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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2620

Tsunami, Natural calamities and the role of business community

By Amitab Dixit

Bygone March 2003 spring blossomed across South Asia region where amidst reconstruction and rehabilitation activities life was returning to normal after Tsunami struck nations on coast of Indian Ocean. Time reduced this unparalleled severity ever recorded in human history to mere figures but its magnitude is still felt. December 2004 waves took toll over 230,000 lives leaving 1.7 million homeless sweeping schools, hospitals, Government offices, and business infrastructure in 14 countries.

Was prevention possible?

In India not only socio economic activities got into spate of nature’s fury but also it gave jerk to defense establishments like sensitive Indira point and Air bases in ocean. Coastal areas in Sri Lanka and Indonesia were worst victims with 360,000 and 275,000 people lost their jobs in respective regions and it claim lives of millions of tourists of European and American origin.

Agreed to the fact that it could not be controlled but was prevention possible?

When it struck Indian shores after three hours it shook Indonesia Government was ready with not one but two disaster plans. Had all 14 countries were member of 26 nation’s members in Pacific ocean TWS (Tsunami Warning systems) it could have saved lives at least. Set up in Hawaii in 1965 TWS receive specific early warnings with exhaustive data on Tsunamis and can bank on an extensive network of seismic stations to locate nature’s wrath either Tsunami or Earthquake and they have already mastered the art of forecasting destructive waves.

Connected via satellites and phones to nearly 100 water level stations, had all Asian community participated in launching system way back in 70’s it could have control aftermath of disasters saving lives in much advance. And here when it comes to such systems and plans business community (could) plays a pivotal role to bring about change in reconstruction management. "It can help nations in taking precautions with concentration on risk analysis. Based on the type of business the companies might find in cooperation with various global/local organizations ways of helping to build infrastructure/system." Says Eeva Kainulainen (Vice President, Corporate Communications) Wartsila, Singapore.

For instance business community rose US$ 7 million for those affected in Indonesia in just two months but as matter of fact money alone cannot suffice the purpose of overall rehabilitation. "You could, perhaps, look at the way the Governments are trying to tackle the bird flu issue as this can impact air travel if it goes out of control. IATA, as the representative body of airlines, is interacting with various Governments likely to be affected by bird flu." Says Jitendra Bhargava, Director, Air India on how business community came forward with solutions to another natural disaster. “As far as Industry is concerned you may have noticed the airline industry is always faster to recover. The Iran-Iraq war and Kuwait invasion was followed by a boom in aviation industry. Likewise, after 9/11, the industry recovered immediately but as SARS followed soon thereafter, the boom was not felt.

The years 2004 and 2005 have been exceptionally good for the aviation industry.” It has affected every business directly/indirectly as various trends and their visibility in Business scenario proves the point. "Natural disasters like the Tsunami and Floods do not affect all industries directly. Involved with the textile industry, the impact for us would be similar to other industries as well - sluggishness in operations. There could be some silver linings - a skewed demand for polyester fiber in the wake of significantly impacted loss of cotton crops!

In essence, what I am trying to say is that the farthest we can go in concluding about industry performance in the wake of natural disasters is a slowdown in economic activity. The impact of this at a global macro-economic level is resurgence in re-construction activity. Markets, after a six to nine month hiatus, will begin to represent at a more true level, the intrinsic value in the resultant growth." Adds Sukumar Narasimhan (VP) of Reliance India limited.

Like two facets of a coin, this situation has two dimensions to it. On one end of spectrum it has put human race on alert compelling them to brood upon planning disasters well in advance and on other end of spectrum it has issued a clarion call to businesses to redefine and broaden their social responsibility.

Taking up challenge together

There are no control systems that business community can develop but always better ideas to combat it in synergic mode. It’s not planning the fate but managing the disaster. “To combat this vulnerability, most companies have implemented some level of disaster planning or data recovery, often extremely sophisticated, but many are yet to build a truly resilient IT infrastructure” says Lara Fidler, Manager of IBM's Business Resiliency and Continuity Services practice, "there are six steps to building resilient infrastructure most companies rarely progress beyond these first three i.e. Recovery (providing for safe, rapid, offsite data recovery in the event of a disaster), Hardening (fortifying infrastructure to make it less susceptible to natural disaster) and Redundancy (duplicating the infrastructure to supply active backup service). These three protect infrastructure but they do nothing to improve competitive position" continues Lara on how to go offensive after developing defense mechanism "Accessibility (easy access to infrastructure for business partners, employees and associates), diversity (physically distributing resources and implementing diverse communication technologies) and implementing autonomic operations that can ‘make decisions’ without human intervention can bring companies on normal growth tracks."

