Panels call for urgent legislation to prepare for huge quake

By YOSUKE AKAI/ Staff Writer

Saying Japan’s very survival is at stake, two advisory panels urged the government to take immediate action--including finding an alternative capital--to prepare for an earthquake that could devastate the Tokyo area.

The working groups are discussing measures to deal with massive quakes that could be triggered by movement along the Nankai Trough as well as one directly under the capital.

In an unusual move, the groups called on the government to pass legislation for the quake-preparedness measures even before estimating the number of fatalities and damage from such temblors.

"There is a need for the entire society to deal with the two quakes that are expected to cause extensive damage," according to interim reports released on July 19 by the two working groups, respectively.

Passage of special measures laws would allow a wide area covered by the studies to take effective measures to deal with the possibility of the huge earthquakes.

The Nankai Trough extends from Suruga Bay near Shizuoka Prefecture to off the coast of Kyushu in southern Japan.

Special measures laws were passed in 1978 to deal with a possible Tokai quake and in 2002 to prepare for Tonankai and Nankai quakes. But there is no law for a unified response to a Nankai Trough quake with an expected magnitude over 9.0.

One estimate for possible damage from a Nankai Trough quake was 400,000 fatalities.

The two working groups have yet to come up with their own damage estimates. But their recommendation for swift passage of legislation underscores their sense of urgency from not being able to pinpoint when such a destructive quake might hit.

In preparing for a crippling quake directly under Tokyo, the interim report proposes selecting beforehand alternative sites that could provide back-up for capital functions. Among the cities named as possible alternative capitals were Sapporo, Sendai, Nagoya, Osaka and Fukuoka.

The interim report also called for measures to deal with long-period seismic ground movements and the huge number of people who will likely be stranded in Tokyo after a major quake.

It urged the government to secure revenues for the necessary measures, but it did not specify a figure. In the current fiscal year, about 480 billion yen ($6.1 billion) has been set aside for such measures.

The working group looking at a possible Nankai Trough quake is expected to release its estimates for fatalities and injuries as well as structural damage in late August. However, the group dealing with the quake expected to hit directly under Tokyo has not reached the stage of presenting specific estimates.

The interim report, warning that a Nankai Trough quake could trigger a tsunami 20 to 30 meters high, called on areas with indented coastlines to construct levees and move schools and social welfare facilities to higher ground. It also suggested building those structures to greater heights.

In addition, the reports said construction of straight evacuation routes on flatter areas are needed, as well as measures to make evacuations using cars more efficient.

Developing nations should prepare for 'Lehmans moment', says World Bank chief Robert Zoellick

Developing nations must be ready for a severe global financial crisis should the eurozone fail to cope with its current problems and suffer a "Lehmans moment", outgoing World Bank chief Robert Zoellick has said.

By Reuters

Policymakers and investors are nervously awaiting the outcome of this weekend's Greek election, which could empower radical leftists threatening to tear up the terms of a bailout deal and send shockwaves through financial markets.

Developing countries needed to "prepare for the uncertainty coming out of the eurozone and the wider financial markets", Zoellick told the Observer.

"It will be better if they can avoid piling up short-term debts that can come due in volatile periods and look to the fundamentals of future growth - infrastructure and human capital," he said.

The World Bank had been increasing its lending to support Bulgaria's banking system - one of the most exposed to Greece - and acting to prevent a credit crunch in southeast Europe, the paper reported Zoellick as saying.

The bank was also taking unspecified measures to protect countries in north Africa that were vulnerable to Europe's debt crisis and trade finance facilities were being strengthened for francophone west Africa, the newspaper added.

"Uncertainty in markets is now starting to increase costs for developing countries," Zoellick said. "The ripple effects are making everybody's life harder."

In a reference to tensions in the eurozone over Greece's future, Zoellick said: "Europe may be able to muddle through but the risk is rising. There could be a Lehmans moment if things are not properly handled."

The bankruptcy of US bank Lehman Brothers in September 2008 triggered a global financial slump that indebted Western nations are still struggling to recover from.

World Bank Urges Developing Countries to Brace for Long Term Volatility

The World Bank is urging developing countries to brace for the possibility of more economic turmoil in Europe. In its Global Economic Prospects Report, the bank advises emerging market economies to strengthen fiscal positions and develop medium-term strategies to protect their economies.

Emerging market economies may have weathered the 2008 financial crisis better than more advanced countries, but the World Bank warns -- it could happen again.

Senior bank economist Andrew Burns says anything is possible right now in Europe.

"Although we don't see it as a baseline scenario, it certainly is possible that the situation in high-income Europe deteriorates significantly. And if it did, that would have very serious impacts for developing countries," Burns said.

With borrowing costs still rising in Spain and Italy, and an upcoming Greek referendum that could forever alter the Eurozone -- Burns predicts a bumpy ride.

But even with the most recent bailout in Spain - economist Peter Morici says the problems facing Greece and Spain are very different.

"Spain's problem is one of a banking crisis. Greece's problem is one of a government crisis," Morici said.

Either way, Morici says the crisis has the potential to plunge the world into another recession, reducing global trade and exports dramatically.

The World Bank says developing nations need to focus on enhancing domestic productivity and boosting infrastructure development -- while reducing debt.

"What we suggest is that countries take the time now to try and replenish some of those cushions, some of those buffers they used in 2008 - 2009 so successfully to recover from that crisis. Try and rebuild those now by bringing policy to a more neutral stance, reducing fiscal deficits so that they have the ammunition to respond if a crisis, a second crisis, announces itself," Burns said.

Despite an over-abundance of caution, Burns is optimistic about a full-fledged global recovery - one led by emerging economies in Central Asia, the Middle East and Sub-Saharan Africa.