Posts Tagged ‘Japan tsunami’

Eat a potato chip and send a kid to college

Wednesday, September 28th, 2011

They care

Besides manufacturing stuff, what do condiment maker Kagome, snacks producer Calbee and pharmaceutical company Rohto have in common? Not much, but in any case the three firms have joined forces to establish a foundation called Michinoku Mirai (Northern Region Future) to provide funds for young people who were orphaned by the March 11 earthquake and tsunami to pay for university or post-secondary vocational school. According to the Health Welfare and Labor Ministry, about 1,500 youngsters aged 18 or less lost both parents in the disaster, and starting in March 2012, those who graduate from high school and wish to continue their education can apply for up to ¥3 million a year from the fund to pay for anything related to that education, including entry fees, tuition and supplies.

The three companies estimate that the fund will need about ¥200 million a year, and each one will start by contributing ¥30 million for the first year, with the remainder coming from solicited contributions. They will continue supplying the fund with money for 20 years, at which point children who were orphaned as infants by the disaster will have graduated from high school. The reason the fund was created is that there is no public support in Japan for the continuing education of orphans. When orphans reach the age of 18, they are on their own. Foster care ends at 18, and since in Japan there is very little in the way of what in the West are called scholarships — meaning education grants — orphans almost never attend university. The exception is the long-standing, specialized private foundation Ashinaga Ikueikai, which provides educational support to orphans all their lives, from elementary to graduate school.

Disaster makes the heart grow fonder, but potential marriage partners still need cash

Friday, May 20th, 2011

Smile, you're married!

Since the earthquake and tsunami of March 11, there have been many heartwrenching stories in the news about people wanting to make more meaningful human connections, spurred by the realization that life is short. An article in the Asahi Shimbun reports that the clearest evidence of this change in societal attitude is a sharp rise in wedding-related goods and services. In the months of March and April, sales of engagement rings were 40 percent higher than they were for the same period last year; with sales of wedding rings 25 percent higher.

The marriage consulting and introduction service O-Net told the newspaper that “inquiries” into the company’s services rose 12 percent in April and 24 percent just from women in the Kanto region. There was also a 20 percent increase over last year in the number of people registered with the company who successfully tied the knot in March, and an 18 percent increase in April. A single woman in her 30s who newly registered with O-Net told the Asahi that she realized she wanted a life partner after she spent six hours walking home to an empty apartment on the night of March 11.

Continue reading about marriage in postquake Japan →

Post-disaster business opportunities attracting wrong kind of enterprises

Tuesday, May 17th, 2011

There's a lot of work to be done in post-3/11 Tohoku and organized crime wants a piece of the action. (Satoko Kawasaki photo/The Japan Times)

Like ants to sugar, underworld organizations have been making their way to the towns and cities of the Tohoku region that were destroyed by the earthquake and tsunami of March 11. The cost of cleanup and reconstruction is estimated to be some ¥15 trillion, so there seems to be enough sugar to go around, but according to the Sankei Shimbun, the boryokudan (organized crime), or yakuza, seem determined to secure as big a share as they can.

Police in the area are reporting that since early April two “unknown” organizations have been making the rounds of five evacuation centers in Ishinomaki, Miyagi Prefecture, handing out plain brown envelopes to evacuees. Each envelope contains ¥30,000 in cash. Local officials have cautioned individual representatives of these organizations, saying that their way of distributing the money is “unfair,” and that it would be better for them to give the officials the money so that it could be distributed more properly. This request was ignored in Ishinomaki. However, the same groups also delivered a pile of envelopes each containing ¥30,000 to the disaster headquarters of another city in Miyagi, Minami Sanriku, for distribution. Altogether, the “contributions” in the two cities total somewhere between ¥30 and ¥50 million.

Continue reading about yakuza in post-quake Tohoku →

Let them rent mansions: Compensation for disaster victims will barely make a difference

Friday, April 29th, 2011

Cleaning up after the March 11 tsunami in Sendai (Satoko Kawasaki photo/The Japan Times)

For seven weeks now people from all over the world have been donating money to various charities to help the victims of the March 11 earthquake and tsunami. According to NHK’s morning consumer affairs show, “Asaichi,” as of April 25 ¥1.7 billion had been collected by Japan Red Cross and other charity organizations. After going through four stages of bureaucratic processing the money was supposed to start reaching victims on April 27. In the first wave of payments, affected households would receive ¥350,000 for each family member who died or is declared missing. If the family completely lost its home in the disaster, it would receive an additional ¥350,000. If the home was partially destroyed, the amount would be ¥180,000. Families who have been evacuated from the area surrounding the Fukushima No. 1 nuclear reactor receive ¥350,000.

