Risk management and business continuity plans have been shown by the Covid-19 crisis to be absolutely critical in the effort to maintain supply chains in Asia and on a global basis, and need to be improved to protect Asia’s position as a global trade and investment hub, Japan and the Association of Southeast Asian Nations (ASEAN) have formally agreed.
The ASEAN and Japan’s economic minister have therefore issued a statement on economic resilience initiatives that need to be launched in response to Covid-19, not least by using structured risk management and business continuity planning in order to strike a better balance between risk management and cost competitiveness, and achieve a more resilient regional and global supply chain.
The ASEAN followed up the joint statement with Japan by issuing a joint statement with China that announces a new five-year action plan, and stressed the need to step up ASEAN-China cooperation through existing frameworks to mitigate the pandemic and its impact. The parties agreed the need to ensure regional supply chains, especially for essential goods such as food, commodities, medicines and medical supplies.
The joint statement from the ASEAN and Japan stressed how closely the countries had worked together to overcome previous crises and stressed that this would happen again with the pandemic.
“Over the years, the ASEAN and Japan have, on the basis of friendship and mutual trust, worked very closely on various crises, from natural disasters in the region to the Asian financial crisis and global financial crisis. The ministers believe that the ASEAN and Japan will overcome the economic challenges brought about by the Covid-19 outbreak through continued and closer collaboration,” they stated.
There have been fears expressed globally about the potential for another intensification in global trade wars and protectionism as nation states struggle to recover from the crisis and secure essential goods. The ASEAN and Japan committed to keeping markets and the global supply chain as open as possible through the crisis.
“In order to mitigate the adverse impact of the Covid-19 outbreak on the economy, the ministers express their commitment to make utmost efforts to keep markets open and prevent stagnation of economic activities in order to maintain the regional and global supply chain, for the smooth flow of essential goods, including food, commodities, medicine, medical and health supplies and equipment, in accordance with the rights and obligations under the World Trade Organization covered agreements,” they stated.
“Furthermore, the ministers emphasise that the ASEAN and Japan, as pivotal suppliers in global supply chains, will make their best efforts to provide various materials and products to the global market in order to mitigate the adverse impact not only on the regional but also the global economy, to maintain market stability and support protection of the health and wellbeing of all people,” added the joint statement.
The global risk management and business continuity community will be pleased to hear that it will to be placed at the heart of renewed supply chain resilience effort. Many would say better late than never.
“Recognising that the outbreak of Covid-19 has highlighted the importance of risk management and business continuity plans in order to avoid supply chain disruptions, the ministers affirm their commitment to strengthen cooperation on building resilient supply chains to enhance the region’s position as a global trade and investment hub. In this regard, noting that the ASEAN and Japan are making collaborative efforts to successfully implement MPAC 2025, it is therefore necessary to take into account multi-faceted perspectives such as diversification, complementarity, transparency, redundancy and sustainability to realise resilient supply chains, which will enable businesses to achieve a better balance between risk management and cost competitiveness,” added the statement.
MPAC 2025 is the vision for ASEAN connectivity to achieve a “seamlessly and comprehensively connected and integrated ASEAN that will promote competitiveness, inclusiveness and a greater sense of community”, as defined by the ASEAN.
The plan is focused on five strategic areas to achieve this vision: sustainable infrastructure, digital innovation, seamless logistics, regulatory excellence, and people mobility
In the statement from the ASEAN and Japan, they announced the addition of an ‘ASEAN-Japan Economic Resilience Action Plan’.
“The ministers task officials to explore, in a timely manner, concrete actions to accomplish the objectives mentioned in paragraph four, through an ASEAN-Japan Economic Resilience Action Plan by mobilising the collective wisdom of the ASEAN and Japan, with the view to contributing to both economies’ overall efforts to strengthen economic resilience in response to the Covid-19 pandemic,” they explained.
The ASEAN and China have also reaffirmed their commitment to forge closer cooperation and further strengthen their strategic partnership at the 21st ASEAN-China Joint Cooperation Committee meeting, which was held via videoconference last week.
The meeting welcomed the progress made in the implementation of the ASEAN-China Plan of Action 2016-2020, which includes a large number of activities and projects implemented in more than 90% of the action lines identified in the plan.
The statement issued after the meeting said progress has been made in areas such as political security, trade, transport, tourism, education, public health, culture and information, media, environment, and narrowing the development gap. It revealed that a new Plan of Action is also being prepared to “further enhance cooperation” for the next five-years (2021-2025).
The meeting emphasised the efforts made by the ASEAN and China in addressing the Covid-19 pandemic, including the Special ASEAN-China Foreign Ministers Meeting on Covid-19, held in February.
“Both sides further underlined the need to step up ASEAN-China cooperation through existing frameworks in mitigating the pandemic and its impact. Participants also underscored the need to ensure the [stability of] regional supply chains, especially for essential goods such as food, commodities, medicines and medical supplies,” read the statement on the meeting.