Increasing the Resilience of Asian Supply Chains to Natural Disasters: The Role of the Financial Sector
The financial sector is a part of the vital infrastructure of the economy. It 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. This paper considers steps that member countries of the Association of Southeast Asian Nations can take to develop the financial sector in these ways and thus be better prepared for the earthquakes, typhoons, tidal waves, and other catastrophes that buffet the region.