Creating Resilient Societies
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1 Creating Resilient Societies HIGH-LEVEL ASIA-PACIFIC POLICY DIALOGUE ON THE IMPLEMENTION OF THE ISTANBUL PROGRAMME OF ACTION FOR THE LEAST DEVELOPED COUNTRIES FOR THE DECADE March 2015 Siem Reap, Cambodia Clovis Freire Economic Affairs Officer Macroeconomic Policy and Development Division (MPDD) Economic and Social Commission for Asia and the Pacific (ESCAP) Main Messages Building resilience is key to face multiple, simultaneous/ sequential, increasingly large shocks that the region is confronted with -- and this is the new normal for the region At the centre of this effort is a diversified and inclusive economy that is able to adapt to shocks and preserve jobs, and an equitable society that empowers people to be better able to absorb and adapt to shocks 1
2 Complex crises Multiple, simultaneous/sequential Spatial Areas Temporal Rates, Durations and frequencies Jurisdictional Administrations Cross-scales and crosslevels Interactions Slow Long Globe Regions Decades Annual Intergovernmental National Countries Seasonal Provincial Cities Daily Localities Fast Short Source: ESCAP based on Cash, David W., W. Neil Adger, Fikret Berkes, Po Garden, Louis Lebel, and Per Olsson (2006). Scale and Cross-Scale Dynamics: Governance and Information in a Multilevel World. Ecology and Society 11 (2): 8. Asia-Pacific has not been a breeding ground for financial crises, but is vulnerable to them 40 Number of financial crises starting in a given year, period Asia-Pacific Other regions Source: ESCAP based on data from Laeven and Valencia (2012). Note: Financial crises include systemic banking crises, currency crises, and sovereign debt crisis. 2
3 Increased interconnection of trade makes the region vulnerable to shocks - Fail of one node causes disruption in the supply chain Source: ESCAP World exports of merchandise goods ($ trillion) Capital goods Consumption goods Intermediate goods Other goods Source: ESCAP 200 Number of disasters by region ( ) - Asia-Pacific is the most disaster prone region in the world Asia Pacific Africa Latin America and Caribbean North America Europe People affected (per 1,000 population) People affected - and the most affected Asia Pacific Africa Latin America and Caribbean North America Africa Latin America and Caribbean North America Asia Pacific Europe Europe ,000 1,000,000 1,500,000 2,000,000 2,500,000 Source: ESCAP based on data from EM-DAT: The OFDA/CRED International Disaster Database 3
4 For small island countries, damages could be multiples of an economy s size Economic damage (% GDP) Samoa "Storm Val" (1991) Tonga "Storm Waka" (2001) Vanuatu "Storm" (1985) Solomon Islands "Tropical Cyclone Namu" (1986) Fiji "Storm Eric" (1985) Papua New Guinea "Volcano Rabaul" (1994) Source: ESCAP based on data from World Bank s World Development Indicators and EM-DAT: The OFDA/CRED International Disaster Database. Uneven exposure, vulnerability and risk of disasters 4
5 Resilience is: the ability to Quickly bounce back and restore its stable equilibrium after stresses, ensuring lesser risks and disturbances from given shocks Mitigate disruptions and reconfigure from shocks so as to maintain the system functioning Reorganize and transform in order to respond to crises, absorb their impact and maintain its core purpose Objects Systems Complex systems Resilience is the capacity of countries to adapt to dramatically changed circumstances, caused by major economic crisis and natural disasters, to enable their people to adapt to these shocks and continue to lead the kind of life they have the reason to value 5
6 people should be at the Centre Development is the expansion of the of capabilities that a person has, while poverty is the deprivation of capabilities. Resilience is related to the capacity of people to adapt to shocks and maintain or expand their of capabilities. 6
7 economic activities x1 x2 x3 xn Over which the person can establish ownership and command (related to income) How the person make a living economic activities x1 x2 x3 xn 7
8 Capital-embodied technologies (infrastructure, machines) Labour-embodied technologies (methods, processes) economic activities x1 x2 x3 xn Capital-embodied technologies (infrastructure, machines) Labour-embodied technologies (methods, processes) economic activities x1 x2 x3 xn Environment 8
9 x1 x2 x3 xn Environment Resilience is related to the capacity of people to adapt to shocks and maintain or expand the of capabilities (opportunities to achieve) x1 x2 x3 xn Environment Which requires the maintenance or expansion of the of goods and services of which she can establish ownership or command, and which is very much related to the capacity to maintain or increase her income 9
10 Major economic crisis and natural disasters affect the economy by disrupting the network of technologies x1 x2 x3 xn Environment Which requires the maintenance or expansion of the of goods and services of which she can establish ownership or command, and which is very much related to the capacity to maintain or increase her income Major economic crisis and natural disasters affect the economy by disrupting the network of technologies x1 x2 x3 xn Environment Which requires the maintenance or expansion of the of goods and services of which she can establish ownership or command, and which is very much related to the capacity to maintain or increase her income 10
11 Shock 1) By measuring the size of the network of technologies. Bigger networks are better able to adapt and to continue to produce the inputs of the capability x1 x2 x3 xn Environment 2 ) By measuring the inclusiveness of the social context. More inclusive society would empower people to make the most out of their capability inputs to adapt to shocks - Asia-Pacific has, on average, lower resilience than other developing regions, except Sub-Saharan Africa - Large differences across subregions Index of intrinsic resilience Asia-Pacific Latin America and Caribbean Europe in transition Sub-Saharan Africa West Asia North Africa Index of intrinsic resilience North and Central Asia Pacific South-East Asia South and South-West Asia East and North-East Asia 11
12 Economic resilience component (Economic complexity index) Intrinsic Resilience SOM TCD COD GNB AFG CIV MOZ BFA AGO CMR SLE MLI GIN CAF NER GNQ BEN NGA BDI COG TGO YEM LBR DJI MRT COM PAK UGA Lower resilience ZWE KEN TZA GHA SEN ETH GAB MWI PNG STP GMB IND ERI MDG TJK NPL TLS MMR BOL LAO IRQ RWABTN ZAF UZB AZE KHM KIR MAR CHN BEL NLD ESP AUT CAN DNK SWE AUS KOR CZE POL FIN TUR MEX BRA THA NOR IRL MYS ISR RUS HUN ARE NZL PRT IDN ARG SVK ROU GRC SVN BGR UKR PHL VNM LTU EST COL CHL HRV PER LVA EGY PAN SAU IRN TUN GTM LBNLKACRI CYP BLR URY BIH ISL ECU MKD DOM SYRVEN MUS TTO MLT ATG JOR KAZ HND BHRQAT BRBSLV GEO KWT OMNMDA DZA ARM ALB AND FJI JAM SUR GUY SLB TUV Higher resilience NIC PRY KGZ MNG LBY BHS BLZ BRN SYC DMA NIU MDV LCA COK GRD MHLWSM VUT Social resilience component (social context index) CPV PLW TON USA GBR DEU FRA CHE JPN ITA CUB Main Messages Building resilience is key to face multiple, simultaneous/ sequential, increasingly large shocks that the region is confronted with -- and this is the new normal for the region At the centre of this effort is a diversified and inclusive economy that is able to adapt to shocks and preserve jobs, and an equitable society that empowers people to be better able to absorb and adapt to shocks 12
13 Thank you 13
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