“Asia Pacific not only suffers the most from natural disasters and extreme weather events in terms of loss of life, but its large and highly vulnerable population make the region especially susceptible to economic losses. Industrialisation and unplanned urbanisation have also led to environmental degradation, which weakens the region’s natural defences against disasters,” said the report.

As Nat CATs can potentially erode the economic competitiveness of the region, increasingly frequent natural disasters in Asia and the Pacific have stressed the need for strengthening resilience against future events.

The concerns about Nat CATs in East Asia and the Pacific were greatly driven by responses from Japan and New Zealand where they ranked top, as well as from Indonesia and the Philippines where they ranked third. Two recent examples of Nat CATs that battered these countries include the devastating earthquake and tsunami that struck Indonesia in September 2018 and the flash floods that hit Japan earlier that year.

According to the Centre for Research on Epidemiology of Disasters, the broader Asia Pacific region witnessed 50% of all the natural disasters in the world during 2018. The disasters in the region claimed over 80% of the total deaths, affected over 50m people and totalled $56.8bn in costs.

The issue of water crises in South Asia, which has been described as “a problem of scarcity amid abundance”, rose from fifth place the year before to being the number one risk for doing business in the region in 2019. Low per-capita water availability and a high relative level of water use make it one of the most water-scarce regions of the world. The region is home to around a quarter of the global population but has less than 5% of the world’s renewable water resources.  At a country level, water crises ranked as the top-most risk in India, second in Pakistan and fourth in Sri Lanka.

Moreover, water storage in these countries is low by global standards. As floods and droughts that afflict the region are expected to increase with climate change, this makes it even more difficult to manage water resources.

India is one of 17 countries that face “extremely high” water stress and by 2020, more than 20 cities including capital New Delhi will be at risk of running out of groundwater affecting approximately 100m people. Neighbouring Pakistan lacks proper infrastructure to deliver clean drinking water to its population and is at risk of disruptions from extreme weather events which will only grow more pronounced as a result of climate change.

Water also presents geopolitical challenges in the region as it is a potential weapon in cross-border disputes even though there are bilateral arrangements in place. In several instances, countries have threatened cutting off flows because of outbreaks of violence in disputed territories.

Source: Asia Insurance Review