Japan’s Economy: Where to Now, with Failed Fukushima Power Plant?


Following Japan’s “monstrous earthquake” (the largest in the region for over 1,200 years; seventh largest ever in the world), the country’s Fukushima power plant failed which has led to “fears of serious accident.”  But experts have said that there isn’t a risk to human health from the low radiation.  The crisis in Japan is no doubt escalating following Friday’s earthquake and tsunami ; a situation which isn’t being helped by the failure of another emergency cooling system at a different reactor.


Energy Fuels Japan’s Economy


Energy has always been a major source of economic sustenance for all countries.  But for Japan it is even more the case.  This is for the following reasons:  less than  half a percent of Japan’s crude oil supply is accrued from domestic sources; the country has to import more than 80 percent of all its major energy needs;  and added to this fact is the issue that Japan is home to very few domestic sources of uranium, natural gas or coal.  In spite of this, the country has managed to develop its economy into the second largest in the world.  It has managed to decrease its dependability on crude oil since the oil crises’ in the 1970s by instead using a mixture of energy resources, one of these being nuclear power.


Which Way Forward Following Tsunami


So the question that will be asked when things start to calm down a little in Japan, is what is the way forward for Japan’s economy following the impact of the tsunami and the failed Fukushima Power Plant.  It would be doubly devastating if the incredible work that has been done on bringing Japan to the forefront of global economic success were to be undone because of this crisis. Only time will tell what direction the country – and especially the economy – will be taking.

MoU and KPC


The recent partnership agreement between MoU and KPC comprises: upstream, downstream businesses; R&D in HR and planning and energy security.  At the signing various official dignitaries from Kuwait and the UK were in attendance.  Malcolm Brinded, an executive director at Shell noted how this milestone is “further cementing our partnership with Kuwait.”  There are plans to develop Kuwait’s Jurassic gas fields through developing capacity of Shell and Kuwait Oil Company (KOC) staff.  As the chair and MD of Shell companies in Kuwait Ahmed Mouti noted, that since the company is known for being a “leading gas company” building a partnership with KOC will only be mutually beneficial to the two companies.  Training will be needed because of “unique geological challenges” gas developments encounter today that require specific technology.

 


 

Substantial Drop in Asian Shares

 

Recent world events – New Zealand earthquake, Japan’s credit rating downgrade and continued Middle East and Libyan unrest – led to a significant drop in stock markets across Asia.  For example, South Korea’s Kospi, the Nikkei 225 stock and Hong Kong’s Hang Seng index all plummeted around 2 percent.  As well, Japan had trouble dealing with its huge debt following Moody’s Investors Service downgrading its outlook for the country’s credit rating, citing “increasing uncertainty” over Japan’s capacity to effectively deal with rising debt.  This doesn’t spell good news for the country which only last month had its sovereign debt rating cut by Standard & Poor.  Australia, China, Singapore and Taiwan are currently in the same boat vis-à-vis stock markets. The only good news for the region of late has been the increase in oil prices.