Wuhan, the sprawling city is the commercial hub of Central China ensconced between two rivers Yangtze and Han. It has been identified as a ‘creative city’ by UNESCO in the field of design, housing 4 science and tech development parks, over 350 research institutes, high tech enterprises, and business incubators.
Wuhan is also home to over 25 universities with the city and province of Hubei being home to 4,600 students from 12 African countries. It was identified as the epicenter of the Covid-19 outbreak is home to live animal or wet markets suspected to have been the origin of the pandemic. Reports indicate the first case in Africa of the Coronavirus was detected in Cote de ’Ivoire from a returning student from China – reported in January 2020.
The pandemic which started as a human and health occurrence has morphed into a socio-economic crisis of immense proportions. Critics have had a field day quoting scientists and futurists who had been predicting a pandemic of this kind as early as 2014 – Bill Gates, Laurie Garrett among others.
Business analysts say that while quarantining and lockdowns are good for our health and the respective communities, it has not been good for the economy. This crisis may be the worst socio-economic event we have witnessed since the Second World War – though in actuality it’s not an economic one but a human event. Some have described it as the new normal and others still as a Black Swan event – a black swan is a highly improbable event which is unpredictable, carries massive impact and after the fact, we concoct an explanation that makes it appear less random and more predictable than it was.
Nassim N. Taleb in his book, The Black Swan (2010), notes “black swans underlie almost everything about our world, from the rise of religions to events in our personal lives”. He continues by saying, “humans are hardwired to learn specifics when they should be focussed on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don’t know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate and categorize and not open enough to rewarding those who can imagine the ‘impossible”.
Early this year, in a New Yorker article, he gave a dissenting view that the pandemic was a white swan – wholly predictable opining we need to change business practices and social norms – not…to provide ‘a cliché for any bad thing that surprises us.’ “We issued our warning that, effectively, you should kill it in the egg”. Governments “did not want to spend pennies in January; now they are going to spend trillions”.
What captured my attention though all the events around the pandemic is the part of changing business practices and social norms. In the next few passages, I’ll note some which may have changed especially a Kenyan level, due to this pandemic;
- Mobile payments in Transport and Small Businesses. A little over 2 years ago, mobile telcos in Kenya launched mobile money payments for fares. Public service transport had resisted this and largely sabotaged the plans. They have had to make these as the preferred mode of payment in the last two months. This too has been the case for smaller businesses including your local kiosk. Will this continue? Only time will tell.
- Universal Access to the Internet. When the President announced the deployment of Internet access using balloons – Project Loon – in one of the addresses to the nation during the early stages of the pandemic in Kenya, it may have been missed by most. Using a system of balloons to beam high-speed Internet access with Telkom Kenya, Alphabet – Google’s holding company marked its first commercial deal in Africa. This technology was used in Puerto Rico after a hurricane in 2019 to provide connectivity to 250,000 people. This will be an audacious if not life-changing experience for Kenya rural communities.
- Affordable Access to Water. In most if not all urban centers across the country, we have seen the provision of water access points mainly for hygiene reasons. For what was previously improbable or impossible, suddenly affordable water is available at local levels and without the commercial hawks that are the water vendors. Whether this will continue beyond the pandemic or after the long rains, we shall see.
- Virtual Court Sessions. It was monumental when in late March when judges and magistrates handled 203 cases in 10 days through video conferencing. The local judicial system suddenly woke up to the reality of fast-tracking legal issues brought before the judges and magistrates. While it has been a mixed basket especially at higher courts, it shows with improved Internet access and goodwill from the Justice Service Commission, the law can indeed take its course.
- Reduced Disease Incidence. There is a reported incidence of some diseases in most areas. Whether it is a case of reduced hospital visits to ward off any testing fears or it is less reported cases, the medical facilities indicate a reduced number in most infections. This may lead to a rethink of individuals and households of whether it is important to pay your clinic a visit on the slightest of health concerns.
