discussed a changing relationship between the government and business entities in Japan in terms of cooperation and how do you see that evolving if I may okay uh K-dan then stands up you see uh that is a quite big uh message to restore Japanese economy because for example the loading uh scheduled uh back out uh K-dan there it is uh and the Keisai-do-yukai-jaffes business community oppose those kind of things rather we like to control to make a seeding of the peak consumption by industry or by company whatever so those kind of the initiative are now going on and that may affect the more better relationship uh in such a kind of coordination but uh the most of the reason I I'm a little bit of a sympathy to the tepco's behavior because a ninbi not in my backyard you see that is not the okinawa issue but also nuclear as a power site uh is always needs a series of public acceptance so that means they said they have a hard uh tepco had a hard time to get the kind of public acceptance to do any kind of the measure but uh based on that kind of recent development those ninbi or pa's issue is a more serious issue so that is the kind of negative side uh in the future it's interesting though that is it did I understand you correctly that there are that the standard operating procedure in a nuclear crisis in the U.S. is to immediately set up a joint government and industry communication strategy business cooperates yeah and sort of takes a back seat to what the state does and so it just seemed in this case you had a polar opposites in tepco interesting thank you yes masahiro sakamoto from japan I have a question to chairman mr green and uh kata-san what what this crisis has an impact on u.s. japan relationship especially the in view of the so huge effort of us forces in in tackling this crisis what do you think of this it is a new question let me go first um well there were some missteps um and miscues as there always are in a crisis like this um I was concerned at first that the different explanation of the danger levels from radiation coming out of U.S. forces and the U.S. government and the nuclear regulatory commission the difference from from our 50 mile exclusion zone compared with the Japanese government's would breed resentment or friction but it's been several days and I don't think reading Japanese editorials and so forth that that that will be the case and it looks like overwhelmingly the impression in the Japanese press and of the Japanese public is that Operation Tomodachi the U.S. response was just extremely well received New York Times had an article yesterday which described on the ground some of the reactions of the Japanese who were rescued and going into this crisis polls showed 75 76% support for the alliance in Japan I wouldn't be surprised if those numbers go up because of the because of the way it was it was managed together there are still sensitivities though and I think in the U.S. side we have to be careful the response and reconstruction strategy will be led by Japan the U.S. will partner but this is going to have to be a Japanese and well of course naturally be a Japanese led effort and the U.S. side is going to have to figure out where where can we help and if the administration is careful about that and is not telling Japan what and how it should do things I think this will be an experience that shows how important the relationship in the alliance and military presence is to Japan all of that said the perennial problem on Futenma Futenma of the U.S. Marine Corps base this it doesn't change that I mean that's still going to be that's a NIMBY problem NIMBY problems you know are resistant to big change yeah still okay my observation is yeah U.S. Japan relations are clearly improved see despite the fact that the current administration so not facing good to the U.S. side but the state state the score wise U.S. Marine and U.S. Navy was quite cooperative in humanitarian disaster relief but using a lot of the like airport facility in Sendai or Yamagata and then U.S.S. Ronald Reagan and that 20 other fleet is helping so that is a quite good development but in a damaged area in talk area going back to the local government the local government still has a so many control so that the see in case of the Anaki like a Libya maybe lots of that can just set up their own facility or dig the hole anyway but we have in case of the Japanese standard we have to ask local government whether we can stand settle the facility here or there but those kind of communication was not yet solved but the first priority is just addressed to the damage control or disaster management so but in the short run it's good but in the long run it may cause the next issue well there should there will be lessons learned from this and there were some disconnects but in the Kobe earthquake the local government's interaction with the U.S. military and self-defense forces was somewhere between non-existent and hostile for the first week and this time the self-defense forces deployed over 200 helicopters within 48 hours U.S. and Japanese forces mostly Japanese put Sendai airport which have been devastated back online in about four days so I think there will be lessons learned but I think the general impression is going to be that you know the interoperability and the cooperation was pretty impressive especially compared to 95 yes in the back I am Ben Curran with the Federal Emergency Management Agency currently curious about the strength of the NGO sector in Japan I remember learning about lots of good examples of its contribution post Kobe and I expect that maybe even stronger nowadays I'm not