Natural Hazards pose the greatest risk to Bangladesh, the Philippines
and the Dominican Republic, according to a report by Maplecroft
A number of Asia’s most important
growth economies are at the highest risk from Natural Hazards, according to the
second Natural Hazards Risk Atlas released by industry research group
Maplecroft.
Countries are rated by Maplecroft
in accordance to the level of exposure to their cities and trading hubs in the event
of natural disasters such as flooding, earthquakes and tropical cyclones. The
study highlighted the economies of Bangladesh, the Philippines, Myanmar, India
and Vietnam in the top ten countries with the greatest proportion of their
economic output exposed to natural hazards.
In addition, these countries were
also judged to demonstrate ‘poor capability to recover’ from any significant
event exposing investments to risk of supply chain and market disruptions. This
could lead to business interruption costs and material damage to essential
infrastructure.
Knock on effects
Maplecroft’s study determined
that these knock on effects of a natural disaster could also exacerbate other
risks like societal unrest, food security, corruption and rule of law, potentially
leading to increased political risk.
“High exposure to natural hazards
in these countries are compounded by a lack of resilience to combat the effects
of a disaster should one emerge,” explained Maplecroft’s Head of Maps and
Indices Helen Hodge. “Given the exposure of financial and manufacturing
centres, the occurrence of a major event would be very likely to have
significant impacts on the total economic output of these countries, as well as
foreign business.”
The top countries at risk:
1. Bangladesh
2. The
Philippines
3. The
Dominican Republic
4. Myanmar
5. India
6. Vietnam
7. Honduras
8. Laos
9. Haiti
Weak resilience’
High levels of economic exposure,
coupled with weak resilience, means that the fallout of a large natural
disaster would likely be felt keenest in the top ten countries at risk. Impacts
in these exposed Asian countries are also heightened by their economic
fragility. Some of the highest risk countries have substantial economic
outputs, but they are fuelled by large, poor populations,
Countries with strong resilience
Japan, China, Taiwan and Mexico
are calculated to have the highest economic exposure to natural hazards in
absolute terms. However, huge economies like Japan have the capacity to recover
quickly from natural disasters due to entrenched resilience factors such as
economic strength, strong governance, disaster preparedness and established
infrastructure – things that are largely ineffective in the emerging growth
economies.
Maplecroft CEO Alyson Warhurst
stated “this presents an exciting opportunity for business to contribute to
reducing risk and thus to enhance their own security in the future economic
growth environment. As the middle classes grow in these emerging economies the
appetite for insurance will also grow, incentivising stronger disaster
preparedness.”
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