ORIGINAL PUBLICATION HERE
Countries in Central Asia and Eastern Europe that have been recipients of Chinese investment via projects associated with its Belt and Road Initiative (BRI) should use parametric sovereign cat bonds to insure themselves against the risk of natural disasters.
Belt and Road Initiative has created an even greater need for comprehensive protection solutions across Central Asia and Eastern Europe as China has spent tens of billions of dollars in infrastructure across the region but practically none of it is properly insured against physical damage, despite the region being at high risk of natural disasters with earthquakes in particular.
In countries such as Uzbekistan, Kazakhstan or Tajikistan it is not a question of if an earthquake will hit, but when—and how devastating it will be. In Western Balkans that is prone to earthquakes itself there is an additional threat of massive floods as climate change consequences.