Japan's Road to Recovery: Thanks, Guarded Optimism

Ten weeks after the devastating earthquake in Japan, there was a sense of thankfulness and optimism for Japan’s recovery at the Japan Society’s Annual Dinner Gala this week.

Thanking a crowd of 700 at the Waldorf Astoria, Japan Society President Motoatsu Sakurai announced that through the society's Japan Earthquake Relief Fund, 18,000 donors contributed $7.8 million to help non-profit organizations deliver aid directly to the affected areas in Japan.  With CNBC’s Maria Bartiromo as Master of Ceremonies, and Morgan Stanley’s CEO, James Gorman, as keynote speaker, the evening’s event itself raised $1.5 million.

Bobby Valentine, a former major league baseball player and manager, and now an ESPN analyst, accepted the Japan Society Award.  “I’m the only guy to manage teams in the American, National and Pacific leagues,” he said of his tenure with the Texas Rangers, the New York Mets and the Chiba Lotte Marines in Japan. “I’m also the only guy to be fired in the American, National and Pacific leagues.”  FYI, after being fired by Chiba Lotte, he was rehired years later, and led the team to a Japan Series Championship.

Outside this event, so many individuals and corporations acted fast to close the gap between resources and humanitarian needs. Scores of companies - including NYSE Euronext – and their employees have made contributions totaling millions of dollars and supplies to the Japan relief effort, just as they have provided aid to those affected by the Haiti earthquake in 2010, China’s Sichuan province earthquake in 2008, and the Indian Ocean Tsunami in 2004, among other global disasters.

Help goes both ways: companies and employees worldwide rushed to contribute millions in dollars and specialized equipment to the American Red Cross and other agencies to support 9/11 rescue and relief efforts in New York.  I remember when Japan’s Advantest Corporation became the first company to list on the NYSE in the wake of 9/11.  "This city and this country have demonstrated remarkable resilience in the face of adversity, and our confidence in the NYSE as the center of both the U.S. and the world's equity markets is unwavering," said then Chairman & CEO, Hiroshi Oura in a press release.

In terms of Japan’s economic recovery, there is reason for optimism. The latest economic outlook report of the Organization for Economic Co-operation and Development (OECD) forecasts that Japan's economy will see a strong recovery in the second half of this year – with growth rates of 5.3% and 3.5% in the third and fourth quarters - as supply chains are re-established and recovery spending helps spur growth. For 2012, OECD expects Japan to return to a modest growth pattern of 2.2%.

The Bank of Japan Governor, Masaaki  Shirakawa, recently commented:  "It might not be a V-shaped recovery but there is a good chance we will feel a stronger sense of a recovery in the latter half of the current business year."

But changes are afoot, and the road to recovery looks different than it did just before the disaster. Japan had long considered nuclear power as the centerpiece of its energy sufficiency strategy, and aimed to have nuclear power to meet half of its energy needs by 2030. Now that’s not going to happen, and expect Prime Minister Naoto Kan to announce at this week’s Group of Eight summit in Deauville, France, a “Sunrise Plan” to promote use of renewable energy sources. The plan reportedly will include installation of solar panels on all suitable buildings and homes in Japan by 2030. While economics is only part of the big picture, the energy issue is critical to a sustainable Japanese economic recovery.