Boosting economic and social
resilience and the governance of
critical risks
Stephane JACOBZONE
Public Governance and ...
A new context: Governments are facing
novel risks in a complex landscape
• Increased major shock events
– Large-scale, ...
• Past decade: USD 1.5 trillion in economic damages from man-made
disasters (industrial accidents, terrorist attacks) and...
Resilience is…
… the capacity of a system to absorb disturbance and reorganise
while undergoing change so as to still re...
Resilience is…
… the capacity to adapt to changing conditions without
catastrophic loss of form or function
….A dynamic...
An economic analysis of resilience:
Minimising welfare losses
Source: OECD (2009), OECD Factbook 2009: Economic, Environ...
An economic and welfare analysis of
resilience
Source: OECD (2009), OECD Factbook 2009: Economic, Environmental and Soci...
• Some disasters caused economic losses in excess of 20% of GDP
(Chile, NZ), with local economies especially affected
• ...
Multiple economic effects: Japan
• In the aftermath of the earthquake in 2011– Japanese economy
contracted by 0.7% in re...
Multiple economic effects: New Zealand
• Stimulus peak from the rebuild 2 %of GDP.2011
• Resilient economy: GDP rose by ...
Boosting Resilience
• Multiple layers of resilience
• Systems’ approach to strengthening
resilience through risk govern...
• Implementing OECD Recommendation on the
governance of critical risks
• Integrating interconnectedness, policy
implica...
Objective: Ensure that governments develop
robust frameworks for the governance of critical
risks and their resilience t...
• Importance of ensuring decision making
under uncertainty
• Building multiple layers of resilience
• Maximising the be...
Contact:
Stéphane Jacobzone
Jack Radisch
OECD High Level Risk Forum
Stephane.jacobzone@oecd.org
15
THANK YOU
of 15

Naec 29 9-2014 jacobzone

Published on: Mar 3, 2016
Published in: Economy & Finance      
Source: www.slideshare.net