sure and then in particular if you're able to anybody able to comment on the say mass care in particular how that might be going be the how it's organized in Japan related to supporting those in shelters I know a little bit about the Stacy others in the audience may be able to weigh in Japan's NGO sector is quite small compared to other OECD countries because the traditionally the central government has been so competent and powerful but I think the importance of civil society in NGOs has really been spotlighted and their NGOs like peace wins Japan I'm on the board of peace wins USA their American counterpart but peace wins Japan has been working with Mercy Corps and delivering very quickly and very promptly aid the Japan Red Cross with helping America and Red Cross so I think this will spotlight how important civil society and NGOs are but I think it will also highlight how small that space is in Japan it may be an area for the government as it looks as lessons learned to do more I don't know well yeah in basically Japanese NGO is a fast generation you know let's see in comparison to the US side the Harvard University was the first NGO established in the 17th century or something like that so there's so many generations by generations accumulation of the coverage or experienced fundraising and everything but in case of Japan we are just started the NGO's activity so that all the peace in Japan is quite doing well but still those are quite minority but instead like a corporate citizenship or corporate social responsibility is one of the kind of alternative things to support the NGO activity together with the government so that we always say that the public private corporation or public private activity but if we invite private public private NGO or academic so those kind of the formation will develop in the near future so that we still wait another until the second generation can work together with the first generation yeah there's all I would just add to that what we seem to be seeing in the disaster is a lot of self-organization just ad hoc groups of people in who have been affected getting together and organizing on their own in fact we saw the same thing in Kobe and it took some time in some of the more isolated areas where the self-defense forces or government other government agencies to come and they were already up and running but not from a previous organization but just folks who got together on the spot and that that actually seems to be it seems to be working but like there we heard about the the people the the displaced and what what's happening with them but what I can't say is definitely in a disaster like this this is not only a unique period in state society relations in terms of the performance that a government you know in the way it can perform vis-à-vis its citizens but also it can there's a space for a real emergent civil society so what we want to make sure I think in sort of the market government society sort of tripod is that we don't crowd out that space either with international support or with just business government interventions but we actually do leave some sort of space for this to emerge I mean in Sri Lanka after the tsunami there were NGOs sprouting up all over the place and the same I think can be said of the New Orleans experience so what I see this from you know being in the international humanitarian community now for 20 years you know who is the humanitarian community well it changes with every disaster and we will see after this Japanese experience what happens the other thing I've watched which I think is is is really poignant is that you know the Japanese are the biggest donors to humanitarian emergencies around the world year after year after year after year and what I've read recently is that many of the places where they've been whether it's Kashmir or around the Indian Ocean tsunami with JICA programs that now these local NGOs from these places of disaster are now helping at the community level in Japan which I think is really cool including Afghanistan yes back there Jude Egan from the Stevenson Disaster Management Institute one of the lessons learned from the Louisiana experience is that communities don't really recover until small businesses come back and I don't know much about Japanese culture and small businesses so I'm wondering first if someone could say something about that and then second maybe give a prognosis as to the we're talking a lot about recovery and rebuilding but do are we talking also about small business growth and how important is that to the stricken areas but again based on what I've seen in the newspapers this is pretty fragmented information but I think a lot of the devastated areas the village the fishing villages these little farming communities will probably not be coming back and we see again the newspaper reports a lot of older people who have small shops and so on saying you know they're not going back to this area that was wiped out and try to try to restart and then the question is and in the reconstruction efforts what is going to happen we were talking a little bit about this before is this the time where they move into the apartment building in the larger city are these villages gone forever is there this hysteresis loop where we don't retrace the path that we were on but do new things and I think these are some of the issues that we're going to have to be addressed have to be thought about do we build the wards that were washed out by the incoming floodwaters and I think this is going to be different from New Orleans in that sense is that a lot of the people were older people