The 2021 edition of the FM Global Resilience Index shows that Singapore has surpassed Hong Kong as Asia’s most economically resilient country, while the gap between the most and least resilient regions continued to grow.
FM Global expressed some concern over this widening divide as economies seek to recover and adapt multi-market supply chains and pursue opportunities for growth.
In addition to being the most resilient country in Asia, Singapore also ranked as the region’s biggest mover, rising 10 places to rank 12th overall due to the inclusion of new earthquake data incorporated into the 2021 index calculations.
At the same time, Hong Kong dropped 7 places, from 19 to 26 in the index mainly due to increased political risk due to political tensions.
China, which the index divides into three territories due to disparate exposure to natural hazards like wind, flood and earthquake, saw the central and western part of the country drop 6 spots from 65 to 71, due to increased earthquake exposure.
Elsewhere in the region, the relative resilience of countries and territories continues to languish with Thailand (ranked 70) Indonesia (82), Philippines (89) and Vietnam (96) all filling places in the bottom half of the Index.
“As the region’s risk landscape becomes more complex, it is critical for businesses operating in multiple markets to maintain awareness of the drivers of risk across their supply chains to brace for unexpected business interruption,” said Tan Hian Hong, vice president, FM Global Asia.
“Recent events in Myanmar and the Suez Canal show that risk is not evenly distributed, as one country’s vulnerability can be another’s costly business disruption, so understanding the impact on distributed supply chains and regional property assets is critical because of the increased threats posed by the impact of a changing climate and, increasingly, cyberattack.”
“When you look at the pattern of global events, it is not hard to project significant supply chain impact in Asia in the near future,” added Tan. “A strong economic recovery needs to build in resilience from the outset because, as the region’s resilience rankings show, disruption is a matter of when, not if. Those that come through strongest will be those that have managed their exposure to known and unknown risk most effectively.”
Outside of Asia, Denmark was ranked as the most resilient country, rising from third in last year’s index to its first-ever top ranking, bumping Norway, which has held the No. 1 spot in the index in recent years, into second place.
Luxembourg rounds out the top three countries in overall business resilience, with Western Europe taking 9 of the top 10 places. The Central United States is the lone exception, occupying ninth place as it did last year.
Ukraine was the index’s biggest riser, soaring from 84 to 63 based on improved resilience rankings in multiple measures, including productivity, oil intensity, natural hazard exposure, inherent cyber risk and control of corruption.
And the biggest faller was Oman, sinking from 57 to 69 because of steep drops in productivity and oil intensity.