The video and pictures from Japan continue to reveal the awesome and tragic devastation that resulted from the earthquake and following tsunami. Unfortunately, the death toll will likely rise to over 10,000 and the economic cost far exceed $ 35 billion. The entire north east region north of Tokyo has been severely damaged. Whole towns and small cities have either been destroyed or badly damaged. The misery is not yet ended as several of the Japanese nuclear reactors in Fukushima are damaged and radiation leaks are possible beyond what the officials have already explained as having occurred. The Japanese authorities have evacuated people within a 20 km radius around the plants.In at least two cases some degree of meltdown of the fuel rods may have occurred, in one case the reactor outer shell has exploded and the situation is not yet stabilized. These events are tragic and our hearts must go out to the Japanese people. Some 70 countries and international organizations are already sending aid and rescue specialists and no one can be unmoved by what we are seeing on our tv screens and computers.
The humanitarian disaster has to be foremost in our priorities but as Japan begins to recover in the coming days and weeks and months the economic impact upon Japanese growth and employment and the global economy will become important. The shock and destruction of wealth will initially be a hit to both Japan and the global economy. But as reconstruction and rebuilding take place there will be a stimulating effect from the great increase in investment and employment and consumption spending that will take place. With the co-operation of the central bank and the Ministry of finance in budgeting and financing massive reconstruction investment, Japan will regain its position as one of leading global economies.
On the North Africa front the discredited regime of Ghadaffi now appears to threaten the rebels who have liberated the eastern region centred at Benghazi. The Arab league has backed the appeal for a no fly zone and France and Britain are rightly insisting that western democratic countries need to act to protect in one way or the other the Libyan people from a campaign of terror and retribution by the Ghadaffi regime. As I explained in a previous post on blogspot Libya produces only a small percentage of the global oil supply and any disruption can be substituted from alternative supplies, although Libyan oil is of a very high quality in terms of its grade. The West including the U.S. and Canada face a moral crisis in acting effectively and together with our European allies to effectively intervene to prevent any kind of massacre and the end to human rights abuses.