Economic effect of Japanese disaster on India, globe

The affected companies produce key components for computers, televisions, camcorders, DVD players and iPads. Now, the high-tech industry, which experts have seen as a key source of economic growth, contends with the prospect of a shortage. "There will be individual companies in the U.S. that are not going to be able to get their supplies for anywhere from weeks to months," Alexander, the Georgetown economist, said. "There certainly will be suppliers who are either out of business or have lost their capabilities for the moment." But even if these developments wound Japan's economy in the short term, the global consequences aren't likely to cause lasting economic damage, experts say. The Japanese economy, which is the world's third largest, has redundancy built in. When factories or power plants close, companies can turn to other facilities for supplies. Experts predicted that Japan's power grid, at least, would be restored within the next few weeks. Before the earthquake, suppliers in Japan were using resources at a level that was 15 percent lower than before the financial crisis of 2008, according to a report from the research division of Macquarie Capital Securities. That means there is some ability to transfer production to other facilities. The principally-affected region in the northeast of Japan accounts for about 4 percent of gross domestic product -- roughly equivalent to the output from the city of Kobe, which was hit by an earthquake in 1995. Experts say that the Kobe earthquake, though it temporarily devastated the local area, did not significantly harm larger economic trends. "If you looked at the macro data, you wouldn't even know there was such a destructive earthquake in Kobe 16 years ago," said Richard Jerram, head of Asian economics at Macquarie Research, who spoke by phone from Singapore. "It recovered very, very quickly." In terms of the magnitude of the earthquake, the current devastation is far worse than in 1995. But in economic terms, it won't significantly harm even the Japanese economy over the long term, experts say. The Japanese government has pledged various stimulus measures, and while the rebuilding process will be difficult, it's unlikely to cause lasting economic damage.