Resilience is key to economic stability

GCC governments need to pay more attention to national resilience planning to create stability and manage risk, says Booz Allen Hamilton

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Resilience is key to economic stability GCC countries need more structured resilience planning and better co-ordination across agencies, says Maroun.
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By  Mark Sutton Published  June 4, 2017

Government and city authorities in the GCC need to improve their resilience planning, according to a new report from Booz Allen Hamilton, in order to improve their ability to survive crises and manage risk.

In the report, titled Building National Resilience, the management consulting company noted that while many governments have begun paying attention to ‘risk’, there is still a need for more attention to ‘resilience’, including formalised planning and collaboration.

Countries are facing a diverse and complex set of risks, including economic, environmental, technological, geopolitical, and societal risks, which can have severe consequences for the unprepared. The OECD has estimated the negative impact from a major disruptive event can account for as much as 20% of a country’s GDP. The report highlights the success of Nigeria in managing the Ebola virus outbreak of 2014, mainly due to good planning for disaster, supported by funding, coordination, training and communication, which resulted in only eight deaths in the country.

Nabih Maroun, Executive Vice President at Booz Allen Hamilton MENA, said that the impact of low oil prices and economic slowdown has put risk on the agenda of the GCC countries, but governments need more sophisticated approaches which will address resilience, defined as the ability to prevent and manage risks in a changing world.

“Today, resilience is a frequently cited objective by GCC government leaders, but is often confused with emergency preparedness,” Maroun said. “National Resilience is more than the capacity to respond to and recover from specific shocks; it includes the ability to predict, prevent and manage a myriad of risks that could affect different critical infrastructure components and ultimately threaten economic stability.

“While the past three years have provided the possibility to test how GCC countries are able to respond to economic shocks, they have also highlighted the low overall level of preparedness of governments to handle other types of risks on vital sectors such as water, food, banking and telecommunications.”

GCC governments should develop bespoke resilience roadmaps and develop a resilience vision and strategy that is aligned with their national strategy the report notes. This planning, which should integrate resilience into national strategic agendas, should be based on comprehensive frameworks for resilience, such as the guidelines published by the World Bank and the OECD.

BAH recommends that effective, holistic resilience planning needs to address three stages, to determine vital sectors, establish national governance capacity, and build functional capabilities.

Establishing the national governance capacity requires a clear strategy and co-ordination of policies, operations, and communications, supported with analytics, reporting and monitoring systems so that the country can adapt dynamically to shifting conditions.

Resilience also requires long-term shifts in integrated functional capabilities. This could include continuity of government and operations, continuous risk-management, emergency management, crisis communication, infrastructure protection systems and intelligence gathering and sharing methods.

Co-ordination and planning across sectors is the main challenge facing resilience planning in the GCC, he added: “Today, ministries stewarding each sector tend to look at potential risks that could jeopardize their infrastructure and continuity of operations with little consideration for implications on other sectors. For instance, how do extended port closures affect the country’s ability to import basic food commodities? Or, how does a utilities blackout impact the food cold storage chain and subsequent health hazards?”

In the GCC, the BAH resilience team has conducted several simulations and exercises to test risks impacting critical national infrastructure and enhance coordination among different government and corporate stakeholders, he noted, including development of national emergency planning, continuity of government structures and planning for food and water security and transport, energy, communication and health resilience plans.

One important aspect of planning is the appointment of a Chief Resilience Officer (CRO), and BAH often takes on this role in its engagements with governments clients, particularly in relation to co-ordination across departments and functions. Resilience planning should also consider collaboration with the private sector and citizens, although efforts should be led by the government.

“The centre of government should hold a key role in identifying sector inter-dependencies, setting guidelines for embedding resilience considerations within Ministries’ strategies and plans, and establishing the proper governance to coordinate cross-sector risk identification and evaluation, continuity of operations, policy definition and planning, and emergency management,” Maroun said.

While there are a number of standards governing resilience, such as Basel III for the banking sector, or ISO 22326, they fall short of the requirements of national-level resilience planning, he added. A more developed framework is required, such as the Resilience Framework and City Resilience Index from professional services company Arup. A number of Middle East cities have joined the Arup 100 Resilient Cities Network, including Amman, Byblos, Luxor and Ramallah, and taken the first step of appointing a CRO to begin co-ordination and planning of resilience efforts.

In terms of resilience, ICT is both a risk factor and critical management tool, particularly with the digital transformation of city systems. The risk of cyberattack on critical systems should be a consideration in all resilience planning, especially given estimates that cyber attacks cost GCC governments $1 billion per year.

Dr Raymond Khoury, Executive Vice President at Booz Allen Hamilton MENA commented: “ICT has a critical role to plan for and effect these measures, to conduct simulations to determine their effectiveness, and then revise them to ensure that they are up to the potential threats’ challenge. ICT plays a facilitating role — and at times an enabling role — in support of deploying proactive and reactive resilience measures. Systems and communications solutions can be used to project or even predict man-made or natural threats.”

The advent of IoT, artificial intelligence, data analytics and predictive intelligence has also created more capabilities to prevent threats or reduce their impact, Khoury added, as well as to enable better responses to critical events through emergency systems, communications, logistics and management.

Smart city environments require additional resilience planning of their own, particularly in cybersecurity and system redundancy, across all aspects of communication infrastructure, data, systems, and digital delivery channels, Khoury said. However, the IoT infrastructure of a smart city presents additional capabilities in resilience.

“The advancement of the Internet of Things, a core enabler of smart city systems and smart public safety systems, allows for proactive and reactive resilience measures to be effected in a timely manner. Such smart systems, through their enablers, can offer early warning or instantaneous communications of man-made or natural threats to critical infrastructure of a city,” he said.

“Through the deployment of IP-enabled sensors or measuring instruments throughout a smart city infrastructure, the potential or actual occurrence of threats can be communicated to public safety command and controls centres to respond to these threats, inform city sections and their inhabitants about the pending dangers and communicate the evacuation measures to be taken.

“Smart city systems can also predict pending infrastructure malfunctions or blockages before they occur and, hence, trigger the proper corrective measures from the concerned authorities before they become destructive in nature. Smart city systems in and of themselves are designed to be resilient and always operational regardless of circumstance. As such, smart cities would constitute a solid protective backbone for any type of threat to critical infrastructure.”

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