Peer-reviewed Article
GAR19
Topics: Region/Country: Language:
English

Globalization of local risks through international investments and businesses: A case for Risk Communication and Climate Fragility Reduction

In UNISDR Global Assessment Report 19 Contributing Paper Series: 2019-05

This paper presents results from a regional survey conducted on the globalization of local risks through investments in the vulnerable regions of Asia. Some countries that have been successful in attracting global investments in manufacturing and service industries are also highly vulnerable to natural hazard risks raising an important issue of globalization of local risks. Drought in a country that is producing for international markets is now impacting the global food prices and floods in a country are impacting more foreign businesses than ever before. The local risks tend to multiply in magnitude and spill over into international markets impacting the overall wellbeing of the society. Understanding and addressing such risks is even more relevant today than a decade ago as more and more countries are eying to attract foreign investments but are yet to fully improve their disaster risk reduction and climate change readiness. One of the negative effects of some of the risk management options employed by international businesses further globalize local risks as insurance markets are globally connected and do not isolate local risks from spilling over beyond the country boundaries, though the investors themselves are financially covered. There are important questions to be asked to the countries accommodating foreign investments and to businesses that invest in vulnerable countries. There is an aspect of risk communication at the local level where investments are happening. Some of the important questions for the host countries are a) what measures are put in place by the host countries to mitigate local risks affecting the international investments, b) to what extent risks have been communicated to investors in a transparent manner. The question for the businesses are a) to what extent they are fully aware of local risks, b) what impact these international investments can have in mitigating local risks?

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