Reflections on COVID-19 – The Quasiinvestor

A true test of our mettle

Since first reported in November 2019 in the city of Wuhan, the COVID-19 has spread rapidly globally. It is arguably one of the most significant health pandemics of memory, or at least in many people’s lifetimes, and has thrown a spanner in the works of economic and sociopolitical recovery many countries were clinging desperately on, coming out of recent tumultuous events, for example, the global financial crisis which effects are etched on people’s minds and still evident in many aspects of our lives today, exacerbated by the U.S.-China trade tensions. Microsoft-founder Bill Gates in 2015 warned that we are ill-prepared to respond to a crisis like this, and, as Charles Duhigg wrote in “Smarter Faster Better”, our future can be viewed as a combination of probabilistic events and we are simply not adept to fully appreciate and factor that into our decision making.

Some have drawn parallels between the COVID-19 (or coronavirus) pandemic and the global financial crisis, while others have also done so of the 1918 Spanish Flu or 2002 SARS. A common theme across various analyses is that in some ways, COVID-19 is truly unique in that it comes at a time when economies and people are more connected than ever before and as a result, its impact goes beyond just health, but also profoundly on economic and sociopolitical.

Therefore, after undertaking many considerations, the responses that governments and businesses have taken are generally two-fold. One, how best to contain and minimize the spread of the virus between humans. In doing this, however, leads to the second consideration, which is how best to achieve this while limiting the impact of the economy due to movement and work lock-downs, which essentially almost results in the economic machine grinding to a halt. Importantly, this also leads to the implications of such measures, and the group most impacted is increasingly evident to be the lower-rungs of society. This is one of, if not the most important areas that we need to address.

In addition to that, there are a few key issues that have emerged and/or became more stark and for which the need to address has accelerated. In no particular order, they are:

The stability of our food supply chain, the sustainability of our food sources and, “green investing”
The vulnerability of the less fortunate and lower-income groups, especially in times of pandemics
Tourism and travel
The change in workplace culture, particularly work-from-home arrangements

The stability of our food supply chain, the sustainability of our food sources and, “green investing”

The increasing interest and attention on meat-alternatives in recent years have been accelerated because of the health crisis. A restraint of movement has caused logistics and transportation networks to stall and hence disrupted the food supply chain. Evident to this were reports of people paranoid about the possible shortage of food (far from the truth at least in the U.S., where an estimated 30-40% of food is wasted every year) and hence a world-wide phenomenon of panic-buying and run on supermarkets and the implementation of purchase limits on necessities, while in stark contrast, farmers are having to dispose of perfectly consumable produce in staggering amounts because they are unable to get their food to their customers. The supply and demand for food are likely largely the same, with the difference being how and where people are getting their food and what types of food.

There are many logistical challenges for food producers. It takes time and possibly a lot of restructuring on how food is packed for, and transported to supermarkets before a regular and reliable cadence can be established, which is compounded by the shortage of labor for harvesting. Further, there is a limit to the capacity of supermarkets to store and stock their food, which is likely way smaller than food retail outlets. Even if the food producers could do this, it might not even make economic sense to do so. To address these issues, we can take a macro and micro lens to it.

Countries need to buffer from food supply disruptions and, if they have not yet already done so, start further diversifying their food sources. There are a few ideas to address this. First, they need to establish food supply chains with more countries, ideally diversified by geographic or political boundaries. Next, they can explore shifting towards self-sustenance and greater emphasis on sustainability. Singapore, for example, has targeted to domestically produce 30% of their nutritional needs by 2030 (“30 x 30”). This is done through greater government support in research grants and funding schemes across the themes of sustainable urban food production, advanced biotech-based protein production and underpinned by food safety science and innovation. The Singapore government, in response to COVID-19, has started a “30 x 30 Express Grant Call”, accelerating this initiative. Another example is France, which some has regarded the exemplar of sustainability, introducing legislation such as requiring supermarkets to redistribute leftover food to charities serving poor communities, committing €935M to agricultural development and security in 2018, and ranks highest on the 2018 Food Sustainability Index developed by the Barilla Center for Food & Nutrition Foundation (BCFN).

On the micro-level, how do we reduce food waste and possibly adopt more sustainable ways of farming and eating? We will need to adapt, to make do with what we have, and also be more open to trying new things, such as meat-alternatives. In recent years, food sustainability, healthy eating (e.g. veganism) has gained prominence across the world and one of the silver-linings of this pandemic is that food which has previously been an after-thought is now cast in the spotlight. In Asia, plant-based alternatives such Impossible Foods, which raised its $300M series E in May 2019, made its debut in Hong Kong and Macau in April 2018, Singapore in 2019. To support restaurants and distributors, it has also allowed the direct sale of their burger bricks to customers. With the rekindled love (and perhaps necessity) of cooking, this is a great chance for meat alternative companies to engage in the mass market. Startups still in the development phase, for example Shiok Meats, a cell-based clean meat company (at present focused on shrimp), stand to benefit as well, if they take the opportunity to engage in customer education.

