Business Matters

Japan still No. 3

IN THE days following the triple whammy that hit Japan on March 11, numerous pictures appeared in the local and international press showing Japanese citizens admiring the cherry blossoms that regularly appear during the first weeks of April. The “Sakura” was widely used as the symbol of Japan rising from the ashes of their recent disaster.

A Japanese classmate of mine at Harvard taught me all about “Sakura.” He even wrote a haiku about this sign of spring that every Japanese eagerly anticipates during the winter. From their past record of recovering from adversity, I can fearlessly forecast that two to three years from now, Japan will be back on its feet as the third largest economy in the world.


An article in the International Herald Tribune (March 16, 2011) by Joshua Hammer reminds us of the Great Kanto Earthquake of Sept. 1, 1923. At that time, it was the worst calamity in the history of Japan. The present Japanese generation hardly remembers it. It leveled the great port city of Yokohama and burned down 60 percent of Tokyo. Some 145,000 people died, including about 150 Americans and 40,000 mostly poor Japanese who were incinerated by a freak tornado of fire. Despite the relatively backward state of technology in the 1920s, the Japanese people were able to recover from this natural disaster so successfully that by the late 1930s, the Japanese leaders felt confident enough to challenge the leading powers of the world to a war that led to World War II.

At the end of World War II, Japan was completely devastated, with some two million Japanese dead and a nuclear holocaust flattening the two cities of Hiroshima and Nagasaki. With some assistance from the United States, but depending mostly on the industry, perseverance, patience, cooperative spirit and sheer determination of its own people, Japan became the second industrial power in the world by the 1980s, breathing down the necks of the Americans in terms of technical innovation and industrial productivity. Although the slogan “Japan Number One” did not actually materialize because of a vacuum in political leadership and an unforgiving demographic winter, the Japanese people continued to demonstrate their admirable human virtues of hard work, discipline, patience and harmony. It took them just two years to recover from the killer earthquake that hit the city of Kobe in 1995.

My optimism about the future prospects of Japan is bolstered by another article that appeared in the same issue of IHT. Written by Peer Fretwell and Taylor Baldwin Kiland, the essay entitled “History is on Japan’s side,” presents evidence gathered in a research on post-traumatic stress disorder. The research showed that an encounter with trauma can actually lead to highly positive changes in individuals. Trauma can actually increase the resiliency of the victims to subsequent adversity. Today, some researchers maintain that post-traumatic growth is far more common than long-term post-traumatic stress disorder. The norm is to adapt and grow following trauma. Together with their traditional virtues of hard work, discipline and harmony, post-traumatic growth can actually benefit the Japanese society in the coming years.

Some of the benefits that may come with this post-traumatic growth may be the rise of a new breed of younger political leaders who will reform the Japanese bureaucracy, a greater willingness to depend on foreign guest workers to help in the task of reconstruction and in caring for the rapidly aging population, and keener appreciation for the value of children in a large family.

As regards the last point, I was very impressed with the heroic efforts of many of the victims of the earthquake and tsunami to try to save the lives of their relatives. For the long-term survival of Japanese society, a most important change is a greater appreciation of the value of children. May the post-traumatic growth include a reversal of the extremely low fertility rate that is the greatest hindrance to long-term economic progress. The real Sakura needed is the springtime of larger family sizes that can reverse the demographic winter. Only an increase in the proportion of younger people will lead to the consumption-led growth that Japan direly needs. Otherwise, even the multiplier effects of $300 billion in reconstruction costs will quickly peter out.

Dr. Bernardo M. Villegas is senior vice president of the University of Asia and the Pacific. His e-mail address is [email protected]

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