Essay on About Communication

1447 Words Jun 13th, 2015 6 Pages
Economic Research
Macro Commentary

THE JAPANESE EARTHQUAKE:
ECONOMIC IMPACT ON VIETNAM

March 2011
Vietnam

Alan T. Pham, PhD
Chief Economist

I.






II.

Background
On Mar 11, 2011 an earthquake measured at 9.0 on the Richter scale struck the Sendai region in north east Japan. It was followed by a tsunami wave that hit the shore, causing widespread damage and loss of life.
At last report, the number of deaths was put at 6,000. Total damages were estimated by insurance companies at more than USD300 bn.
This number is sure to increase as a more careful survey of the devastated areas is made by insurance agents.
Capturing most of the headlines was a radiation leak at the Fukushima
Dai-Ichi nuclear
…show more content…
Insurance companies also sell some foreign investments to bring back money for paying claims.
There is a short term decline in Japanese demand for oil due to lower industrial production activity in-country. Japan’s trade balance would tend to improve, boosting the yen. A fall in Japanese oil demand can soften the world price of crude, further reducing the country’s oil import bill.
The BOJ reaction was typical of any central bank in a case of national emergency: it flooded the market with liquidity to ensure that all business operations can carry on normally. It stands by to continue this assistance as long as necessary.

Economic Research

III. Implications for Vietnam
1. Impact on ODA flows - FDI and FII investment programs.


There would be minimal impact on ODA programs. Compared to the whole budget of this country, such programs are small. Japan has a major role to play in Asia over a long term, and would fulfill its obligations under these bilateral aid programs.



In 2010, Japan committed USD2.2 bn or 12% of the total ODA amount decided at the CG
(Consultative Group) meeting in HaNoi. The magnitude of this commitment would likely remain intact. We note that a rising Yen can increase the DSC (debt service charge) on ODA loans from Japan. VN will need to get USD to buy Yen for this purpose (the dong being inconvertible vis a vis the Yen).
With the VND depreciating against both currencies, the debt

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