Japan quakes reveal again vulnerability of regional supply chains

Tokyo

A FEW days after a massive earthquake and tsunami devastated large areas of North-east Japan in March, 2011, then president of the Asian Development Bank (ADB) and now governor of the Bank of Japan (BOJ) Haruhiko Kuroda warned about the dangers of natural disasters crippling Asian and even global production chains in which Japan is a key link.

That warning, issued in an interview with The Business Times, is echoing again now as key Japanese manufacturing giants such as Toyota, Honda, Sony, Mitsubishi Motors and others once more stop or reduce output after two further quakes claimed scores of lives and left thousands injured in the southern Japan manufacturing hub of Kyushu. "The earthquake in Kyushu has demonstrated once again that modern supply chains are vulnerable to disruptions from natural disasters," ADB chief economist Shang-Jin Wei told BT on Monday.