Damages made and its echoes are clearly audible in cross section of society across globe including business that none of dimensions furious waves left untouched. "To the extent the reconstruction activity involves diversion of funds from development to infrastructure initiatives; the scrip of firms in non-core sector of economic activity will get weak over the period and begin to get back up upon normalization of the economic environment. Thus there will be a downward trend in markets before a resurgence in the next three quarters," predicts Sukumar adding, "Disaster Recovery and Business Continuity are an integral part of any organization's ongoing plans for sustenance. In the backdrop of the recent events not only in Asia-Pacific but also the US, professionals involved in this sphere of organization management have been the busiest in reinforcing their postulates for effective business practices!

The more emphatic role for organizations in general is in rehabilitation. From a stretched point of view, rehabilitation of an economy would be in the interest of the business community as a whole! So in a manner of speaking, the participation of industry through funding reconstruction efforts will only be in their self-interest. I personally believe all firms in all industry should allocate a part of their earnings towards providing for such natural force-major situations! These today stop at the level of the firm's engagement in charity, but I think our dependence on State Funds and initiatives to rebuild an economy should cease Industry should take a proactive role in Social Reconstruction as this is fundamental to maintaining a stable economic activity. Private sector involvement in such activities through an organized effort will go a long way in making the reconstruction activity more purposeful, economical without time over-runs, and professional, unlike in any state effort."

After Katrina and baaz hit US coasts the need of synergy is felt across spectrum of cross sections of industries and realization has come that businesses have to broaden/redefine their social responsibility from mere charity/donations to active participation. "Business communities can play a critical role in immediate short-term disaster relief and in long-term rehabilitation efforts. In the aftermath of a disaster organizations can leverage their organizational rigidity and resources and respond in a timely and effective manner. An obvious, if simplistic, example could be construction companies in India and Pakistan proactively supporting governments and agencies with equipment and expertise in response to the recent earthquake. Taken as a whole, the business community in the affected regions is even more invested in rehabilitation – no business can prosper if its environment is in a state of collapse," advocate Tanti of Suzlon energy, India.

"The infrastructure and power sector as a whole and the wind energy industry in particular can play a vital role in long-term disaster recovery, particularly in the context of the tsunami and the earthquake. Given that these disasters struck mainly underdeveloped regions to begin with, the rehabilitation & reconstruction effort has the unique opportunity to bring these neglected communities into the mainstream – build infrastructure and provide opportunity where the was none even before disaster struck. Wind energy has the potential to provide isolated regions with power to energize reconstruction and improve the quality of life of entire communities, providing opportunity for a better livelihood. This, of course, is dependent on a number of considerations – like the availability of suitable sites and facilities etc. – but integrated with an overall reconstruction effort such initiatives have the potential of returning their lives to the people who have lost everything, and the means to make it better." Highlights Tanti that how sector could help in rehabilitation.

Coming together

Coming together is a process whereas working together is beginning. Politically speaking it is arduous task to bring nations on common platform but business houses can mitigate differences between countries to combat such furies. “Disaster response is today a global priority. Specialized governmental, international and independent agencies have the ability to detect and respond to disasters anywhere in the world in a matter of hours. The response to the tsunami and the ongoing relief effort in parts of India and Pakistan bear testimony to the scale and the commitment to the effort. However the onus for long-term rehabilitation remains with local governments and bodies. In this, regional bodies like the SAARC and ASEAN can play a crucial role by acting as conduits for easing cross-border movement and trade, encouraging investment, acting as neutral parties in negotiations etc. As businesses become ever more international, trade will spill over borders and attempt to find the path of least resistance. Nations and international bodies have the responsibility to recognize opportunities for cross-border synergies in combating disasters and turning rehabilitation efforts into long-term win-win situations for the victims and those who come to their aid." Predicts Tanti.

Community in Korea came forward in cleansing streets and everyone participated. If the participation model and effort could be shared at regional level it could give others an insight to solutions to problem that society faces. Governments have to build better resiliency plans in close coordination with corporations and global corporations have to look at it more locally. "Having determined core functions and risk factors, companies can calculate their current level of resilience. For global corporations, this involves considering resilience from a global perspective. Although a company may be headquartered in a ‘safe’ country, it may have manufacturing functions in politically unstable areas, or back office functions in the shadow of a volcano. Global business continuity and recovery strategies must provide for all such local needs," concludes Lara.

Other side of coin

When earthquake hit Himalayan region it put archrivals Government of India and Pakistan to open up five points on line of Control. And this action brought in relief to PoK (Pakistan occupied Kashmir) poverty struck people not only in terms of relief material but also some tourists and business filtered in for first time giving a sigh of relief to locals. Despite damages Tsunami had caused it has got a brighter perspective that it has made corporations rethink and put their social responsibility under transience. Systems theory has its implication in nature where one thing is dependent on another. Where one thing always leads to another, where growth of one factor depends on growth of another. Business community operate in such an environment where they cannot afford to say ‘it’s not my business baby’!

Amitabh Dixit - a freelance journalist contributed more than 400 stories to some 15 publicaions India and abroad. He submitted this article to "Asian Tribune" for publication.

- Asian Tribune -

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