Consumers’ tastes are changing – the rising affluent, millennials, seek sustainability and ethic in their consumption, and businesses need to recognize that that will soon be the norm. More than ever, there is a greater need to strengthen food production, de-risk supply chains, and build with sustainability in mind.

The vulnerability of the less fortunate and lower-income groups, especially in times of pandemics

The growing inequality gap in society is hardly new. However, the extra-ordinary economic collapse caused by COVID-19 has made it rear its ugly head ever more so starkly. The challenges that low-wage workers face, specifically in terms of the affordability and accessibility of healthcare, as well as the accessibility of social support, have been laid bare for all to see. Yet while unemployment is sky-rocketing and leaving people, particularly the poor, worrying about making ends meet, the stock market has rebounded from the trough on March 23, benefiting the well-off the most, many of whom have quickly shrugged off the decline.

Governments have been scrambling to address this. While implementing social distancing and lock-downs have shown to be successful in containing the spread of the virus, in hindsight, although a blanket solution has the critical advantage of speed, adjustments and interventions should be made continually, as the situation and its effectiveness are evaluated. Exercising greater personal hygiene worked well, and now is the time to step it up further, to have more societal awareness and consideration, adjusting our mindsets that it takes a collective effort to overcome these challenges, that there are people who are still struggling in the current situation, and extending more help to those who need it.

In urban areas, lower-wage workers likely live in more cramped housing which perpetuates the spread of the disease. Singapore, which was once heralded for its response to the crisis, is now facing a surge in cases, due in large to foreign workers who are housed in dormitories, where up to 20 people are packed into bunks, making them hotbeds for the virus to spread.

Families might not have ready access to computer or technology devices, or even a stable internet connection, to allow them to study or engage in work and basic services at home. The help they usually get with childcare is likely disrupted, due to the closure of schools and care centers as well as the prohibition of meeting their parents, and now they have to juggle that with the looming threat of an ever-worsening economy and layoffs.

They also are more likely are blue-collared workers, with jobs in the service sector or construction/agriculture industry, that either require human interaction and/or cannot be done remote. This puts them at a higher risk of getting laid off because of the slowdown in demand. Even where there is work, it likely puts them in an environment with a higher risk of viral transmission. Which of these is worse is up for debate. The migrant workers in India faced the former, where the sudden shutdown meant that many had to choose between the arduous journey on foot home, or remain without food, money and shelter in the cities, both choices putting their lives at immense risk.

India has started to run more special trains to help with migrants’ transportation, but the challenge of handling such massive numbers is huge, and especially at a time where communities are wary of welcoming any travelers. In Singapore, dedicated websites have been set up to help migrant workers at any scale and through ways beyond monetary. Startups such as Sama, a digital migrant worker marketplace could go beyond just being a matchmaking service, provide avenues and information (e.g. migrant-related FAQs) for workers to get help, or even create a community for them and residents to learn more about each other and share information. PichaEats, a Malaysian social enterprise, provides a platform for refugees to share their recipes through a meal delivery service and is a great example of how we can engage foreign communities in a mutually beneficial way.

Importantly, governments cannot stop at addressing these problems even if the crisis takes a turn for the better. There has to be a carefully drawn out ledger of accountability, to take to task people or working groups who have failed to address what is now increasingly evident to be long-standing issues and aim to rectify them as soon as possible. We need to rethink how we treat migrant workers and the less privileged, stop making them live in an underclass of their own and start recognizing that they, too, and maybe even more so than many of us, contribute to building this place we call home.

Tourism and travel

We think back fondly about our vacations when we were carefree and invigorated by immersing ourselves in the excitement and sense of fulfillment from discovering a different culture, in the moving encounters and immersive, inspirational moments that uncovers a different dimension in our lives. While we eagerly anticipate the ability to travel again, we are also acutely cognizant that by then, tourism and travel could likely be very different, given how deeply the industry has been impacted.

Technological innovation made travel cheaper and empowered us to be more connected than ever, and the sudden halt of it caused an unprecedented drop that has already caused the demise of many travel-related companies. It was the final straw for Hertz, which filed for Chapter 11 bankruptcy, as did Thai Airways. The ones that are survivng are struggling to stay afloat. Airbnb had to layoff ~25% of its staff and refocus its business, while Singapore Airlines has had to tap the capital markets to tide itself over.

One of the topics more frequently brought up is domestic travel and localism. This is helpful with containing the virus at least within political and certain geographic boundaries and will be great for “re-discovering your own backyard”. For larger countries like India, the U.S., or China, crossing state lines could allow one to immerse in an almost completely different culture or experience. Even more optimistic would be the view that countrymen could take the opportunity to learn about and understand one another better. For smaller countries, tight co-operation in the flow of travelers within inter-governmental alliance zones (e.g. ASEAN) could also bring about greater socio-cultural integration and a great way for countries to find out more about their neighbors. Related is also the idea of “travel bubbles“, where arrangements are made between countries to facilitate trade and tourism, such as between New Zealand and Australia.

