Increasing the resilience of Asian supply chains to natural disasters: the role of the financial sector

ERIA Discussion Paper 2016-08:

This paper considers steps that member countries of the Association of Southeast Asian Nations can take to develop a resilient financial sector and thus be better prepared for the earthquakes, typhoons, tidal waves, and other catastrophes that buffet the region.

Key insights from the paper include:

• The financial sector is a part of the vital infrastructure of the economy in ASEAN countries and can play an important role in mitigating the economic dislocation caused by natural disasters.
• Resilient financial institutions can ease anxiety and maintain confidence following a disaster.
• Robust insurance markets provide funds for reconstruction and are an efficient way to prepare for catastrophes.
• Deep and efficient bond markets allow governments to finance expenditures for emergency relief at lower cost.