had marginal economic existences in these areas and I'm it's going to be it's going to be an issue to see to see how this how this plays out what kind of voice they have where they want to go do they want to go back to that old village that was just over a swept away or do they want to move into a small apartment building in a town where they can get their mail where they can do their shopping where they don't have to wait for the bus to come around and take them to these areas so this is going to be something to look at Japanese government announced $130 billion I think it is in special crisis concessional lending lending for small businesses but as Arthur points out the average age of farmers in Japan is 65 years old that's the average age and a lot of them I lived in this part of Japan are part-time farmers and it's an open question what kind of small businesses come back in but the government is trying I think understands exactly the point you've made and is trying to make loans available to help do you want to yeah and in this time in the Tohoku area so already we marked a 9 more than 9 000 victims and then 65 percent of the the victim is aged more than 60 years old so that in such a cases you know that in case of the I always thought of you with the Arthur that yeah aged people may not return and then small business operation needs a business opportunity but who feel the business opportunity in addition to lending the money so you see lending the money is a government reach but business creation of business opportunities somehow the private reach issues and then that is why I'm very pessimistic about that kind of about the region as a whole right but what about a city like Sendai or some of the larger towns where we're getting more concentration of people moving into those yeah that that is actually yeah in case of the Sendai yes and if you know that you're constructing a city for an aged population with the community centers and so on and so forth in some ways it's an advantage knowing what kind of right city you're trying to build for what kind of population um other questions we have time for one or two more yes right here can you wait for the mic thanks from the Federation of Electric Power Companies of Japan and I just wanted to get the you could answer some of our questions oh yes afraid not but I just want to get the panel's opinion on the effect of the recovery on two Japanese industries one being food exports we've already seen quite a run in the US on potassium iodine because of the fears of radiation so you know is there any effect to consumer confidence in Japanese food exports and the other would be tourism I think a lot of people have left Japan left Tokyo and they might not be coming back so I'd just be interested to get your opinion on those industries why don't we get you want us on your hand up we'll get your question and then finish up right here my name is Imura from Mitsubishi Heavy Industries and as first of all the Mr. Green said the Prime Minister Khan said this is the biggest disaster since the world war two in Japan and it is very agreeable in the scale and gravity but it is important to look back the history to the end of the war and also the procedure of recovery of Japan after the war and I remember something about the what the Japan did and what the Japan did not and it is highly appreciated if someone suggests what Japan should repeat or what Japan should not repeat okay my first question is what food exports Kobe beef and I don't think there's a lot of anything high-end melons and strawberries fruits to Asia but it's not a huge right and I have actually seen some comments on on the beef that may be effective may be radiated but I don't I don't think that's a major issue anyone disagree with that uh oh is this the final comment yes okay so I like to answer to both questions the first to Imura-san see we definitely require the strategic good recovery pros project plan like a Japanese-type New Deal to make a more see a low-bust economies building because like as you said that there was a two grid uh two power grid system for 50 cycle the 60 cycle eastern west but that was uh going back the major area more than 100 years ago so that at the time of the world war two we I see after the soon after the world war two all the city was just banished so that if we introduced the unified electric grid so yeah this time we we we didn't need to have a rolling back out this time so those kind of big strategy was required and in your cases like I like refer to the Prime Minister Kahn he's good at eating contaminated vegetable or any kind of so he is one of the best candidates to eat like a spinach every day in front of tv and then in case the tourists my suggestion since we have a several uh Japanese media so I like to offer the one big proposal to using the former prime ministers and the first ladies who are good to remission to to stimulate the economic relationship as well as the foreign relationship because fortunately we have enough former prime ministers so that uh in comparison to uh like a former the greatest president Jimmy Carter so I would like to see uh see the several prime minister former prime minister do the quite a good job to restore the the relations and the recovery of the economy thank you the question about what were some of the what mistakes may have been made in the post-war reconstruction is an interesting question and I'm trying to think of what what we could cite what we could look at well you could open the box of Yoshida Shigeru and wait for hours but no no there is there actually there is one and this and we've