That cash will certainly help, but as explained in an earlier post the burden of rebuilding shattered lives mainly falls on the central government, which will only compensate homeowners and businesses by so much. And as explained in another post, earthquake insurance, like supplemental medical insurance, is not designed to cover entire losses. Basically, benefits provide a little extra money, something to live off of while a homeowner or business owner decides whether or not he wants to go through the grueling process of starting over from scratch, which means borrowing money. NHK interviewed a Sendai family whose 4-year-old home was spared from the tsunami but nevertheless condemned by the local government because the landfill under it had subsided to the point where the foundation was at risk. They still owe more than ¥20 million on their 30-year mortgage and though they have earthquake insurance the benefits will cover, at most, only half the balance; which means they have to come up with the other half of the loan themselves. Then, presumably, they have to take out a new loan if they want to buy a new house. According to one financial planner on the show, they’d be better off renting, “but, of course there are financial disadvantages to renting,” she added. Obviously, in this case, there are even bigger disadvantages in owning.

Continue reading about disaster compensation →

Consumers suddenly rushing back to pariah produce

Thursday, April 14th, 2011

On Tuesday, Chief Cabinet Secretary Yukio Edano took part in a bazaar in front of the JR Shimbashi Station in Tokyo that featured produce from Iwaki in Fukushima Prefecture. Iwaki is just outside the evacuation perimeter set by the government, and Edano assured shoppers at the bazaar that the food from Iwaki and other Fukushima farms “that are sold in markets are perfectly safe.” To prove it he ate some strawberries and tomatoes.

Edano’s reassurances recalled a similar stunt carried out by the current prime minister, Naoto Kan, in 1996 when he was the health minister during a food-poisoning outbreak that was blamed on daikon radish sprouts. In order to reassure consumers that the sprouts were in fact safe, Kan ate a bowl of them on TV. The implication is that rumors about food safety often outrun the facts, and the government has little recourse except to offer visual proof that the fear of tainted food is unsubstantiated. Usually, however, it’s the government that exacerbated the rumors in the first place.

Continue reading about self-restraint →

Disaster area quickly becomes huge automobile market

Friday, April 8th, 2011

One of the most indelible images people will take away from all those horrifying videos of the tsunami of March 11 is automobiles being swept up by the dozens and carried away. What’s important to remember about the Tohoku region, especially the coastal part, is that cars are an indispensable component of everyday life there. In Tohoku, there is one car for every two humans. Because much of the area is cut off from the rest of Honshu by mountains, there aren’t that many train lines. In fact, many of the people who died were in their cars at the time, trying to escape inland after the tsunami alert was broadcast. There are many stories of people driving to the homes of elderly relatives to pick them up and then getting caught in the wall of water.

In Miyagi Prefecture alone, according to a report on TBS, 146,000 vehicles were destroyed. The central government has pledged to do the cleaning up, but cars pose a special problem. Much of the debris is beyond being recognizable, but cars, even ones that no longer function, tend to be intact and thus are considered private property by local governments. They cannot simply be carted away as garbage. The process so far has been for tow trucks to bring the damaged vehicles to large lots where the owners can claim them and then sign a release allowing them to be scrapped.

However, in many cases the owners don’t even know where their cars are, so it is taking a long time to process all the junked cars being brought to the lots. For instance, hundreds of cars were parked at Sendai Airport when the tsunami struck, and afterward their owners came to look for them but couldn’t find them. Local governments have to somehow inform those people where the collected automobiles are being kept, and it’s time-consuming. But that’s not the end of the process. As one mechanic told TBS, before the car is scrapped and placed in a compactor, all the mud has to be removed from the interior. (Removing the gasoline isn’t a problem since it seems that in almost all cases thieves had already siphoned off the fuel when the tow trucks showed up.) Before scrapping, the engines are removed and can sometimes be recycled, but not in this case. Sea water effectively destroys automobile engines.

