Quake recovery funds bring boom to Sendai


Just hearing the word "bubble," when applied to economics, is enough to make many Japanese adults cringe, as it stirs up memories of boom-and-bust period from the mid-1980s to the early 1990s -- when stock inflation set the whole nation off on a spending binge and it was party, party, party until the securities and real estate prices headed south.

Shukan Post reveals that seven months on from the catastrophic March 11 earthquake and tsunami, at least some parts of northeast Japan are already starting to spring back with a vengeance.

Stroll along the streets of Sendai's major drinking areas, and it's like 3/11 never happened. Pricy specialty restaurants serving tempura and sukiyaki enjoy full houses on consecutive evenings.

"I get the feeling things are back to normal," the manager of one shop tells the magazine. "Compared with this time a year ago, we're getting 1.5 to 2 times the numbers of customers. And they're spending more per head -- before, our 7,000 yen course was popular, but after the earthquake, more people are ordering our most expensive 15,000 yen set meals. And I understand that we're not the only ones; places where businessmen take customers on their expense accounts, like 'ryotei' (geisha houses) and drinking establishments are also full of customers."

The explanation for the boom seems to be that the companies contracted for the recovery have set up shop in Tohoku.

"Many of them work for general contractors based outside our prefecture," he remarks. "Just before they came here, we were getting lots of people from automotive-related businesses in the Kanto region."

The tsunami of money flowing in has also meant a windfall for women working in the water trade in entertainment areas like Sendai's sprawling Kokubun-cho.

"Previously, Sendai people didn't spend a lot of money at cabaret clubs. But after the earthquake, more people have been coming from outside the prefecture, and it's common for them to order a bottle or two of Dom Perignon," says one hostess. "When I accompanied a company president from Kansai, he bought me a 70,000 yen cosmetics pouch and a pair of new shoes for 20,000 yen, and then on top of that, he handed me 30,000 yen in cash, saying, 'Get yourself a beauty treatment or have a tasty meal.'

"And a businessman from Tokyo invited three or four hostesses to accompany him to an onsen. Since that's never happened before, I guess you can conclude that business must be pretty good," she chuckled.

A survey by an association of Sendai department stores found that sales turnover rose for four straight months from June, and were also up 6.8% year-on from 2010 -- as opposed to a 1.7% nationwide average decline during the same period.

Sales of pricy watch brands such as Rolex were said to have doubled. Some people appear to be spending their insurance payouts, but there's another aspect to the outlays.

"Since you only live once, people now are springing for expensive cars in the 5 million yen class, as if they're bent on enjoying just one thing in their lives," a dealer of imported cars tells Shukan Post.

Numerous couples are also tying the knot with expensive engagement rings, and men are also buying gifts like designer handbags for their wives as anniversary gifts.

The value of real estate properties in Sendai suburbs has also soared, with price per tsubo of land reportedly up fivefold -- a jump not seen in Japan since bubble era of the late 1980s.

"Losses from the March 11 damage exceeded the 1995 Hanshin Earthquake by twofold, and it was expected that the pace of recovery would be slow," says Taro Saito, a senior researcher at the NLI Research Institute. "But the supply chain achieved recovery within one month and economic activities have been faster than anticipated.

"While the recovery might still be affected by concerns like the current crisis in Europe, if the Japanese government can allocate a budget of 10 trillion yen, I think we can count on even better results."

© Japan Today

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Excellent news

-3 ( +1 / -4 )

Unemployment in the disaster zone is more than twice the national level. Jobs are hard to find only offering minimum wage or require a free probation period of 1-3 months. I know university educated people in Miyagi working for less than ¥1,000 per hour.

Most of the temporary homes were built by Tokyo based companies with imported labor.

1,000's have lost their houses, cars and everything they owned. They will still be required to pay any mortgages or car loan payments.

The cost of the nuclear disaster will be $250 billion. For that, it would have bought 123 Fukushima size plants using geothermal energy.