Transcripts - Naec 29 9-2014 jacobzone

  • 1. Boosting economic and social resilience and the governance of critical risks Stephane JACOBZONE Public Governance and Territorial Development OECD NAEC Seminar 29 September 2014
  • 2. A new context: Governments are facing novel risks in a complex landscape • Increased major shock events – Large-scale, novelty, complexity, trans-boundary and cascading effects • Increased vulnerabilities of modern societies – Mobility, interdependency, interconnectedness, climate change, concentration, urban & coastal development • Reduced capacities of national governments, new stakeholders, increased citizen’s expectations
  • 3. • Past decade: USD 1.5 trillion in economic damages from man-made disasters (industrial accidents, terrorist attacks) and natural disasters (primarily storms and floods) Why boosting resilience matters 0 50 100 150 200 250 300 350 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Annual economic losses in USD billion Source: EM-DAT: The OFDA/CRED International Disaster Database, Université catholique de Louvain, Brussels, Belgium, www.emdat.be (accessed 14 November 2013). Economic losses due to disasters in OECD and BRIC countries, 1980-2012 (USD Billion)
  • 4. Resilience is… … the capacity of a system to absorb disturbance and reorganise while undergoing change so as to still retain essentially the same function, structure, identity, and feedbacks. Source: OECD (2014). Boosting Resilience through Innovative Risk Governance. OECD Publishing, Paris.
  • 5. Resilience is… … the capacity to adapt to changing conditions without catastrophic loss of form or function ….A dynamic perspective: an emergent property of what a system does, rather than a static property that the system has: it is an outcome of a recursive process that includes: sensing, anticipation, learning and adaptation. This applies to SOCIAL AND ECONOMIC SYSTEMS Source: OECD (2014). Boosting Resilience through Innovative Risk Governance. OECD Publishing, Paris.
  • 6. An economic analysis of resilience: Minimising welfare losses Source: OECD (2009), OECD Factbook 2009: Economic, Environmental and Social Statistics. Source: Mirdoudot, S. and K. De Backer (2012), “Mapping Global Value Chains”. Trend GDP Major shock : - Economic crisis - Disaster Time GDP Severity of impact Duration Shaded area corresponds to GDP the welfare loss
  • 7. An economic and welfare analysis of resilience Source: OECD (2009), OECD Factbook 2009: Economic, Environmental and Social Statistics. Source: Mirdoudot, S. and K. De Backer (2012), “Mapping Global Value Chains”. • An economic challenge : case fatality reduced in OECD economies, but economic impacts have increased • An argument for economic competitiveness • Requires a 360 degree approach to understand the economic vulnerability and impacts: o Macroeconomic shocks are not the only ones o Disaster impacts, local impacts but also macroeconomic propagation o Impacts on government revenues, stock markets o Some hypothesis may not always hold o Need to rethink government strategies integrating a risk dimension into long term and national security planning
  • 8. • Some disasters caused economic losses in excess of 20% of GDP (Chile, NZ), with local economies especially affected • Shocks propagate across economic sectors and geographic boundaries through interconnected economies • Considerable uncertainty challenges good policy making for resilience The dynamics of shocks -10% -5% 0% 5% 10% 15% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Annual Regional GDP growth to previous year The impact of disasters on local economies Abruzzo Queensland New York 9/11 Attacks L‘Aquila Earthquake 6/4/2009 Queensland Flooding 2010/11 Source: OECD (2012), Large regions, TL2: Demographic statistics, OECD Regional Statistics (database), accessed on 14 November 2013, doi: 10.1787/data-00520-en
  • 9. Multiple economic effects: Japan • In the aftermath of the earthquake in 2011– Japanese economy contracted by 0.7% in real GDP and fiscal deficit increased to 9.5% as a result of the disaster in 2011 • Industrial production fell by 15 % compared to previous month, • Impacts of power supply, corporate earnings, • Less impacts in terms of employment, prices remained stable, • Local effects: exodus of younger generations in the affected areas exacerbating aging • Past earthquakes did boost public fixed capital formation and government final consumption expenditure, implications for public debt. Source: Higuchi et al, ESRI discussion paper 2012, Cabinet Office, annual report on the Japanese economy, July 2011
  • 10. Multiple economic effects: New Zealand • Stimulus peak from the rebuild 2 %of GDP.2011 • Resilient economy: GDP rose by 0.9 % • Higher damage estimates: continuing after shock. Huge impact on public debt: 20 points of GDP, • Huge impact on public debt: 20 points of GDP, • Current account widening, • Ex post estimates of the costs have risen significantly,
  • 11. Boosting Resilience • Multiple layers of resilience • Systems’ approach to strengthening resilience through risk governance
  • 12. • Implementing OECD Recommendation on the governance of critical risks • Integrating interconnectedness, policy implications and policy trade offs • Analysing the vulnerabilities to a wide range of shocks, including disasters and man made threats • Promoting an integrated understanding of resilience and of its risk implications Addressing resilience gaps : A NAEC approach through the High Level Risk Forum
  • 13. Objective: Ensure that governments develop robust frameworks for the governance of critical risks and their resilience to major shocks Adopted by the OECD Ministers in May 2014 Close cooperation with the UN and the revision of the HFA 13 The OECD Recommendation on the governance of critical risks 1. A holistic approach to risk management 2. Risk assessment, foresight, financing framework 3. Whole-of-society approach to prevention 4. Strategic crisis management 5. Transparency, accountability, improvement Source: OECD (2014), Recommendation of the Council on the Governance of Critical Risks B
  • 14. • Importance of ensuring decision making under uncertainty • Building multiple layers of resilience • Maximising the benefits of working together at community level, at national level and through international cooperation • Building Trust is essential CONCLUSION
  • 15. Contact: Stéphane Jacobzone Jack Radisch OECD High Level Risk Forum Stephane.jacobzone@oecd.org 15 THANK YOU

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