Evan, it’s ten days since the tragic events in
Well you need to distinguish between two different things, and people often blur the two and it creates confusion. There’s the amount of activity that will go on in
If you destroy somebody’s house, you have a lot of activity when you rebuild it so the GDP figure may not suffer, the GDP figure could conceivably over some period actually go up because you’ve now got to build an extra house that is no longer there. So the GDP figure doesn’t tell you everything that’s going on. But of course, there’s still been a welfare loss, that somebody was without a house for a period, and at the end of the whole thing when you’ve rebuilt the house they're only back to where they'd started. So what you’ve got is you’ve got to think about what is the damage that’s been done to people’s material welfare and what is happening to the activity going on in the economy, and those are not the same thing.
And my own expectation is that what you'll see is a huge dip in Japanese economic activity because work stopped in a large part of the country for several days, work has been affected by other parts of the energy industry and the energy sector, so you'll see a huge dip in Japanese activity followed by an enormously strong rebound as the reconstruction work starts. There’ll be lots going on, the Japanese will be very busy. That won't mean that the Japanese economy in some way is delivering higher living standards or better lives for Japanese people, because of course there’s been a huge welfare loss to the Japanese population through the destruction of their property. So you must separate out activity levels, that’s quite interesting, but what really matters to people is how well they're living, and the activity levels will be showing a much better picture than how people are really living I think.
There’s a great deal of uncertainty about the global economy, I wonder what you think about the Japanese rebound will contribute to rebalancing the global economy?
I think it’s going to have a rather small effect, to be absolutely honest. I think - here’s what I think it does, is it does contribute and it contributes as follows. The Japanese - think of the world economy as being these two halves, countries that are saving a lot and exporting a lot and countries that are not saving so much and haven’t been exporting very much.
Closer to home, there’s a real challenge for the authorities in rebalancing the
I mean I think first of all it’s worth saying that one thing the tsunami and earthquake tell you is to think about disaster preparedness, and for the really unexpected disasters, could you survive? How badly affected would you be if you had to take a 20% cut in income? I mean what resilience do your systems have? I mean I'm sure people all over the world, particularly in nuclear power stations, are asking themselves questions like that at the moment.
What would happen if
So I think sometimes around the BBC, which matters more to the BBC, the buildings and the equipment or the people involved at the BBC? I'd like to think it’s predominantly the people that matter, and even if you took out all the physical operations in London, you know, we could probably buy quite a lot of the equipment, hopefully with a bit of good insurance, we could go and buy on the world market a lot of that equipment, replace it and be back up and running quite quickly. Now this is perhaps a very optimistic point of view and I'm not sure it’s right, but in some ways I think the human capital businesses tend to be more resilient than the physical capital ones.
In terms of the rebalancing of the
Thank you, Evan.