On Jan.17, 1995, Kobe was hit by a 6.9-magnitude quake. The Great Hanshin Earthquake killed 6,400 people. Damage was estimated at more than $100 billion, similar to current estimates of the toll of last week’s 9.0-magnitude temblor in the Tohoku region of northern Japan. Yet, within 18 months, economic activity in Kobe had reached 98 percent of its pre-quake level. A state-of-the-art offshore port facility was built, housing was modernized—and a scruffy port city became an international showpiece.
The March 11 earthquake and tsunami devastated a society that, for all its wealth, was stuck in a rut. Over the past two decades, Japan’s economic growth averaged an anemic 1 percent a year. Politically, the country was rudderless. The Liberal Democratic Party, which had governed almost continuously since the end of the U.S. military occupation following the World War II, had finally worn out its welcome. And the novice Democratic Party of Japan, which had assumed power in 2009, was flailing.
For four decades after the war, Japan experienced cozy politics backed by a robust economy. Lightly populated rural district had a disproportionate effect on national politics. The government financed multibillion-dollar bridges to nowhere, expensive port facilities for small fishing village and bullet trains to traverse bucolic rural areas—and seemingly lined every riverbed in Japan in concrete.
But in 1900, the bubble burst. The working-age share of the population began to fall. In 1998, the labor force started to shrink, and a decade later, the country’s population began to decline. Eventually, voters concerned about the mounting costs of wasteful projects tossed out the LDP.
Before the earthquake and tsunami devastated the Tohoku region on March 11, the country was already facing a slowing economy, fiscal strain and deflation, and decades of wasteful spending had saddled the country with a debt more than twice the size of the economy. Now, beyond the tragedy’s human toll, the economic costs are still being counted—and could be vastly expanded if the nuclear reactor damage is closer to that of Chernobyl than to Three Mile Island. But if rebuilding is handled skillfully, there is hope that a different kind of Japan will emerge.
Despite its weak starting point, the government holds a few cards. Ninety-five percent of Japan’s debt is owned by its citizens, no foreign hedge funds; it’s unlikely that those citizens would dump their bond holdings if the government takes on more debt to rebuild the city of Sendai, for example. Financially, the government has more maneuvering room than might seem apparent.
Some rebuilding can be financed by redirecting spending from useless white-elephant projects to the higher priority of remaking Tohoku. The quality of public investment in the nation could improve, perhaps permanently, as a result of this crisis.
What is really at stake—and what will determine whether these other changes have any chance of coming to pass—is the structure of Japan politics. If the incumbent DPJ successfully manages this emergency, the episode could reassure Japanese voters that this fledgling party represents a credible alternative to the LDP. Japan would then have a true two-party system in which political power and ideas are genuinely contested. The Great Tohoku Earthquake could be the shock that pushes Japan not only to rebuild a city, but to remake itself politically for the 21st century.
21. The author wrote the first paragraph in an attempt to ________.
22. According to the text, the author suggests that Democratic Party of Japan ________.
23. Except the March 11 earthquake and tsunami, the hindrances that Japan’s economic growth confronts EXCLUDE ________.
24. On which of the following statement would the author most probably agree?
25. Which of the following is the most proper title of the text?
