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22 May 2019
Australia is one of the most resilient nations in the world but businesses are increasingly exposed to greater risks in Asia, according to a new report.
FM Global’s Resilience Index, published today, ranks Australia’s business environment as the 17th most resilient out of 130 countries and territories.
The insurer’s rankings are derived from 12 economic, risk quality and supply-chain related measures addressing business concerns around such things as natural hazards, cyber threats, political and economic risk.
Australia was recognised for its high natural hazard risk quality (15th) due to the calibre and enforcement of building codes with respect to risks like floods and bushfires.
It was also recognised for higher control of corruption (14th) and supply chain visibility (22nd). It was held back by its inherent cyber risk (62nd).
FM Global also warns that by expanding into Asia, Australian companies face greater exposure.
Operations Manager Lynette Schultheis says while overseas growth can increase competitiveness, there are pitfalls.
“Few have mapped the vulnerabilities that their supply chains are now exposed to,” she said. “This means too few businesses understand the potential political, financial, legal and reputational risks they may have unintentionally exposed themselves to and now must face and overcome.”
Key manufacturing hubs in Asia, such as Bangladesh and Sri Lanka, rank poorly for natural hazard exposure (joint 112th).
Vietnam ranked last (130th) for natural hazard risk quality, due to poor quality and enforcement of building codes with respect to natural hazard-resistant design.
Many Asian countries appeared much lower on the overall resilience list than Australia, including India (59), Thailand (73), China (split into three regions ranging from 68-76), Sri Lanka (81), Vietnam (88), Bangladesh (108) and Cambodia (114).
Norway ranked first, and Denmark second in the index, which can be accessed here.
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