Japan Reconstruction May Take 5 Yrs: World Bank

Japan may need five years to rebuild from the catastrophic earthquake
and tsunami that has caused up to $ 235 billion of damage, the World
Bank said on Monday.

The March 11 disaster which ravaged northeastern Japan will likely
shave up to 0.5 percentage point from the country's economic growth
this year, the bank said in a report. The impact will be concentrated
in the first half of the year, it said.

"Damage to housing and infrastructure has been unprecedented," the
World Bank said. "Growth should pick up though in subsequent quarters
as reconstruction efforts, which could last five years, accelerate."

Japan reconstruction may take 5 yrs: World Bank

The bank cited damage estimates between $ 123 billion and $ 235
billion, and cost to private insurers of between $ 14 billion and $ 33
billion. It said the government will spend $ 12 billion on
reconstruction in the current national budget and "much more" in the
next one.

It said a crippled nuclear power station in the northeast that
authorities are racing to regain control of is an unfolding situation
that poses uncertainties and challenges.

Traces of radiation first detected in spinach and milk from farms near
the nuclear plant are turning up farther away in tap water, rain and
even dust. In all cases, the government said the radiation levels were
too small to pose an immediate risk to health.

A short-term drop in Japan's consumer demand and manufacturing
production will also hurt trade with regional neighbours, the bank
said. South Korean electronics companies have seen the price of some
memory chips from Japan rise 20 percent because of disrupted
production, while Thai car exporters may run out of Japanese auto
parts next month, it said.

"Disruption to production networks, especially in automotive and
electronics industries, could continue to pose problems," the bank
said. "Japan is a major producer of parts, components and capital
goods which supply East Asia's production chains."

Japan's northeast, the epicentre of the disaster, is home to ports,
steel mills, oil refineries, nuclear power plants and manufacturers of
auto and electronics components. Many of those facilities have been
damaged, while nationwide power shortages have severely crimped auto
and electronics production.

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