Thoughts on Japan and Uncertainty

Any discussion about Japan must start with the magnitude of the human tragedy caused by the March 11th earthquake and tsunami. As of March 26th, 10,102 have been reported dead, 17,053 remain missing and another approximately 240,000 are living in evacuation shelters. Can any of us, myself included, who have never been remotely touched by mass suffering, truly comprehend what this must mean to the individuals and families touched by the disaster and the Japanese nation?

The consequent damage to the Fukushima Daiichi nuclear complex is not yet fully under control with efforts to control and minimize radiation damage continuing with daily successes and setbacks.

Unquestionably the potential spread of radiation poses the biggest risk now to Japan itself, other nations and the global economy. Japan’s economy fortunately remains largely intact. Moreover, even though Japan has the third largest GDP in the world, it exports more goods and services than it imports, meaning that other countries will step forward to fill any void created if Japan’s economy and exports begin to falter. Bottom-line, the Japanese tragedy, practically unfathomable as far as human suffering goes, should not derail the global economic recovery unless the spread of radiation cannot be contained.

But what comes next? Conflicts in Libya and many other Middle Eastern countries continue with enormous geo-political implications, including the price and availability of oil to fuel global economic growth. Issues around European sovereign debt have returned to the headlines with Portuguese bonds in trouble and Spain rumored to be the next focus.

We would like to think that everything will calm down as soon as we get through all this, but I doubt it seriously. This is the world will live in now. It’s conflict and crisis. We are too inter-connected, and there is too much economic, political and social instability for normality to return. The question is how resilient we are and how skillfully we cope with and solve these problems as they surface.