Need to Change Businesses’ Mindset towards Disaster Risks

“Casualties caused by the disaster in Vietnam have fallen by 8 percent for past 5 years, but economic losses tend to rise. This results from the businesses’ ignorance towards prevention, avoidance and adaptation of the natural disasters.” These remarks were made at the conference announcing the Global Assessment Report on Disaster Risk Reduction 2013 (GAR13) with the title of “From Shared Risk to Shared Value: The Business Case for Disaster Risk Reduction”, organised by the United Nations Development Programme (UNDP) in Hanoi recently.

Valuable experiences for Vietnam

According to reports, surveying 1,300 small and medium enterprises in cities in the US vulnerable to disasters, UNDP found that three quarters of enterprises had business interruption due to power systems, telecommunications, and water damage or inundation. Total annual average losses worldwide due to earthquakes are estimated at more than US$100 billion and US$80 billion by tropical cyclones. This represents the relationship of interdependence between the private sector and the public sector in management of disaster risks. Only 14.2 percent of the enterprises with less than 100 employees have basic approach to crisis management plans to maintain production.

Mr Jerry Velasquez, Regional Coordinator of the UN International Strategy for Disaster Reduction Agency (UNISDR) in the Asia – Pacific area, said that at least 50 percent of the direct damages from floods, earthquake and drought have not been fully assessed. Therefore, the report warned the business community about the economic losses related to the “out of control” disasters, which tends to increase if the disaster risk management does not become a major part of the investment strategy of the businesses.

According to Mr Nguyen Xuan Dieu, Permanent Member of the Central Committee for Flood and Storm Prevention and Control, said at the review conference of the National Strategy for Natural Disaster Prevention that after 5-years of implementation, human losses have been down 8 percent, but economic losses tend to increase. The main reason is that the businesses still underestimate the prevention, avoidance and adaptation to the natural disasters.

According to Mr Dieu, the GAR13 has provided important information and evaluation for policy makers. In particular, the experiences and lessons learned from developing countries affected by disasters are very useful for Vietnam. Currently, Vietnam has been building toolkits for teachers to train the community to prevent and avoid the risks and damages caused by natural disasters, disasters, and implement specific programs on planning, propaganda and training activities. On June 6, the National Assembly discussed the Law on Disaster Prevention, which highlights the roles of the community and businesses in the prevention of natural disasters. Mr Dieu also hopes that, with the introduction of the law, social work on disaster prevention would be more effective.

Need to anticipate risks before deciding to invest

According Mr Bakhodir Burkhanov, Deputy Country Director of UNDP in Vietnam, businesses often do not pay enough attention to the risk possibility of the investment decisions. The government is implementing disaster prevention strategies effectively, but businesses need to anticipate risks and provide information to investors.

However, Mr Bakhodir Burkhanov said that Vietnam’s challenges are to ensure that the information of disaster risks could be accessible and usable for the formulation of business strategies to mitigate out-of-control risks as to maintain business production. Therefore, businesses need to be more active in disaster risk management under the principles of common risks and values. This report raises the alarm that state-owned enterprises and private enterprises need to change the old mindset of investment decisions.

At the same time, Mr Bakhodir Burkhanov confirmed that UNDP will always join hands with cooperation and support programmes with Vietnam through specific activities such as sharing information, policy advice, and experiences and lessons learned from countries with similar conditions like Vietnam in building master plans to respond and reduce disaster risks, participating in discussions and cooperating in information sharing and supporting some of the risk management models which are being implemented in Vietnam to reduce risks, disasters, and catastrophes in Vietnam in the present and the future.

Quynh Anh

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