COVID-19 Business Support: Analysis, Forecast and Scenario Planning

Organisations across the world have gone into crisis management and business continuity mode due to the effects of COVID-19.

Going forward you’ll need to start monitoring the tactical impact of this global emergency and understand what affect the pandemic is having on your supply chains, operations and wider business activity in order to make better decisions and recover as quickly and efficiently as you can from this crisis.

On Wednesday 25th March, Intelligence Fusion’s CEO Michael McCabe, hosted an exclusive webinar outlining the various possible outcomes and detailing the wider implications of each scenario including;

• Short and long term impacts on the medical sector
• Implications to the society including criminal consequences, a rise in extremism and mass unemployment
• The affect on business and the potential global recession

As well as how some of the world’s largest companies are using the Intelligence Fusion platform in order to risk mitigate their global operations.

Did you miss the live event?

You can now catch up, on-demand.

 

Throughout the webinar, our listeners sent the team some fantastic questions but due to time restrictions, we just didn’t get round to answering them all.

So, here they are:

What are the impacts of COVID-19 on safety and security across Asia-Pacific?

Economies of the Asia-Pacific region have been hit hard by the outbreak, particularly those which are heavily reliant on Chinese industry or exports to Chinese markets.

Restrictions on workers in the manufacturing sector led to a global shortage in key goods as production dropped signifcantly, causing knock-on effects as supply chains struggle to source raw materials or workers.

At a general level, social unrest is often associated with poor economic performance. With economic preformance being significantly reduced due to the spread of COVID-19, social unrest is possible. Furthermore, the police response to such social unrest is expected to be severe, especially if COVID-19 related restrictions are still in place.

More afluent states in the region such as Singapore (who’ve introduced a S$48 billion stimulus package) and South Korea have been able to provide financial assitance to workers and industries which have been impacted by the outbreak, however this isn’t the norm across the region. In countries where less financial assistance is available, workers who are already on low incomes may find themselves falling into poverty, causing long term socio-economic problems which will continue to present a challenge for governments after the outbreak has been contained.

China has seen protests in Hubei Province due to disputes over the movement of workers between Hubei and Jiangxi. Both provinces have different rules in place regarding restrictions over the virus, leading to a dispute between the two provincial police forces over workers travelling from Hubei to Jiangxi. Similar cases such as that seen in Hubei may occur elsewhere in the region.

Human trafficking is expected to increase in response to restrictions placed on the movement of people, with traffickers decicing to move people into or out of areas with severe restrictions. And it’s possible that violent criminal activity may accompany this.

If ordinary terrorism is on the decline, is COVID-19 a new form of terrorism? Let’s say bio-terrorism? 

There’s no evidence to suggest that COVID-19 is a biological weapon. However, given the major impact that this outbreak is having on government and governance, terrorist groups (notably right-wing or nationalist groups) will likely exploit the fallout and use it as part of their narrative.

Do you see other visible signs of Italy disavowing European sentiment in favor of Russia, due to their support in the midst of the crisis? Or is some Italian’s opinion currently an emotional and non-rational response amidst stressful times?

There’s been some social media footage of Italian authorities replacing EU flags with Russian flags in their municipal offices. Nationalist politicians in Italy will no doubt attempt to capitalise on the perception of impotent in dealing with this crisis by the EU and their initial encouragement to keep borders open as well as a lack of solidartiy expressed by EU member states with Italy.

Italy has also announced it would be the first EU country to take part in China’s Belt and Road initiative which may further undermine relations with the EU. A large part of this decision was due to Italy’s stagnating economy and a perception of frustration with the EU at being unable to revive it at the expense of the Germany economy.

It’s likely the economic ramifications of the current crisis may further exacerbate tensions between the EU and Italy which Russia may exploit in the short to medium term.

Are there any reports seen yet of countries under reporting fatalities? Note in Italy there are reports of moving bodies by non-conventional means which might indicate a higher toll.

Iran has been accussed of vastly under reporting fatalities. Thailand has also been recatagorising deaths under various forms of pneumonia rather than COVID-19.

Whilst Germany has been accussed of incorrectly labelling serious cases of COVID19 – as of the 25th March they’ve reported 37,323 cases, 206 deaths but just 23 serious cases. It has been reported that Germany has been reporting deaths of patients due to pre-existing health conditions rather than directly COVID-19.

Doubts have also been raised over China’s claims that the virus is now reducing, as fears have been raised over a second wave of infections.

How do you think the pandemic will impact humanitarian workers in the field and in cases where they may not be able to deliver aid?

We may see a shift in resources in funding streams, with the potential that some causes or crisis may be underfunded because institutional donors may be putting their money more towards COVID-19.

A global recession caused by COVID-19 could also impact individual donors and how much NGOs are able to fundraise. There may be an influx of funding towards Water, Sanitation and Hygiene (WASH) projects, especially in refugee and internally displaced camps.

