Engaging Asia’s Private Sector in Disaster Risk Management

September 17, 2014

By Lisa Hook

Heavy monsoon rains in Pakistan and India since early September have resulted in some of the worst flooding in decades, requiring immediate relief response, as hundreds of people have already lost their lives and millions more are affected. But as the flooding subsides, the impact will be felt for years to come. Those affected include not only families and communities, but businesses as well – mostly small- and medium-sized enterprises that provide essential income for community members. For example, SMEs in Pakistan make up nearly 90 percent of all enterprises in the country and constitute approximately 40 percent of annual GDP. India’s 1.3 million SMEs account for 40 percent of India’s total exports.

In disaster-prone Vietnam, where The Asia Foundation is working with SMEs to improve disaster preparedness programs, these enterprises make up more than 90 percent of the domestic private sector and employ almost 80 percent of the population. The ability of local businesses to quickly recover from natural disasters and re-establish production is a critical determinant of both local community and the country’s resilience to disasters. However, within the current matrix of disaster risk management efforts, businesses do not yet play as substantial a role as their potential for loss would indicate.

This gap in engagement of the private sector in disaster risk management (DRM) initiatives was one major focus of discussions in Bangkok this week at The Asia Foundation’s forum on DRM in the ASEAN region. The two-day forum brought together 35 disaster risk management experts representing government, civil society, the private sector, and academia, together with technical specialists who shared good practice models drawn from the Pacific, Europe, and the Americas to examine the need for a prepared and coordinated approach for effective response and recovery, including for businesses.

ASEAN’s Disaster Risk Management advisor, Dr. Marqueza Reyes, discussed ASEAN’s role in serving as a regional coordinator for DRM initiatives through the ASEAN Agreement on Disaster Management and Emergency Response (AADMER). AADMER is a regional framework for cooperation, coordination, technical assistance, and resource mobilization for all aspects of disaster management. While the initiative works closely with 10 regional governments that have ratified the framework, and has partnerships with numerous non-governmental organizations, Dr. Reyes warned about the lack of private sector engagement.

This hits particularly close to home in Thailand, where the manufacturing sector and smaller enterprises were extremely hard hit by the 2011 flooding. Asian Disaster Preparedness Center’s (ADPC) project assistant, Chanidabha Yuktadatta, explained that as a result of the 2011 floods in Thailand, 90 percent of the total $45 billion loss – one of the worst global economic losses in contemporary history – was borne by the private sector.

As a result of the 2011 floods in Thailand, 90 percent of the total $45 billion loss – one of the worst global economic losses in contemporary history – was borne by the private sector. Photo/Arpaporn Winijkulchai

However, nearly all (99.5%) of the private sector in Thailand consists of SMEs, none of which have implemented standardized business continuity plans. The flooding also caused significant damage to Honda combined manufacturing operation, because many of the company’s suppliers were located in the flooded areas of Bangkok. As a result, production was shut down for three months, causing significant loss to the company. In a separate meeting with The Asia Foundation, A.P. Honda group of Thailand noted how the company recognizes the importance of their engagement in DRM, and described some of their efforts to support disaster preparedness in anticipation of future events.

For example, the company has partnered with the Department of Disaster Prevention and Mitigation (DDPM), under the Ministry of Interior, Thailand’s government agency responsible for disaster management activities, to donate Honda vehicles for emergencies, and train local communities on best practices such as CPR for disaster risk management.

Similarly, Google-Thailand’s head of Public Policy and Government Affairs, Dr. Phichet Rerkpreecha, described the company’s crisis response efforts, highlighting an example of how the private sector is engaging in DRM. Google, building on its capabilities to connect individuals through the internet at a global scale, helps to provide emergency information, communication, and coordination during a disaster, while also building on its data visualization tools to make information during a disaster more useful and actionable.

While the current focus in Pakistan and India needs to focus on relief efforts and immediate humanitarian response, as the emergency moves toward recovery efforts, engagement by all stakeholders will be key for a comprehensive approach. Moreover, many of the discussions on private sector engagement at this week’s forum will provide valuable support for the recovery efforts in flood-affected areas of Pakistan and India.

Lisa Hook is a senior program officer for The Asia Foundation’s Environment Programs in San Francisco. She can be reached at [email protected]. The views and opinions expressed here are those of the individual authors and not those of The Asia Foundation.

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