The Financial and Fiscal Impacts
The Great East Japan Earthquake (GEJE) occurred against the backdrop of a struggling economy and public finance system under stress, implying an exceptional fiscal cost and imposing a fiscal management challenge to the Government of Japan (GoJ). In...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/18027462/financial-fiscal-impacts http://hdl.handle.net/10986/16165 |
| Summary: | The Great East Japan Earthquake (GEJE)
occurred against the backdrop of a struggling economy and
public finance system under stress, implying an exceptional
fiscal cost and imposing a fiscal management challenge to
the Government of Japan (GoJ). In response, the government
committed to a full-scale national initiative that has
evinced its ability to quickly mobilize short- term
liquidity but leaves in question its reliance on debt
issuance and taxation measures to finance longer-term
reconstruction. This note examines the fiscal costs of the
event, the financial measures taken by the GoJ to fund these
expenses, and the fiscal implications of these actions.
Lessons learned and recommendations for developing countries
are distilled from this discussion. In the aftermath of the
event, the GoJ announced a full-scale national response in
which the government would support: 1) rebuilding
disaster-resilient regions, 2) restoring the livelihoods of
the disaster-affected population, and 3) reviving the local
economy and industry. To finance this approach, the GoJ
mobilized a portfolio of fiscal measures that minimized the
financial burden on local governments, residents, and
industry but significantly increased the financial burden of
the central government, and thus, indirectly, of the current
and future Japanese population and economy. |
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