The entertainment trade may benefit from a boost in trade, the other people are still suffering.

-1 ( +3 / -4 )

So that's where a lot the donated reconstruction money will end up, siphoned off to bars and clubs and hostesses as marketing expenses, as the construction companies vie for contracts...

-1 ( +0 / -1 )

"The value of real estate properties in Sendai suburbs has also soared, with price per tsubo of land reportedly up fivefold": this is complete nonsense, land prices are not noticeably different. The flat below ours has been on sale for months, the price has recently been reduced by a few million Yen and still no-one buys.

I heard that the insurers were paying out large sums and were hardly questioning claims. That can explain the rise in retail sales. We didn't have insurance so no windfall for us.

1 ( +2 / -1 )

So that is where our taxes are going.....?

-1 ( +0 / -1 )

Personally this news sounds fantastic. My boyfriend lived right outside of Sendai for years before he moved south so we could be together, we were offered a volunteering spot to help in Sendai shortly after the disaster, and he refused, instead we went to Fukushima... he said it would just be far too painful to see what had become of his former home. Now upon reading this article about how some businesses are doing even better than before, he nearly cried.

We are both so happy to hear that things are looking up for that area, it is a very well deserved break for the people of Tohoku. Gambate <3

1 ( +1 / -0 )

I was just in Sendai the other day and this story is correct. Everything was jumping and everyone was smiling and shopping. I saw no evidence of the disaster whatsoever in people's faces. There was a late-model Maserati, a new Aston Martin, and a vintage Ferrari on the streets. Somebody is making money here in Tohoku (unfortunately not me). And I had to comment to my coworkers that Japan should be proud of it's ability to bounce back from this historic tragedy. Zichi is right to point out that much work needs to be done, but if this had happened in America, the situation would still be Katrina-style desperate even after 7 months. I have friends in Rikuzentakata and Kessenuma who lost everything, yet they are moving forward with resolve and stoicism that is hard for me to imagine considering what they have endured. Are they ready to party like in Sendai? No, not just yet. But the crying is over and hands are busy and the healing has begun and life goes on.

2 ( +2 / -0 )

....and what of radioactive fallout and contamination? This is the real disaster in Japan. The tsunami was the just beginning. People want to simply forget what is happening now but it cannot be forgotten.

-2 ( +0 / -2 )


most of the radiation fall was in Fukushima and south. Miyagi and Iwate were spared most of it.


thanks for the encouraging comment and close quarter info. I'm helping some Miyagi people with their recovery.

0 ( +3 / -3 )

Sounds good, but I believe this is temporary relief to deeper hurt that will become more evident as time goes by. I've been traveling to Tohoku from Tokyo since the first week as a volunteer. The loss is unfathomable for most people directly affected by the disaster. Dinner, drinks, entertainment...these can help calm the mind, but something longer lasting is needed. Hope. We have to continue loving on the people of Tohoku...

0 ( +0 / -0 )

It is a good news that people start going out again and economic activity is recovering.

However, it is suggested that recovery funds given to companies are funneled into hostess bars and various entertainment costs. It is one thing for a company to allow such use of corporate funds (it just shows a lack of proper corporate management), it is another thing to use emergency recovery money for such use.

Public money (which means our taxpayers money) is used not to reconstruct infrastructure and provide some emergency relief funding to refugees, but to pay for hostess bars and Don Perignon bottles.

Another proof that a real recovery (based on solid economic foundations) will not result from unlimited public money (which will create bubbles and artificial short-term activity) but from private investment and sustainable economic activity.

If I was in charge, I would severely limit recovery funds to emergency measures (refugees, roads and basic infrastructure) and work to provide attractive conditions for businesses to come to the area:

creation of Special Economic Areas (tax free, free trade zone, etc...) in disaster-struck prefectures

no red-tape, no tax for these areas
0 ( +0 / -0 )

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