#Japan #Tokyo #EY #investment strategy #Disaster Prevention

EY's New Proposals for Disaster Prevention Investment

EY Strategy and Consulting has recently published two insightful reports outlining essential recommendations for disaster prevention and mitigation investment in Japan. The reports, titled 'From Recovery Nation to Prepared Nation: Considerations on Appropriate Disaster Prevention and Mitigation Investment in Japan' and 'Prioritizing Preparedness: An Analysis of Local Government Investment in Disaster Prevention and Mitigation,' emphasize the importance of a strategic approach to investments in disaster readiness.

In light of an increase in severe natural disasters and the looming threat posed by potential large-scale earthquakes, the reports underline that proactive investment in disaster prevention is paramount not only for recovery but for reducing future damage. The reports advocate a comprehensive perspective that encompasses not only the scale of investment but also prioritization tailored to regional characteristics, risks, and systemic support.

Overview of the Reports

The National Report suggests a provisional guideline for total disaster investment across various sectors, proposing a benchmark of 0.620% to 0.700% of Japan's GDP, amounting to approximately 4.2 to 4.7 trillion yen annually. It positions disaster response as a national risk that must be managed before incidents occur, rather than merely addressing issues post-disaster.

Key points from the National Report include:

• - Framing disaster investment not as an expenditure but as a crucial investment to mitigate future losses.
• - Identifying a provisional investment scale, focused on areas such as infrastructure resilience, climate change response, and enhancing local disaster preparedness, integrated within existing projects to avoid redundancy.
• - Establishing five criteria for additional investment consideration, including societal importance, execution capability, and evaluation for efficacy and withdrawal rules.

The Local Government Report stresses the need for tailored prioritization in disaster investments based on regional characteristics and risks. It identifies the critical elements of 'what to protect,' 'what to initiate first,' and 'who will execute these plans.'

Key points from the Local Government Report include:

• - Categorizing local governments' challenges as a 'triple disparity' in finance, personnel, and risk.
• - Introducing a unique framework categorizing municipalities into seven types, such as urban centers and areas prone to earthquakes or tsunamis, to establish priority areas for disaster investment.
• - Highlighting immediate actions necessary to protect lives within the first 72 hours of a disaster.
• - Suggesting a structured collaboration framework among local and regional governments to enhance resilience.

Commentary from EY Professionals

EYSC partners underline the importance of these reports. Yasu Matsumoto noted that Japan's disaster readiness is regarded as advanced globally, but it is essential to shift focus from reactive measures to proactive disaster prevention. There is a pressing need to refine the distribution of roles between national and local governments and align budget allocations with this approach.

Takashi Harada emphasized that the benefits of disaster investments might not be immediately visible, manifesting as avoided damages. Thus, framing these investments as strategic rather than mere expenditures is crucial, ensuring continued evaluation and adjustment of approaches.

Tsuneji Kunishima remarked on the transformation of disaster preparedness from standard infrastructure planning into a pressing management issue influenced by demographic and resource challenges. He advocated for a prioritization driven by a clear understanding of local needs and execution capabilities.

In conclusion, these reports set forth a valuable framework for enhancing Japan's disaster prevention investments, encouraging a collective approach to fostering a society where safety and preparedness are paramount. Stakeholders are called upon to consider these insights as they navigate the complex landscape of disaster management, aiming for a future where communities can confidently face potential threats.

For further details, the reports can be downloaded at EY's official website.

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