Depending on perceptions in certain countries, NGO workers may be at risk if local populations regard them as bringing in COVID-19 into their countries, especially as the epicenters of the epidemic are currently in Western countries.

One of the challenges for NGO workers may also be access, as countries are closing their borders more and more. This impacts NGO workers trying to leave countries to return to Europe or the U.S, and also the opposite with NGO workers and specialist staff trying to leave the U.S. and Europe to be deployed in the field.

What contingency measures can we, as an organisation, put in place in a country where the medical/health system is weak?

With a vaccine or effective treatment a few months away at best, the most effective way to slow down the transmission rate is through social distancing measures and to ensure and promote regular and persistent hand washing.

A strong relationship between organisations and the local community will be therefore be crucial to ensure continued operation in the coming months once any restrictions on businesses are relaxed.

Organisations operating in countries with weak health systems will likely also be operating in areas of poor governance with their relationship with the government being one marked by distrust and frequent power/water outages. Organisations should be aware about any challenges facing the local population during this crisis and do their best to help address these challenges, especially issues, such as water outage/supply issues, that directly impact the transmission of this disease.

The longer the economic affect of this outbreak on less-economically developed countries and vulnerable populations in particular, the greater the risk of civil unrest. Therefore, good relations with the community is hugely important. A poor relationship could lead to the organisation being the target of protests.

What are the short and long term impacts on the logistics sector, especially on the import and exports business?

Short term impacts include immediate supply chain disruption due to sick workers, country lockdown rules and export restrictions by domestic governments. Longer term impacts include increasing protectionist policies by governments, liquidity issues and credit defaults by suppliers or vendors and a relocation of manufacturing plants away from China.

A potential financial crisis may also undermine purchasing power of various currencies or create domestic unrest in affected countries disrupting business operations.

Borders and border control might take national stage, and will it contribute to rise in political extremism?

In Europe, we’re already witnessing this with nationalist groups claiming that the EU has been impotent in the face of the pandemic and that open borders have only increased the spread of the virus. Policies of globalism and worldwide supply chain vulnerabilities have been exposed with many political parties, especially in the west, arguing for a return to home grown industry and even protectionalism.

What’s the impact of the current pandemic crisis on Latin America’s economy and their external debts?

The economy of Latin American countries will take a significant hit, with some hit worse than others. This is due to the decline in demand and price of commodities as countries and companies shut down their production lines as they go into quarantine, as well as disruptions in supply chains and tourism. Economies that are heavily reliant on trade with China and the United States will be significantly impacted depending on the slow down in growth in those countries.

The price of copper going down is impacting Chile’s economy significantly as it is the top producer of copper. Mining has accounted for approximately 10% of Chile’s GDP for several decades, and a slowdown in the demand for minerals will impact it hard.  The COVID-19 virus also compounds the economic effects already felt by months of political unrest.

Ecuador said it would look for emergency funding to get through the COVID-19 crisis, and will look into possibly restructuring some of its debt repayments. The economy of Ecuador is heavily dependent on petroleum resources, and the price of oil being so low has significant impacts.

China is buying large quantities of soybeans from Brazil at the moment due to a weak ‘real’ (Brazil’s currency), but the crisis may put even more strain on the supply chains, as ports in Brazil are already backed up due to high demand, delays in harvest, and high rainfall in February. There has been talks of strikes by port workers demanding better safety measures against COVID-19, but nothing has materialised yet. Any port strike would be detrimental to the Brazilian economy. The price of oil going down will also impact Brazil’s economy.

Argentina was already in a recession for the past two years, and the pandemic does not bode well for the country. President Fernandez had been working to restructure a significant portion of the country’s debt by the end of March, but that seems unlikely at the moment. President Fernandez’s economic recovery plan involved boosting exploitation at the Vaca Muerta shale reserves, but the impact on the global economy makes investment uncertain, and current oil prices would not make it sustainable. The country is currently on lockdown from the 20th of March to the 1st of April, slowing down the economy, and if it is extended, it could impact the soybean harvest in April, further impacting a critical sector of Argentina’s economy.

Credit Suisse forecasts a 4% shrink in Mexico’s GDP. The border restrictions put in place between the U.S. and Mexico, with exceptions for commercial traffic, will have significant impacts on border cities which rely on cross-border travel and spending. The price of oil going down will impact its economy significantly.

 

Do you have a question?

We’re still working as hard as always to provide you with the most accurate and actionable intelligence as the outbreak evolves, giving you regular COVID-19 related updates over on LinkedIn, YouTube and Twitter. Drop us your quesion over on one of our social channels to be featured in one of our video updates.

If you’d like to follow all things coronavirus a little more closely, we’ve also launched a free, interactive live map of the most recent incidents. We’re not just reporting the latest confirmed cases either, you can monitor wider societal unrest, indicators of economic stress and political developments over on our map.

If you have any concerns or need any additional support from the Intelligence Fusion team during these strange and unprecedented times, please do not hesitate to get in touch.

Stay safe.