Tags: michael | carr | Japan | Trading | Partners | Earthquake | Effects

Japan’s Trading Partners Could Feel Earthquake Effects

By    |   Wednesday, 16 Mar 2011 09:59 AM

Consequences always extend well beyond the epicenter of an earthquake. Spending will now shift towards rebuilding, as it did after the 1995 Kobe earthquake.

Malaysia is likely to maintain strong economic growth despite the tragic earthquake that has damaged so much of Japan. In 2009, 8 percent of the country’s economic output was destined for Japanese markets, and that activity grew along with the global economic recovery.

Plywood is a leading export product for Malaysia, and demand for wood tends to surge after natural disasters. Rebuilding will require raw materials and machinery, and Malaysia has been a leading to supplier to Japan for years, meaning the country should be well-positioned to assist in the needed rebuilding efforts.

Thailand is also ready to provide raw materials and machinery to help get Japan back to normal as quickly as possible. Thai’s fast-growing economy has been exporting about 6 percent of its total output to Japan, making it a natural source of supply now.

The Philippines has been exporting about 5 percent of its economic output to Japan. While products like bananas and factory tools are likely to be in high demand, semiconductors have represented the bulk of Philippine exports. As factories take time to retool and rebuild, production and demand for semiconductors may decline.

While a single data point is a poor statistical sample, Japan and Malaysia saw relatively strong economic growth in 1995. The Philippine and Thai economies experienced slowdowns, although Thailand was strained by structural problems that would lead to a global financial crisis in 1997.

Using history as a guide, rebuilding usually follows large disasters, and economies continue to reflect the long-term trends in place before disaster struck.

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MichaelCarr
Consequences always extend well beyond the epicenter of an earthquake. Spending will now shift towards rebuilding, as it did after the 1995 Kobe earthquake. Malaysia is likely to maintain strong economic growth despite the tragic earthquake that has damaged so much of...
michael,carr,Japan,Trading,Partners,Earthquake,Effects,us,economy
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2011-59-16
Wednesday, 16 Mar 2011 09:59 AM
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