Evaluation of the Restoration of Fisheries and Seafood Manufacturers after the Great East Japan Earthquake: Economic analysis utilizing a dynamic computable general equilibrium model

Author Name AKUNE Yuko  (Reitaku University) /OKIYAMA Mitsuru  (GENDAI Advanced Studies Research Organization) /TOKUNAGA Suminori  (University of Tsukuba)
Creation Date/NO. November 2013 13-P-022
Research Project Sustainable Regional Development: New industrial clusters and division of functions
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The purpose of this paper is to examine how the March 11, 2011 earthquake and tsunami impacted fisheries and seafood manufacturers in Japan. Using a dynamic computable general equilibrium model, we found that the current restoration policy is not sufficient to restore production back to baseline level, which is the production level prior to the Great East Japan Earthquake, by 2021. We conducted two scenario simulations in an attempt to create a policy that would oversee a complete restoration by 2016, following in line with the recovery in five years of the fisheries damaged by an earthquake and a tsunami on the island of Okushiri in 1993. In the first simulation, we found that the capital stock after the restoration period was less than before the earthquake, since the long-term trend of declining production would continue in these industries. In the next simulation, we examined the effect of total factor productivity (TFP) increasing under the same conditions, and it was shown that productivity improvement in fisheries and seafood manufacturers would allow their production levels to exceed the baseline targeted for 2016. Although the production level of fisheries changed from a long-term downward trend to an upward trend, that of seafood manufacturers showed a decreasing tendency. Total production overall decreases due to seafood manufacturers producing double that of fisheries. Therefore, it is necessary for a policy to allow improved productivity in seafood manufacturing by encouraging research and development (R&D) and investment to build a marine cluster with effective linkages.