Shattered Illusions : KOBE : Quake Reinvents Japan’s Identity

The earthquake disaster in Kobe exposes both the strengths and the still-active fault lines of the U.S.-Japan relationship. Beyond the stag gering human tragedy, Kobe’s travails will help define transpacific perceptions in ways that can unite, or further estrange, the world’s two largest industrial nations.

The temblor’s most immediate effect was to fray the fabric of the now tightly integrated U.S. and Japanese economies. Barely minutes after news of the quake broke, analysts were scrambling to assess its impact on interest rates, key technology supplies and Japanese investment in the United States and around the globe.

At the same time, major U.S. corporations with offices in the quake-stricken zone--including Texas Instruments, Caterpillar and the insurance giant, AMFAC--rushed reassuring press releases to the media in hopes of calming worried investors and customers. As never before, the disaster demonstrated the extent of Japan’s astonishing penetration of the U.S. industrial base. In many ways, an earthquake in Japan is now felt as keenly on Wall Street.

The quake could also reverberate through the now moribund U.S.-Japan trade talks by generating enormous increases in lucrative public-works contract spending that the Clinton Administration hopes will find its way to U.S. construction firms.

The mammoth task of rebuilding densely populated Kobe and outlying areas, according to early estimates, could cost anywhere from $20 billion to $60 billion. Coincidentally, before the earthquake hit, gaining a share of Japanese government contracts for U.S. firms was a cornerstone of the Administration’s efforts to rescue its Japan policy. After being rebuffed on other substantive issues, the Administration took a hard line on public-works contracts, notoriously closed to foreign bidders in Japan even though Japanese firms freely participate in U.S. procurement. A year ago, facing imminent trade sanctions, Japan agreed to open about $20 billion worth of construction business to bids from overseas competitors, followed by a similar construction-related flat-glass accord last December.

Although the agreement was ballyhooed in Washington as a “historic step” that would give U.S. firms “a real chance” to compete in the Japanese construction industry, nothing of the sort has yet occurred. Progress has been so disappointing, despite the Administration’s apparently high expectations, that Sen. Frank Murkowski (R-Alaska), the head of the Senate Foreign Relations Subcommittee on East Asia and the Pacific, recently savaged the accords as “totally inadequate.”

But in the aftermath of the Kobe quake, Japan will spend billions to rebuild and retrofit the country’s roads, telecommunications, train lines, ports and other quake-damaged infrastructure. Because of price-fixing by construction cartels and idiosyncratic quake-related specifications, Japanese public-works costs are astronomical, typically 30%-50% more than similar projects elsewhere. The country would clearly benefit from open competition involving foreign companies, and the engineering skills developed by such companies as completed repairs in Los Angeles in record time.

As a result, the Kobe earthquake could be a watershed for U.S.-Japan relations if, out of tragedy, it actually helps open still-closed Japanese markets and equalizes the terms of trade.

The disaster could also help Japan recapture the sense of purpose it appears to have lost in the post-Cold War era. Formerly guided by clear, sweeping priorities--catching up to the West, for example--the Japanese now face more ambiguous, equivocal challenges. Without the stability provided by overriding goals, Japan tends to vacillate between the extremes of arrogance and vulnerability.

Nowhere has this been more apparent than in the country’s historical thinking about the threat of earthquakes, and its reaction to the horror of Kobe.

Before the hideous scenes of a city in ruins taught otherwise, the Japanese thought they had “solved” the problem of earthquakes with the same skill and precision with which Toyota outpaced General Motors. Seismic events elsewhere certainly caused concern, but for years the Japanese were assured by their leaders that they possessed more exacting building codes, better construction skills, safer gas lines, more sophisticated shut-off devices or higher-tolerance materials than anyone else. Buttressed in this self-confidence by a world media that fawned over everything they did--from enacting new building codes to annual earthquake safety drills for schoolchildren--the Japanese were convinced that the devastation nature wrought in less enlightened places, like Los Angeles, simply couldn’t happen to them.

It took just 20 seconds to shatter these illusions. The first major earthquake to hit a modern Japanese city in more than 40 years toppled an entire expressway, flattened tens of thousands of buildings, decimated the region’s transportation, water, power and telecommunications infrastructure, including the mighty bullet trains, triggered a deadly firestorm and caused casualties on a scale that dwarfed comparable disasters elsewhere, including Los Angeles. Days later, despite years of planning, government relief efforts were confused and ineffective. One of the cornerstones of the Japanese self-image--iron-clad confidence in their superior preparedness--was destroyed along with much of Kobe.

Reflected in agonized interviews with survivors, statements by harried government officials and official media commentary, a new skepticism is replacing the country’s once blind faith in its own abilities. Veiled references to possible “construction problems” may mean that long-ignored ties between notoriously corrupt construction cartels and the ministries that are supposed to regulate them may finally be examined for conflicts of interest that risk public safety. Investigations of whether Japan’s tightly knit fraternity of construction firms--the so-called dango --could have cut corners to improve profits, or if its uncompetitive structure might have reduced the industry’s capabilities, may be launched.

Others are now asking why the government spent billions of dollars on widely discredited earthquake “prediction” schemes--such as observing the behavior of fish--instead of upgrading roadways, rail beds and the country’s aging housing stock. Then there’s the more subtle issue of whether Tokyo, where the country’s leaders reside, was unjustifiably favored in quake-preparedness efforts. Exacting standards may have been used to construct some of the capital’s infrastructure, but most of the rest of Japan awoke on Tuesday to discover that they live and work in patently substandard structures thrown up decades ago when their nation was obsessed with industrial advancement, not improving basic living standards.

All this could fuel the aimlessness that has recently flourished in Japan, a diffidence that produced, in the last three years alone, a dizzying succession of fragile, Third World-like governments in a country once noted for stability. Dispirited by a misplaced faith in their leaders’ competence, and the belief that their technological prowess somehow made them immune from the dangers others routinely faced, despair and paralysis could supplant once boundless confidence.

No one should underestimate the psychic aftershocks that Kobe will produce. But rather than wallow in newfound vulnerability, it is also possible that the earthquake will stimulate a renewed commitment and purpose, perhaps on the model of Japan’s remarkable postwar reconstruction and industrial expansion.

Using the disaster to break up the Diet logjam blocking much-needed domestic spending, and motivated, as they almost certainly will be, by Los Angeles’ rapid earthquake recovery, the tragedy can focus the Japanese on what they do best: mobilizing to meet clearly defined objectives. To a country seemingly in search of purpose, rebuilding western Japan and retrofitting the rest of the country is a mammoth, tailor-made challenge. Furthermore, if in reconstructing Kobe the Japanese learn to genuinely include foreign participants in their efforts, they will have gone a long way toward transforming what is now an epic disaster into the catalyst for a much more profound national revitalization.

Just as in Los Angeles a year ago, however, the lasting import of the Kobe earthquake will almost certainly be the heroic commitment to survive and recover that the residents of western Japan will demonstrate. Indeed, their country has long provided the world with examples of unparalleled endurance and fortitude. It is precisely such lessons, reaffirming the experience of other regions, like California, which continually rise above the tragedies life inevitably generates, that will ultimately prove to be Kobe’s most valuable legacy to the world.*