- Reduced Carbon Emissions. We have seen photos of newly snow-capped Mt. Kenya and a visible Mt. Kilimanjaro from the outskirts of Nairobi. While some have been clear exaggerations, what’s clear for us, and the environmentalists’ interests, we will need to become deliberate on reducing carbon emissions and managing pollution. A related link to the reduced chest and ENT infections? Who knows?
- Reduced Cost of Renewable Energy. While the cost of oil has hit new lows driven by low demand, there has been a corresponding decrease in the cost of renewable energy such as solar and hydroelectricity. In the short-term, this will be a plus for manufacturing concerns and production lines, how long this continues will impact the cost of doing business as the economy slows picks up post-COVID.
- Church Confessions. The Pope in a live-streamed Mass on March 20, the Pope announced that “people who cannot get to confession because of the coronavirus lockdown or other serious reason, can go to God directly, be specific about their sins, request pardon and experience God’s loving forgiveness”. He continued, “as the catechism teaches, you can draw near to God’s forgiveness without having a priest at hand. Think about it. This is the moment.”
These are but a few that are within our sphere of influence. In all this, it shows that businesses and socio-economic acts have a deep stake in a functioning economy and keeping the citizenry healthy. McKinsey in an article titled –Tackling Covid-19 in Africa ask the following questions;
- What trade-offs do governments need to make to ensure their countries’ future economic strength while adequately addressing the near-term crisis? For example, these might include making difficult strategic decisions around which companies or sectors to support.
- What conditions can and ought to be imposed on businesses in exchange for financial support? For example, what measures can be taken to ensure that support is used to pay salaries and maintain jobs? Additionally, should entire sectors be restructured and reformed as part of any intervention package?
- How do governments manage the trade-off between protecting the health of vulnerable populations and protecting the economy? When, and how, is the decision on returning to work going to be made?
- What are the best ways to provide targeted support to the most vulnerable populations, rather than offering broad-based support via tax, sector, or cash transfer incentives?
- What would be the long-term human-capital implications of these measures, and how could we mitigate those? For example, school closures are necessary now but may negatively impact the quality of education and drop-out rates. This pandemic and other black swans will become the new norm. There will be changes that will be made in our lives and how we do our business. I believe there will be heavy Government involvement and engagement in how countries emerge from this. Governments have adopted emergency measures to manage the crisis and with this newfound power, most will loathe to surrender it when this is over.
Will there be a change of the global economic direction from Western-driven globalization to Asian or more specifically China-centric globalization? The majority of Asian economies have handled the crisis much better than the Western economies – with South Korea managing to flatten the curve by the end of April. Singapore has a reserve of $60 billion (approx.KES. 6.43 trillion) from its national coffers showing the prudence and frugality of the state, helping to cushion incomes and companies as they navigate this crisis.
However, the US-China relations which have sunk with this crisis will most likely affect international trade and the globalization narrative in the short and medium-term. I believe how the rest of the world emerges and engages with each other will move either us from a sluggish global recession to an accelerated economic resurgence.
The crisis has shown the power of the human spirit – from doctors volunteering to fly to high-risk countries, to individuals offering free online sessions to connect with ordinary citizens and others still offering their pay to cater to support staff. This demonstrates the resilience, connectedness, and effectiveness of our human spirit.
We can reset and kickstart a more inclusive, innovative, rewarding, and transparent country. We can also continue along a treacherous and tried path of inequality, less accountability, and wastage which has not been largely successful thus far. This is towards a more compassionate, caring, and hopefully sustainable world for us all. For now, our focus is on flattening the curve of the pandemic, improving our healthcare systems, and rejuvenating the growth of this great country.
- The Black Swan Book – Nassim Nicholas Taleb (2007)
- The Pandemic Isn’t a Black Swan but a Portent of a More Fragile Global System – Bernard Avishai – New Yorker article (21 April 2020)
- Tackling COVID-19 in Africa – Kartik Jayaram, Acha Leke, Amandla Ooko-Ombaka, and Ying Sunny Sun – McKinsey & Co. article ( 1 April 2020)
Article by Richard Wanjohi
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