Toward Sustainable Economic Growth Following the Great East Japan Earthquake: Restructuring of the economic infrastructure and policy response

Roughly half a year since the March 11, 2011 earthquake, Japan is making all-out efforts to rise to its feet from the grave damage inflicted on its economy, industries, finance, society, and people's everyday lives. However, the Japanese economy is still facing daunting challenges. While economic activities in the Tohoku region, which was the hardest hit by the quake and tsunami, have yet to be restored, Japanese companies must rebuild their supply chains across and outside the country in view of ensuring business continuity into the future, and power supply constraints must be overcome. In addition to these pressing needs caused by the disaster, Japan is confronted with long-standing chronic problems such as the continuing appreciation of the yen with no sign of subsiding and massive fiscal deficits, the largest among the advanced economies. Immediately after the earthquake, the Research Institute of Economy, Trade and Industry (RIETI) has been dedicating research efforts to explore immediate policy measures needed to overcome the unprecedented challenges as well as a medium- to long-term policy direction.

This policy symposium will examine the post-quake state of economic infrastructure and financial functions in the Tohoku region as well as the fragility of Japan's economic foundation that has been revealed in the aftermath of the disaster, for instance, in terms of energy security and fiscal conditions. Participants will discuss ways to overcome the fragility, achieve the early restoration and reconstruction of the affected area, pave the way for medium- to long-term economic growth, and what the government can and should do to help achieve this end.