According to UK-based insurer Lloyds, Saudi Arabia’s capital city of Riyadh is more resilient than other cities globally thanks to the government’s economic diversification drive and efforts to tackle urban challenges.
This achievement is despite the city’s low population density and arid conditions, the report said
The Lloyd report titled ‘Cities at risk – Building a resilient future for the world’s urban centers,’ discusses current and potential risks facing cities globally. The pace and size of Saudi Arabia’s economic reforms, the diversification from oil to a mixed-service economy and a variety of initiatives such as new smart city projects and the development of a metro network have contributed to the city’s resilience, it said.
“With solid investments in public transport and smart city initiatives, the city is well positioned to manage its explosive population growth. Lloyd’s stands ready to help maintain this upwards trajectory by working closely with local authorities, regulators, governments and the Saudi market to build resilience against risks associated with high temperatures and flash flooding,” Andrew Woodward, Lloyd’s regional manager for the Middle East and Turkey, said.
The study was released in collaboration with Urban Foresight, a smart city consultancy, and Newcastle University and commissioned before the COVID-19 pandemic. Seven case studies investigating Riyadh, New York, Shanghai, London, Miami, Mexico City and Johannesburg are discussed in the study. These cities, which have the characteristics of other metropolises around the world, are used to illustrate global challenges and as scenarios for understanding how to handle or minimize specific risks.
Why the study?
The purpose of the study is to help city planners and risk managers understand the risks that, in the coming decades, will impact the design and function of cities, how these challenges can be reduced and how local authorities should collaborate with insurers.
The research comes as the crisis of COVID-19 increases the attention of the world on the capacity of cities to withstand the effect of threats such as pandemics, highlighting features that lead to greater resilience and vulnerability. The crisis has also demonstrated the effect that structural threats can have on urban areas, with significant economic and social implications spreading worldwide.
“The commissioning of this report was prescient,” Graham Throwers, head of infrastructure and investment at Urban Foresight, said. “As cities continue to evolve, their shape and functional performance is being questioned like never before. Recent events have highlighted the importance of our great cities as concentrations of economic, political and social activity. They are also environments in which risks concentrate.”
Risks faced by cities
It studies four major trends – the effect of climate change on cities, the use of technology for urban infrastructure development, middle-class growth in emerging economies and older populations in developed countries and smart city development.
According to the study, cities face four key threats. First of all, global geopolitical tensions raise uncertainties and discourage long-term investment. “The risk of resource scarcity, social unrest, pollution, pandemics and terrorism is more acute,” it said.
Secondly, cities are struggling with climate change challenges, with urban population concentrations making cities and their inhabitants more prone to severe weather events.
Third, cities are becoming more interconnected and dependent on smart technology that produce a large amount of data, rendering them more vulnerable to catastrophic scenarios such as space weather that destroy satellite communications, cause power outages or disrupt the flow of information that could threaten the essential infrastructure on which cities depend.
Finally, according to the Lloyd’s City Risk Index, cities stand to lose the most gross domestic product (GDP) from financial risk, including market crashes, commodity price shocks and sovereign default. “Economic development could become a serious challenge,” the Lloyds report said.
The London-based insurance marketplace has found that cities in general are underinsured for these forms of risks.
Thank you very much for choosing GCC Business News to be an important part of your professional life. You will receive a confirmation e-mail. Please check SPAM or UPDATES folder
