Cedric Stephens | The doctrine of resilience | Business

Resilience is a word Prime Minister Andrew Holness uses often. He chose this phrase in a speech on climate change in November 2017. He used it again in June 2018 when he spoke at the G7 summit awareness session in Quebec, Canada.

“Building resilience,” he said, “is not optional; it is imperative for our survival. Creative and innovative solutions must be found to design appropriate risk mitigation, risk transfer and risk financing tools while ensuring broad participation in solutions.

This message, while directed to an audience of global leaders, also has implications for people in the local public and private sectors.

Prime Minister Holness or members of his audience then had no idea how prophetic his words would become given the emerging threat that engulfed the world 18 months later and tested resilience. A unique event per century, in the form of a pandemic, has occurred and has disrupted the lives, operations of countries, businesses and all kinds of institutions around the world – large, medium and small.

Finance and Civil Service Minister Dr Nigel Clarke got the message. He spoke about resilience in his 2021-2022 Budget Speech. He continued the discussion last month against the backdrop of the country’s tax risk from natural disasters in a newspaper article.

“Natural disasters force governments to commit to emergency public spending. The layers of Jamaica’s (current) strategy collectively provide fiscal buffers for the fiscal shocks that natural disasters inevitably cause, ”he wrote. “These buffers increase Jamaica’s resilience and strengthen our ability to pick ourselves up… without undermining our economic trajectory too much.”

The tampons he referred to are new. None of them existed 30 years ago.

Jamaica’s news service reported last week that resilience was once again the subject of another speech the Prime Minister gave on COVID-19.

“There will always be adverse events beyond our control, and the government must be deliberate and systematic to build our resilience and invest in our ability to understand future shocks, and that is exactly what we are doing,” said the Prime Minister. He was talking about the “national capacity to test not only for new variants that cause COVID-19, but for other viruses that may emerge in the future.”

What does resilience mean in these ongoing discussions? The US Economic Development Administration provides an answer. It states on its website that “economic prosperity is linked to the ability of a region (or country) to prevent, resist and quickly recover from major disruptions (i.e. ‘shocks’) ) of its economic base. Many definitions of economic resilience limit their focus on the ability to recover quickly from a disruption. However, in the context of economic development, economic resilience includes three main attributes: the ability to recover quickly from a shock, the ability to withstand a shock, and the ability to avoid the shock completely. Establishing economic resilience in a local or regional economy requires the ability to anticipate risks, assess how this risk may impact key economic assets and build responsiveness ”.

The message of resilience is gaining ground at local and regional level. Surprisingly, insurers do not appear to be among the first to adopt the doctrine. Here are five examples that show resilience is the order of the day.

• The Caribbean Tourism Organization, based in Barbados, has developed a multi-hazard risk management guide for its members. The guide will help public and private sector practitioners prepare for and manage hazards that pose a risk to the tourism industry.

• The Ministry of Industry and Investment is leading a process to improve resilience in the business process outsourcing sector to deal with, among others, disasters and disaster epidemics. The fact that the ministry has sought funding to undertake this task for the benefit of private sector companies underlines the importance of the project.

• Tourism Minister Edmund Bartlett strongly believes in the resilience gospel. The pandemic, he argued in an April 2021 article in this newspaper, presented the biggest challenge for the industry. Recovery, he said, has become “almost synonymous with building resilience. The sector must become more adaptable, resilient, sustainable, inclusive and competitive. “

• Sangster International Airport is essential national infrastructure. Airport operators announced ahead of the start of the 2021 hurricane season that the institution was strengthening its disaster preparedness and response plans. One of the co-sponsors, the United Nations Development Program, said it was keen to build capacity and resilience to ensure effective and efficient responses to crises.

• A recent Ministry of Finance audit of the Auditor General’s department found that the ministry was operating without a business continuity plan. Business continuity planning is the process a business takes to create a system for preventing and recovering from potential threats such as natural disasters or cyber attacks.

Dr Clarke spoke again about resilience last week, this time at the micro level. The government plans to accelerate the development of microinsurance as part of its financial inclusion strategy. He was speaking at the Jamaican segment of the Munich Re-Foundation International Conference on Inclusive Insurance 2021, digital edition.

Microinsurance products provide coverage to low-income households or to people with little savings who are excluded from the traditional insurance system. Microinsurance products, to use the words attributed to the Prime Minister, facilitate the difficult transitions that this segment of the population faces from time to time.

– Cedric E. Stephens provides independent information and advice on risk management and insurance. For free information or advice, write to: [email protected] or [email protected]

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