A walk along a favourite beach on the Miura peninsula recently offered the usual stunning tableau of the Japanese seaside in winter: horses thundering along the empty dunes, racks of daikon drying under the chilly sun and rank after rank of 12-ton concrete blocks being craned into the lapping surf.
For all its ugliness, this third activity does not encounter much public pushback. With decades of practice, and backed by the inarguable frequency of quakes, tsunamis and typhoons, Japan’s local and central governments have thoroughly convinced generations of taxpayers of the need to defend the island nation’s coastline with ever higher and thicker dollops of concrete.
Collectively, these nationwide ramparts may provide Japan with a formidable physical and psychological shield. The pandemic, though, has begun to expose some fragility in all that strength.
Perhaps the most visible expression of Japan’s historic self-encirclement instinct are the tetrapods — the stumpy concrete caltrops that were originally designed in France and appear around the world, but with which Japan has had a peculiarly long and intense love affair. Equally unsightly fortifications continue inland, drawing societal gratitude or indifference as the concrete is splashed over river beds, hillsides and anything else that might fatally give way when nature gets destructive.
The creeping public reassessment of all this lies in the terms used to justify Japan’s permanent outlay on physical defence against the elements: “national resilience”.
In a recent article, Daniel Aldrich of Northeastern University explained the political instinct that sucks Japanese policymakers towards physical infrastructure and megaprojects. They are tangible symbols of “doing something” in a country that averages a new prime minister every two years; the cost-benefit analysis of concrete is more straightforward than alternative, non-physical projects; the construction industry is a powerful lobbyist. So, while national resilience may appear defined by big, long-lasting things made of concrete, there is short-termism throughout the mix.
Sure enough, not long after he had got his feet under the desk as prime minister last year, Fumio Kishida made a grand policy speech that put national resilience among his highest priorities. Delivered shortly after a landslide had swallowed part of a mountain resort town and an underwater volcano had clogged Okinawan ports with slicks of pumice stone, the disaster preparedness oratory wrote itself.
The speech was of instant interest to investors. Several of Japan’s largest online brokerages rank the investment themes that their customers are pursuing. The top three places are generally filled with the kind of buzzy, growth-centric ideas like electric vehicles, solid-state batteries and the metaverse that get markets excited. Just after Kishida’s speech, “national resilience” joined the podium.
The stocks associated with this theme offered online investors a journey into some intriguing but unlovable nooks of the Tokyo market — a land of wave-dissipation manufacturers, bridge re-enforcers and slab-makers that growth and governance appeared to have largely forgotten.
But interest soon wore off. The problem made so very clear by the pandemic is that the concept of national resilience no longer means quite what it did two years ago. Although Japan has managed to reach this point in its battle with Covid-19 with a far lower death toll than many other countries, some fundamental vulnerabilities have been revealed. None of them, critically, are fixable with concrete or civil engineering projects.
Equity investors have been among the first to see the power of this psychological blow. Japan’s great pharmaceutical and biotech companies may eventually deliver great breakthroughs on the virus. Two years into the pandemic, though, their relative silence on vaccines and treatments is deafening and, on a gloomy viewing, symptomatic of an industry and research complex losing its innovative verve. Japan’s vulnerability to global semiconductor shortages — once unthinkable in a country that dominated their production — has mounted another particularly painful challenge to the Japanese sense of national resilience.
In the final lines on the subject during his policy speech, Kishida nodded to all this with a call for a strengthening of Japan’s science and technology capabilities and industrial competitiveness. That, of course, is hugely desirable but it will take extraordinary long-term commitments before it delivers any permanent sense of security. Far quicker and easier to lower another tetrapod along the Miura beach.