SME disaster preparedness discussed in APEC forum

disaster-preparedness-planning-ahead

How small and medium enterprises (SMEs) can improve their disaster preparedness was one of the major concerns discussed in the recently-concluded APEC disaster management officials meeting held in Thailand.

“Small businesses play a significant role in the international production and trade of goods … but their disaster risk exposure remains disproportionately high,” APEC Emergency Preparedness Working Group Co-chair Li  Wei-sen said.

He added that the knock-on effects of small business disruptions or shutdowns can be substantial, given the increasingly globalized nature of production and trade, as earthquakes, floods and natural disasters that have recently occurred in the Asia-Pacific region have shown.

It was noted that despite their vulnerability, only 13 per cent of SMEs have adopted contingency plans for business continuity in case calamity strikes.  These plans include disaster risk awareness, identifying weaknesses, and organizing teams to address them.

Thus, small business are more likely to succumb to business disruptions, financial losses and bankruptcy during times of disaster.

Natori Kiyoshi, the other Co-chair of the working group, suggested incentives to encourage small and medium industries to adopt preparation programs for disaster such as tax cuts, reduced insurance costs, and lower interest rates.

It was, however, noted that continuity planning cannot be compelled as many governments lack resources for adoption.

The concern derives from the fact that APEC economies are affected by about 70 percent of the world’s natural disasters.  From 2003 to 2013, these countries suffered losses of $68 billion yearly as a result of the disasters.