The magnitude 9.0 earthquake that struck Japan on Friday 11 March could have caused as much as US$ 34 billion worth of damage. So far 1600 people have been confirmed killed in the tragedy and the final death toll is expected to be more than 10000.
The earthquake struck at 14:46 on Friday 11 March, some 50 km off the eastern coast of Japan's largest island, Honshu. It was the most powerful earthquake to hit Japan since records began in the 19th century, and the fifth largest quake anywhere in the world in 110 years.
Severe tremors were reported all along Honshu's north eastern coast, including some 400 km south in Tokyo. The resulting tsunami caused waves as high as 10 m to strike the Japanese coast, while smaller but still destructive waves also hit Pacific islands and the west coast of North America.
According to the United Nations Office for the Coordination of Humanitarian Affairs, some 1200 buildings were destroyed by the quake and tsunami. US-based risk analysis company Air Worldwide has estimated the insured property losses at between JPY 1.2 trillion to JPY 2.8 trillion (US$ 14.6 billion to US$ 34 billion), based on its catastrophe models.
There have been two explosions at the Fukushima Daiichi nuclear power plant in the wake of the earthquake, one at the facility's no. 1 reactor on Saturday 12 March and a second at the no. 3 reactor on Monday 14 March. Plant owner Tokyo electric Power company (TEPCO) has flooded both cores with seawater in an attempt to cool them and prevent meltdown.
So far a major radiation leak has been averted and a 20 km exclusion zone has been established around the plant, necessitating the evacuation of some 200000 people. The 40-year old plant is likely to be decommissioned once it has been made safe.
As a result of the damage to the Daiichi plant and shut downs at other facilities affected by the quake, TEPCO has started a series of rolling power cuts in the region it serves, which includes the Tokyo conurbation.
Japanese chief cabinet secretary, Yukio Edano said, "These rotating power cuts are being introduced at short notice, and will affect an extremely large number of people."
Comparisons are being drawn between Friday's quake and the 6.8 magnitude earthquake that hit the Japanese city of Kobe in January 1995. Some 6500 people died in that disaster and the final cost of the damage done was put at JPY 10 trillion (US$ 122 billion). This figure makes Air Worldwide's estimate of US$ 34 billion worth of damage look conservative.
Japanese Prime Minister Naoto Kan said, "I consider this earthquake and tsunami along with the current situation regarding the nuclear power plants to be in some regards the most severe crisis in the 65 years since the end of the Second World War. I believe that whether or not we Japanese are able to overcome this crisis is something now being asked of all Japanese individually. We Japanese have overcome many very trying situations in the past to create our modern society of peace and prosperity. I firmly believe that through our citizens working together to respond to this great earthquake and tsunami, we will certainly be able to overcome this crisis."
There are questions over how Japan will fund reconstruction work. The country's finances are in a much worse state now than in 1995, when the government passed an emergency budget authorising a multi-billion dollar reconstruction package.