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Ten years on, economic growth is faltering in disaster-hit areas

Namie, Fukushima Prefecture, was hit hard by the disaster on March 11, 2011, and an evacuation order remained in place for the subsequent six years

February 11, 2021

While Japan will soon mark the 10th anniversary of the 2011 Great East Japan Earthquake and tsunami, the economy of affected areas is showing signs of faltering.

The prefectures of Fukushima, Miyagi and Iwate have been shored up economically by public investment involving reconstruction projects since being devastated by the disaster on March 11, 2011, and the subsequent nuclear power plant meltdowns.

The three prefectures, however, are seeing reconstruction demand pass its peak.

As the triple meltdown at Tokyo Electric Power Company Holdings Inc.’s Fukushima No. 1 nuclear plant continues to cast a shadow over the coastal areas, the three prefectures now face the challenge of achieving autonomous economic growth orchestrated by firms and others in the private sector.

In the town of Namie, Fukushima Prefecture, an evacuation order issued shortly after the nuclear accident was partially lifted in March 2017. Although industrial complexes have been built and restaurants have opened their doors to customers once again in Namie, there are also many empty plots of land in the town, which shows that some former Namie residents had their houses torn down after giving up on returning from where they had been evacuated.

“Sales halved from before the disaster,” said Yasushi Niizuma, who reopened his restaurant in the town.

Meanwhile, some companies that were not doing business in Namie prior to the disaster have made inroads into the town.

“I don’t expect immediate changes, but I think the situation will be quite different 10 to 30 years from now,” Niizuma said with a sense of hope.

Prefectural gross product data show that the economy has recovered in the three prefectures since the disaster.

In 2011, the year of the disaster, the combined prefectural gross product in Fukushima, Miyagi and Iwate plunged ¥788 billion from a year earlier in nominal terms. But public investment increased sharply from 2012, with many restoration and reconstruction projects being implemented in disaster-affected areas. As a result, the combined gross product in the three prefectures in 2018 increased some ¥3.9 trillion from the 2011 level.

Noting that the region’s economy has been pushed up by public investment over the last 10 years, Yutaro Suzuki, economist at Daiwa Institute of Research Ltd., said, “It was not a self-sustaining growth.”

The three prefectures are seen to have suffered negative economic growth in 2020, chiefly reflecting a decrease in public investments and the spread of the novel coronavirus.

“An industrial recovery is crucial” for further economic growth in the region, Suzuki said.

Coastal areas in the three prefectures hit hard by the disaster are facing a serious population outflow. This is, in areas around the Fukushima No. 1 plant, including the town of Futaba, primarily due to the evacuation order still placed on some locations with high radiation levels.

“There are many areas (within Fukushima) that are nowhere near being restored,” Risa Ueda, head of the Bank of Japan’s Fukushima Branch, said.

While the central government is currently attempting to attract new industries to the region, the effects of such an initiative on the local economy are still unknown.

“Corporate performance has not recovered to the levels prior to the disaster at half of affected businesses,” Sachio Taguchi, president of Bank of Iwate , said. “We are still halfway down the road to reconstruction.”

Hiromi Watanabe, chairman of the federation of chambers of commerce and industry in Fukushima Prefecture, called on the Japanese government to look at the actual state of local economies and introduce precise measures, rather than end its support measures altogether.

As the economy has yet to recover to levels before the disaster in many parts of Fukushima and the coronavirus pandemic is also hitting the prefecture hard, Watanabe said, “What we need the most are job opportunities.”

https://www.japantimes.co.jp/news/2021/02/11/national/quake-disaster-economy/

February 14, 2021 Posted by | Fukushima 2021 | , , | Leave a comment