already alluded to it the role of government and not the role of government what what is the appropriate role for government here and what should they stay out of uh and we we've talked about bringing in uh local representatives talk about what you want in the local community uh there could be too much government involvement here which is a tendency in Japan look to government to do it uh and I think too much of that would be detrimental uh but then looking both to the local communities uh to decide and local businesses to provide the opportunities now remember after Kobe I had a guy coming into my office at the Japan Economic Institute and saying what could we do and I said and I had just heard about some foreigners in in Washington DC talking about how easy it was to open an office here in Washington open a business and apparently Washington DC City Hall had a one-stop place where you go to to open an office you had your fire department and your health food inspectors and your tax people and you they all had desks there and they somebody took you around to talk to whoever you had to and by the end of the day you had all of your licenses and approvals and or plans of what you had to do and I suggested this he said we could never get everybody into one office from all the different departments in the city uh and he says every department wants to have the monopoly of control of what they do I said well you're talking about a problem of getting businesses started and it did take a long time to recover some of them so I think there are some lessons there about the role of government the role of business and the role of the public organizations and not to try to control things too much but that's one thing I can come up with it's a point we'll take especially as Keynesian you know Japanese politicians especially on the LDP side had a long addiction to Keynesian prompt priming and it will be important to keep some of these these these points in mind well the question about tourism is amusing to me Mike and I both have an affiliation with the east west center in Honolulu and I was doing an interview with Hawaii public radio a couple days ago and they're worried about tourism in the other direction they're worried about when are the when are they when are they coming back I said life is good in western Japan the Osaka airport is open you know the thing I take away from this are two things they're and almost you know opposite extremes of human existence one thing is I think like so many people I have been really impressed by the resilience of the Japanese people in confronting this adversity I was on a call in show the other day and a young Japanese woman who resides here in the United States saw the you know the footage on TV and was getting her parents out of Japan she said it was like the end of civilization I thought no no no I was watching TV the other night and there was somebody from CNN and he was at one of these distribution centers and one of them the people had self-organized the distribute materials before the government officials arrived at another one they had run out of materials and the government official was apologizing and asking for patience and the man from CNN was very surprised these people were not rioting and not carrying on and I thought no actually it is it is quite a testimony to to the level of civilization that people are faced with such aversary pulling together so I think on a very micro level I think there's actually the behavior of the Japanese people when confronted with such a tragedy is really quite inspiring the other extreme I think the one one of the silver linings we can look for out of this is possibly this is a shock to the system that forces or certainly encourages or enables a reconsideration of some of these practices that have probably outlived their usefulness they may have made sense 60 years ago but they don't make sense today and one can hope that out of this terrible tragedy one gets some institutional reform in Japan that makes life easier for Japanese people and and basically contributes to a rebuilding and rejuvenation of both the earthquake earthquake and tsunami affected regions as well as the nation as a whole I think that to conclude and that was a very important note for Marcus the Bungie Moon the Secretary General of the UN had a quite eloquent statement about how much the world owes Japan and I think looking at the media coverage around the world that this crisis has highlighted that but I also think it's highlighted looking at the Japanese coverage you'd know better having been there it's highlighted for Japan how much Japan owes the world back and has and is and is and for that reason I am in a you know in a broader sense like like Mark quite optimistic about the longer term impact on I guess what I would call Japan's relationship with the world from both sides what we've discussed today is a macroeconomic picture that's difficult but not but hardly impossible but we started out in our discussion reminding ourselves that this is still a crisis and that there are people still people suffering and I know a lot of people in this room have done things to help Georgetown University and the local universities are selling these bands online it's a small contribution you can make American Red Cross they're fundraisers and I know everyone in this room cares about the issue because you're here but we shouldn't lose sight of that as we looked at the long term as well so I want to thank our colleagues at LSU and my colleagues from CSS and the panelists this is a very informative and important discussion thank you thank you