Looking back at 2025, news of massive flood damage has been unusually frequent across Southeast Asia, including Indonesia and the Philippines. The World Risk Report ranked the Philippines first, with ASEAN countries including Indonesia, Myanmar, and Vietnam among the highest-risk nations. Notably, extreme weather events—not unemployment, economic recession, or escalating U.S.-China tensions—were identified as ASEAN's greatest risk.
Climate issues have emerged as a structural crisis threatening not just the environment but society and the economy as a whole. Many major ASEAN cities have weak foundations where land subsidence is progressing faster than sea-level rise. Water consumption has surged due to population growth and urbanization, but sewage and water treatment infrastructure has failed to keep pace.
As someone working in Hanoi, Vietnam, I have witnessed significant changes firsthand. Typhoons that once concentrated in the central region now frequently reach the north. In low-lying areas, water rises to thigh level in an instant, and drainage takes days even after the rain stops. Rather than simply blaming climate change, the limitations of outdated urban infrastructure appear to be the greater problem.
ASEAN has now entered a phase where climate risk is translating into economic risk. Flooding, power outages, and transportation paralysis directly lead to logistics disruptions and reduced industrial production. As these become threats to overall business activities, demand is surging for smart social overhead capital (SOC) integrating roads, power, drainage, and disaster prevention, as well as climate-resilient infrastructure.
International institutions including the World Bank, Asian Development Bank, and Asian Infrastructure Investment Bank are expanding related investments, opening doors for Korean companies to enter markets combining design, construction, information and communications technology (ICT), operations, and project financing.
The solutions are clear. Groundwater dependence must be reduced through strengthened water supply and treatment systems, and concentrated rainfall damage must be minimized through expanded drainage and retention facilities. Ground stabilization, underground structure reinforcement, and urban water circulation infrastructure expansion are also core tasks.
Areas for Korean corporate cooperation include climate-resilient SOC design guidelines, services that monitor high-risk areas with sensors and dashboards, and diagnostics for aging SOC to enhance resilience. Companies can also supply small-scale disaster response products such as mobile drainage and emergency equipment. Additionally, SOC packages providing integrated power and drainage safety management for smart cities and industrial complexes can be offered.
Disaster monitoring, forecasting, and integrated control solutions also deserve attention. Demand is growing rapidly for models that supply mobile hospital, water supply, and power packages during disasters. Vietnam, Thailand, and the Philippines are already pursuing flood preparedness and ground stabilization projects worth billions of dollars. Cambodia and Laos, despite limited resources, are also expanding resilience infrastructure using international institution funding.
Most ASEAN SOC projects have funding shortfalls that make them difficult to cover with national finances alone. Countries therefore seek public-private partnership projects or structures combining development finance and export finance. With international institutions significantly increasing budgets for climate, power, and SOC projects, and the BRICS nations' New Development Bank also entering the field, the development finance market itself is expanding.
If proposals can combine technology, finance, and operations, participation possibilities increase. An approach is needed that designs project concepts, funding, and operational models as packages from the initial stage, links them with international institutions or export finance, and builds strategic partnerships with local governments or state-owned enterprises.
As economic and cultural exchanges with ASEAN deepen, cooperation to overcome climate change together can become an opportunity for new mutual growth.
