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Disaster management officials from APEC member economies have voiced support for the introduction of financial incentives to spur emergency preparedness among businesses in the Asia-Pacific as the risk of shocks to trade and growth rises in the world’s most natural disaster hit region.
An incentives-based approach was backed by officials over mandatory measures during a public-private sector meeting in Bangkok to promote business continuity planning. Focus is on lifting the low adoption rate by small and medium enterprises which account for more than 97 per cent of businesses, 60 per cent of GDP and over half of employment in APEC economies.
APEC economies are hit by more 70 per cent of the world’s natural disasters and suffered USD68 billion annually in related costs from 2003 to 2013. But just 13 per cent of small and medium enterprises in the region have business continuity plans in place which involve raising disaster risk awareness, identifying vulnerabilities and organizing teams to address them. This gap leaves the sector more susceptible to business disruptions, financial losses and bankruptcy.
“Possible financial incentives to encourage small and medium enterprises to adopt business continuity plans include tax cuts, reduced insurance costs and lower interest rates to help them overcome the initial investment of setting up their plans,” said Natori Kiyoshi, who is also Co-Chair of the APEC Emergency Preparedness Working Group. “There is no one-size-fits-all approach given variations in economic and financial conditions among the region’s economies.”
Senior Disaster Management Officials and Small and Medium Enterprise Ministers from APEC member economies will meet on 22-23 September and 25 September, respectively, in Iloilo, the Philippines to gauge the progress of these measures and take further policy steps to strengthen disaster resilience within the sector.