Griffith Asia Insights
Safeguarding agribusiness: How governments in developing Asia can strengthen export resilience amid natural disasters
MADHUSHIKA PERERA AND SHYAMA RATNASIRI |
Natural disasters—whether cyclones, droughts, floods, or earthquakes—are increasingly frequent and severe, with profound implications for nations around the globe. In developing Asia, where agribusiness plays a pivotal role in employment, economic stability, and trade, the consequences of these disasters are especially acute. Our new study sheds light on an often overlooked dimension of this challenge: the role of government effectiveness in mitigating the impact of natural disasters on agribusiness export competitiveness.
This study, which examined data across eight developing Asian countries—Sri Lanka, Thailand, Bangladesh, India, Indonesia, Nepal, the Philippines, and Vietnam—delivers critical insights into how effective governance can serve as a buffer against the external shocks caused by natural disasters. At its heart is a compelling message: while natural disasters pose undeniable risks to agribusiness export performance, the quality of government response and policy implementation can significantly soften the blow.
A growing threat to agricultural trade
Natural disasters are not new to Asia, but their intensity and frequency are growing due to climate change and environmental degradation. Between 2000 and 2020, disasters affected over 162 million people in Asia and inflicted economic damage exceeding $4.2 trillion—a 45 per cent increase in affected populations and a 36 per cent jump in economic damage compared to the previous century.
In rural economies, these shocks directly disrupt agricultural production and supply chains, often damaging crops, destroying infrastructure, and reducing farmers’ capacity to meet international trade demands. The result? Declining export competitiveness, loss of market share, and long-term economic setbacks for producers and national economies.
Measuring the impact: Evidence from eight nations
We explore the empirical relationship between natural disasters, government effectiveness, and agribusiness export performance. The study uses annual panel data of bilateral agribusiness export flows and a fixed effects model to analyse eight developing Asian countries where agribusiness exports are especially significant.
The findings are clear: natural disasters reduce agribusiness export competitiveness. However, this negative effect is significantly moderated in countries with more effective governments. Government effectiveness—broadly defined in terms of quality of public services, policy formulation and implementation, and credibility of government commitments—is a powerful tool in mitigating the damage from natural disasters.
Government effectiveness makes a measurable difference
What sets this study apart is its country-specific analysis. The effectiveness of government action in reducing the negative trade impact of disasters varies across the eight countries studied. For example, Thailand’s government seems to be the most effective in helping its export sector bounce back after disasters. Sri Lanka, by contrast, shows the least ability to lessen these negative effects.
This disparity highlights a crucial insight: while good governance helps everywhere, its success in protecting agribusiness exports depends on local contexts, institutional readiness, disaster preparedness frameworks, and the extent to which governments can translate policy into action.
Policy implications: Building resilience from the ground up
So what does this mean for policymakers, especially in regions where natural disasters are likely to intensify?
First and foremost, the study underscores the need for greater investment in institutional capacity. Governments must strengthen their disaster risk management systems, improve coordination among agencies, and ensure timely and transparent communication with stakeholders in the agribusiness sector.
Moreover, building infrastructure—such as climate-resilient irrigation systems, early warning mechanisms, and rural logistics networks—can reduce the physical vulnerabilities that exacerbate disaster impacts. Complementing these physical investments, policies that facilitate access to credit, insurance, and market information for farmers and exporters can further enhance resilience.
Importantly, the study also reinforces the value of international collaboration. Trade partners and development agencies have a role to play in supporting knowledge exchange, capacity building, and funding for disaster preparedness initiatives in agribusiness-dependent economies.
Looking ahead: Research with real-world relevance
In a global environment marked by rising geopolitical uncertainty and accelerating climate change, understanding the complex interplay between natural disasters and trade competitiveness is more important than ever. This study provides empirical evidence to validate the role of an effective government in moderating the impact of natural disasters on agribusiness export competitiveness.
The takeaway for governments, particularly in developing Asia, is clear: effectiveness matters. By strengthening governance and investing in resilient systems, countries can better withstand the economic shocks of natural disasters and safeguard the competitiveness of their agribusiness sectors in international markets.
This research offers a valuable resource for policymakers, development practitioners, and academics alike. As the frequency and intensity of natural disasters continue to rise, only those countries that invest in both resilience and good governance will be able to sustainably protect their agricultural trade future.
Madhushika Perera and Shyama Ratnasiri (Griffith Asia Institute) are members of the Department of Accounting, Finance and Economics, Griffith Business School, Griffith University
This article is a synopsis of the journal article: Perera, M., Ratnasiri, S. Natural disasters, government effectiveness and agribusiness export competitiveness: Evidence from Developing Asia. Natural Hazards (2025). https://doi.org/10.1007/s11069-025-07159-6.
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