Mind your step: dangers underfoot in Japan

The world has been suffering grievously from major man-made calamities these last few years. Among these the financial meltdown (including the Euro's woes) and the oil spill in the Gulf of Mexico captured the most headlines. As well they might. For the sheer scope and character of those two catastrophes dwarfs most other bad news and should alert us to the severity of the kind of challenges humanity faces.

Though the calls for 'action' from every quarter are getting ever louder, conflicting interests have stymied progress on effective policies to stem the tide of bad news.

Where does Japan find itself in the 'disaster tables?' And how may we expect it to deal with present and future threats to its prosperity and social livability?

So far, relative calm

As for man-made disasters, Japan's worst post-war calamity was the 1956 mercury poisoning of industrial wastewater from the Chisso chemical factory in southern Japan, which caused the Minamata disease that affected thousands of people with paralysis, disfigurement and death.

On the economic front the country suffered, in the early 1990s, the dramatic bursting of the man-made bubble economy of the 1980s. The collapse caused severe dislocations in the corporate and banking world, and a prolonged recession that has since been partially aggravated by the 'Lehman effect' of 2008.

Yet by and large calm has prevailed in the wake of such events, whether they occurred on home ground or in far-off locations. To be sure, the effects of the economic downturn are not lost on the people in their private lives. Unemployment has gone up to over 5% and more people have been dipping into their savings to make ends meet, but there have been no mass protests of the Spanish and Greek kind, and the stores and café's are seemingly as crowded as ever.

The Japanese tend to react strongly (some say: emotionally) to an acute crisis; they are less well equipped to anticipate and rationally dissect an emerging dangerous situation. But once any of the potential threats facing the nation turns real we may see a sudden change in the people's behavior.

No room for complacency

What are the main areas of serious concern?

Energy
Virtually all of Japan's oil is imported, mostly from the Middle East. Oil prices may go up sharply if China's energy needs keep burgeoning, and would likely be further affected by a world-wide ban on deep-sea drilling following the Gulf of Mexico spill. To diversify its energy sources Japan has been turning heavily to nuclear with its 53 nuclear plants providing more than one-third of the nation's electricity. However, recent inspections showed half these have 'problems.' Though none are considered serious at this time, past accidents and the risks associated with radioactive waste disposal (including overseas shipment) have increased skepticism about the safety of nuclear energy.

Future vistas? Solar panels offered by Sharp Corporation

For these and other reasons Japan looks to solar power as the preferred energy source for the future. It already ranks 4th in the world and aims to have 30% of households equipped with solar panels by 2030. This will also help lower its CO2 emissions which remain well above Japan's own Kyoto Protocol commitment.

An unusual sight: mothers with more than one child

Demographics
With Japan's reproduction rate hovering around 1.2 children per woman, its population, now 126 million, is expected to shrink to 90 million by 2050. There will then be one pensioner for every two working citizens. In contrast to Europe, where population declines have been offset by immigration, Japan has resisted that approach. But without immigration labor shortages will become worse, the cost of supporting the aged onerous and the economy shrink due to a decline in aggregate demand.

Social stability
Family and group structures and the pursuit of 'harmony' in human relations have been vital elements of Japanese society for centuries. With the decline in marriage and procreation and the heavy migration of people from the provinces to the cities, Japan's social fabric is under siege. The introduction of new social values based on personal initiative and responsibility has not been smooth, in part because individualism in Japan is often equated with selfishness. Education policies have not kept pace with the changing needs in a globalized world. In addition, growing immigration – if materialized – may upset the country's racial and cultural cohesion. All these factors make Japanese society less stable and more vulnerable to crime and unexpected shocks.

Lackluster consumption?

The economy
Despite record-low interest rate levels, high national debt and continuing recession, the Yen has strengthened by 20% over the past 2 years against the US dollar and 30% against the Euro. Among its likely causes are (1) Japan's low exposure to sub-prime lending and derivatives; (2) the fact that its national debt (though at almost 2x GDP by far the highest among rich nations) is largely financed by internal savings; and (3) the recent perception of the Yen as a safe haven from the US and European financial turmoil.
The obvious downside of this trend is the damage it does to Japan's exports, already threatened by fierce competition from South Korea, China and several Southeast Asian countries. South Korea has not only emerged as Japan's equal in many high tech fields, but it also appears to adapt better to changes in world markets. Added to this are the effects of lackluster domestic consumption due to market 'saturation' and the shrinking population.

Efforts to offset these negative trends by boosting inward tourism (mainly from China, Taiwan and South Korea) and developing new technologies such as solar power and robotics have had some success, and so has the export of manga and anime pop culture. Yet the overall picture is gloomy, the more so as drastic measures (including a sharp increase in consumer tax and a cutback in public works) will be needed to reduce the dangerously high budget deficits and keep the national debt from rising to 250% of GDP by 2015 as forecast by the IMF.

Domestic and foreign policy
The electorate was fed up with the long-ruling corrupt LDP and kicked them out in spectacular fashion in August 2009. The winner, DPJ, managed to squander their first-ever turn in power in less than it takes a baby to be carried to term, their hapless prime minister Yukio Hatoyama failing to implement his most crucial election pledges.
One of his major errors was to publicly call for a 'more equal' relationship with the US without suggesting how to achieve that ambition. Instead, he confused everybody with his oft-repeated intention to relocate the Futenma airbase out of Okinawa, only to backtrack in the face of opposition from the US and from candidate areas within Japan.

Hatoyama has meanwhile yielded his place to the presumably more reliable Naoto Kan, but it remains to be seen whether the new government will be more successful. Without doubt, the five areas of concern identified above (and more could be mentioned) pose a complex dilemma for Japan's rulers: Bringing down the deficit will put a damper on the economy; but neglecting to do so – and indeed failing to effectively address any of the other areas of concern – could result in deepening economic stagnation, social unrest and/or a worsening of international relations.

Either way, it appears that major shifts in Japanese society are in the offing.