If anyone benefits from this aspect of the tragedy it is, of course, automakers. Since the eco point system ended last year, manufacturers have been looking for a means to boost sales, and now they have an instant customer base of hundreds of thousands of potential buyers. The central government is going to help with a bill that will provide certain tax exemptions for victims of the earthquake/tsunami. Any victim who purchases a car, either used or new, will not have to pay the automobile purchase tax; nor will they have to pay the regular car tax based on weight, which is due when you register the car and every time you bring it in for mandatory inspections. Already, there is a paucity of available vehicles for sale in the Tohoku region, a situation exacerbated by production fall-offs nationwide due to a shortage of parts that are made in the Tohoku region. However, today Toyota announced that it would resume car production on April 18. There’s no time to lose.

Earthquake insurance put to the test

Tuesday, April 5th, 2011

Though property insurance for damage caused by earthquakes is available in earthquake-prone Japan, there is, technically speaking, no such thing as earthquake insurance. Thanks to a deal struck by the national government and private insurers in the 1960s, individual homeowners who take out fire insurance policies can add a rider for earthquakes (which also includes tsunami and volcanos). Claims are paid out of a large fund that is maintained by the two partners, and according to the Nihon Keizai Shimbun this fund currently contains ¥2.3 trillion. The insurance industry projects that there will be about 500,000 claims filed for property damage, amounting to ¥1 trillion in payouts.

Damage assessed; next step, compensation (Yoshiaki Miura photo/The Japan Times)

So there’s enough money in the fund to cover at least private individual claims. However, when you look at the policies in detail these payouts will not be enough to recoup much of what was lost in the disaster. Available fire insurance policies(kasai hoken) for private homes cover up to ¥50 million if the entire home is destroyed (zenkai), and people can insure other property, such as furniture, for up to ¥10 million. However, earthquake insurance only covers 30 to 50 percent of what fire insurance covers. So if the coverage of your fire insurance policy is ¥10 million, you only receive from ¥3 million to ¥5 million when the home is destroyed in an earthquake. Moreover, damage insurance only covers the value of the home at the time of the accident or disaster, so if the value has decreased over time, you will only receive payments based on that lesser value. And fire insurance by itself usually does not cover a fire caused by an earthquake. You need coverage for both.

It’s assumed that the average payout in the Great Eastern Japan Earthquake for homes with coverage will be between ¥2 million and ¥3 million. The average damage insurance payout for the Great Hanshin Earthquake was a bit over ¥1 million per home. Altogether 65,000 claims were made for a total of ¥78 billion. At that time, only 9 percent of homes nationwide carried earthquake insurance, and only 3 percent of homes in Kobe did. Since then, the national portion has increased to 23 percent. In 2009 alone, 46.5 percent of homeowners who took out fire insurance added earthquake coverage. Not surprisingly, sales vary widely from one region to another based on frequency of temblors. In geologically active Aichi, Tokyo and Miyagi, as much as 30 percent of homeowners have earthquake insurance. The portion drops down to 15 percent in Gunma and Nagano prefectures.

One bright spot is that the utter destruction of the disaster may actually speed up the claims process. After the Hanshin earthquake the process took a long time because insurance companies had to assess the damage to properties in order to decide if they were “totally destroyed” (zenkai), “half destroyed” (hankai), or “partially damaged” (ichibuson). These are the only three categories for payouts and determine the amount of the payout. Because of the utter destructive power of the tsunami that destroyed much of the coastline of the affected area, the General Insurance Association of Japan, which represents all damage insurance companies, is assessing properties in a joint manner from the air, where it becomes apparent that all homes in a given area are zenkai. There is no need to check each property on the ground. In addition, policy-holders will not be required to bring in their policies to make claims, since so many lost documents in the tsunami. All they need to provide is identification. Even if a claimant forgets which company his policy is with, the association will find out.

Still, some policy holders could be in for a shock when they read the fine print. For instance, homeowners in Urayasu, Chiba Prefecture and other localities where houses were damaged by liquefaction may discover that their earthquake policies don’t cover that particular eventuality. But the Life Insurance Association of Japan has risen to the occasion. Most general life insurance policies don’t cover deaths from earthquake, but the association has said that its member companies will make an exception for the current disaster.

RSS

Recent posts