There could be a greater focus on the outdoors and eco-tourism, activities that are more immersive and experimental. Related to the point on sustainability, we might look for travel options that emphasize not just taking in experiences, but also giving back. There has already been a growing demand in sustainable, responsible and ethical tourism, especially in the growing middle-class and millennials, and could potentially take flight as a result of the pandemic. We are already afforded more time and opportunity to be closer to nature because of our movement lockdowns and many of us might find ourselves discovering an interest in it, wanting to uncover more. The growing prominence of companies such as Fair Voyage, which “find & customize best fair trips with verified sustainable destination experts”, is a positive sign of this. Organizations like the Sumba Hospitality Foundation which is vocational hotel school for young, underprivileged people of Sumba, Indonesia and is also a luxury eco-resort, can hopefully flourish more.

We feed our wanderlust and chase away our isolation blues through photographic collections and books, and we have to be cognizant when we next get the opportunity to travel, it could and would likely be very different. The World Travel & Tourism Council has defined new protocols and measures that will hopefully restore people’s confidence to travel again. Keeping an open mindset to that and having even greater respect for the places we travel to and people we meet, as we should with every adventure, will greatly enhance our experience, and is ever more so important in a post-COVID-19 world.

The change in workplace culture, particularly work-from-home arrangements

Snaking lines at the computer accessories shop, crying babies wanting to join in a discussion, lush greenery you sorely miss in the background – these are some of the familiar and defining experiences in our lives, as some of the workplace transits to remote working at home. While there initially might be potentially head-aching to-dos like getting a home office setup ready, managing the logistics of child care, figuring out a routine to keeping up with workouts and meal preparation, those who have the ability to make this transition should consider themselves fortunate and can embrace the change.

We can take this opportunity to get into a rhythm of working outside of the office, become more efficient with it and discover new ways to achieve work-life-harmony (as Amazon founder Jeff Bezos promotes). Many have saved time from long work commutes and can work more efficiently without the distraction of co-workers. They are able to put the time savings and greater control of it to good use. The meteoric rise of work-efficiency connectivity tools like Zoom, Google Hangouts, and Slack have appeared to be relatively smooth in their adoption, not just at work but also in schools. At the same time, we can continue to use them better to help us and our co-workers.

Users need to be more deliberate with their use of video conferencing. Researchers have opined that being on a video call, as opposed to a face-to-face conversation, implies that we need to make more effort to “process non-verbal cues like facial expressions, the tone and pitch of the voice, and body language“, which takes more energy. On top of that, we feel that we are constantly being watched and it is a stressful reminder that we have lost the social interactions that are basic requirements of humankind. In addition, no longer can we just “swing by” a colleague’s desk to chat for a few minutes for help.

Being aware of this, we should schedule our video calls more carefully and purposefully. Not every meeting has to be fixed blocks of 30 minutes or an hour. Be clear on what the agenda and objective of meetings are and communicate them. Having an idea of who you actually need versus who you feel might be “good-to-have”, as well as giving them the option, and feel perfectly fine to opt-out of a meeting is important too. One could also be polite about rejecting a meeting or suggesting a different time if their attendance is mandatory. Making a video call effective and efficient also means adopting best practices like not multi-tasking and taking your turn to speak. Don’t fall into the trap of becoming a Zoombie. Managers and co-workers can spend time checking in with one another on their well being rather than being fixated only on business discussions. We need to take care of ourselves as well and take breaks. As the Chinese proverb says, “Resting is so we can go further”.

While we are still learning and adapting to the process of working from home, its importance increases with the possibility of it being the new norm. Large companies like Facebook, Visa, and Google, to name a few, have already started making this the norm rather than the exception, and many others are starting to warm up to it. The past few months have shown proof that we can indeed be as efficient working from home and we will almost certainly only get better at it. In fact, we could even take the opportunity to upskill, discover a new hobby, or volunteer, leveraging on technology through platforms like Vollie, that connects skilled people to non-profits and charities for skills-based online volunteering.

However, the workplace is not simply somewhere that work gets done, as it also provides a platform for social interaction that might be hard to replicate online and working from home can be hard for parents who have to supervise their children or for those who do not have conducive home office environments. The end result could be a balance along the spectrum – greater freedom and flexibility to choose where to work and how you manage your workload.

An epochal moment in history

The push towards Environmental, Social, and Governance (ESG) investing has for the longest time been a passing fad or at best acknowledged superficially, but this could and should finally be the time it gets the attention it deserves. Milton Friedman’s old maxim that the social responsibility of business is to maximize profit is a posture that has to change and we need to conscientiously build the bridge between traditional business and philanthropy, as well as financial return and societal benefit. The impact investment thesis is indisputable: there is long-term benefit in going after the double-bottom line. On a personal level, we can look inward and ask ourselves what truly matters. If there’s a need for a trigger to make a change, perhaps this is the one.

The COVID-19 pandemic is an epochal moment in history. It has to serve as a wake-up call for all to place greater emphasis on greater inclusive growth, which is crucial not only for a more equitable society but one that is stronger, more resilient, and long-lasting. Societies are more connected than ever before and we need to collectively work together to uplift one another, not simply beggar-thy-neighbor protectionism. We need to recognize that change is not a spectator sport. While it brings great challenges, I believe that if we continue having compassion for one another, maintain open-minded and optimistic, we will come out of it a more resilient society.

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