Why COVID-19 will make you rethink your world and why it should terrify brick and mortar stores and business middlemen in Mauritius
Our world didn’t stop. It isn’t on pause. It has changed.
For the past few months, a small parasite — the coronavirus, has been using human bodies as hosts to replicate and stay alive. The resulting disease it causes in humans, COVID-19, is a devastating lung-eater that can consume the lives of those it inhabits. Its survival mechanism exploits the human need for social contact and proximity to jump hyper-aggressively from person to person in a quest to conquer new ground.
However, we know that a vast majority of infected people recover within a few weeks; thus, for the virus to stay alive, it must travel between hosts within a short period of time.
We know how to kill this “alien”: stop or greatly reduce its transmission between people or find a vaccine. By the way, I do not believe that a do-nothing attitude leading to herd immunity is a viable solution in 2020.
Not in our technologically and medically advanced society.
Not when this virus kills so mercilessly.
Not when we are deprived of our most human of traits: touching and mourning our dead the way we should.
For now, social distancing is our weapon to fight the propagation of this disease. I agree with Angela Merkel when she says “at this time, only distance is an expression of care.” The rationale is that if we collectively do this for long enough, it will, as President Trump said previously, “go away miraculously.”
The problem is that we don’t live in an ideal world.
As humans, we all have different beliefs, points of view and needs. We have a propensity to manufacture excuses quicker than any virus can replicate while some blame others gratuitously and with a lack of empathy. We have a track record of consuming and destroying natural resources faster than we can rehabilitate our surroundings, and we often exhibit rebellious traits.
In other words, we are messy.
More, we are not all in the top 1% that can barricade themselves at home for the next century without wanting for cash or what it buys.
In the way our capitalistic world is arranged, most of us have to work to afford the things modern society dictates we should have. But when a third of the global population is confined at home, the economic motor of the world stops.
Those unprepared go into survival mode to hunt for food and supplies in defiance of confinement orders. Others treat this event like a holiday, shrugging it off as overblown, temporary or mass hysteria with the firm belief that life will simply go back to normal after the dust settles.
In countries like Mauritius, employee-centric labor laws have strongly protected the rights of workers till now — we believe in the ability of the state to be the worker’s safety net and step in to cover wages should businesses fail, irrespective of economic realities. We rationalize stimulus packages, bailouts, etc. as giving people what they need now without explaining their potential long-lasting consequences.
Let’s turn a blind eye to past acts like buying new cars we could barely afford, overextending our purse on Marideal for good times at hotels, buying a new Playstation, or that 500-inch TV on credit.
While we’re at it, let’s give a special mention to the terrific bonuses dished out to executives (who can forget those golden high fives!) with little regard to making cash provisions to protect against adverse events and potential economic downturns.
Times were good and we were happy to mortgage our future earnings to enjoy the present.
But as the tide turns, we now expect everyone, including those that sacrificed to live within their means and prepare for rainy days, to chip in and to support a solidarity-driven safety net!
In a similar manner, those that are disregarding the practice of social distancing and wander outside without good reasons are frustrating the sacrifices of those that do. Their actions could prolong the confinement of others, delay a return to national productivity, contribute to people losing their jobs (yes, the longer businesses stay closed the more people are likely to be out of work), get infected and put a strain on the healthcare system, and infect others which could lead to death.
I want to make this clear: if you don’t respect social distancing measures, you may endanger yourself, the people you hold dear, contribute to losing your job or the job of those that put food on your table. Do you think these are acceptable risks? I’ll remind you that firstly, death can’t be fixed, and secondly, printing money for financial relief or disbursing taxpayers money to help you can have serious side-effects.
Indeed, inflating the money supply can be a hidden tax on the population if done without an equivalent increase in an economy’s productivity and depending on where that money ends up. How would you feel to have the purchasing power of your cash savings, the money you have contributed to for years, erode quickly due to inflation?
Additionally, what are the socio-economic issues of championing the bailout of big business on the basis of trickle-down economics and the fear of loss of jobs? It’s like we forgot what happened in 2008 in the USA when bailouts were used greedily in share buybacks to create a class of super-rich elite while doing the bare minimum for employee welfare.
Lest we forget that it is during times of crisis that the biggest opportunities exist for wealth to consolidate and expand. Today, it seems normal to use the public purse to grow private wealth with impunity; judging by the size of the looming economic problem, this could create ultra-rich kings and gods. Good if you are wealthy, sucks if you are not!
However, the truth is that we don’t know what the future holds.
I am not a political person and do not wish to hold a political “you should do this” type of conversation — that is above my pay grade. What I want to convey is that actions have consequences. Actions under challenging times have significant and profound consequences.
What you chose to do is yours to figure out and do. I just wanted to say the things I feel are important, and so that what I say next makes sense.
We are in a health crisis that will likely engender a significant economic one. But it is generally acknowledged that we must first fix the health issue before addressing the resulting economic problems.
The longer this crisis goes on, the more it unravels our dependency on particular countries for manufacturing, the shortcomings of tech permeation to help those in need around the world, how public relations touting 100% digital-readiness in certain societies were grossly exaggerated, and the frailty of the current economic and monetary system.
It is against this backdrop that we hear that this event “is unprecedented” or “there are no playbooks for this.”
Indeed, the past economic issues that we’ve had seem to have been resolved by similar-types of remedies that are not applicable here since this issue does not originate from a systemic financial crisis; we’ve voluntarily committed economic suicide to stop people dying.
After all, we can’t:
- throw money at this to solve the health matter faster. Production of ventilators and equipment or vaccine research takes time and things don’t magically appear immediately even if you pay trillions for it,
- reduce interest rates further— they are already close to zero in so-called first-world economies. Let’s pray that we don’t talk about paying people to take on debt and flog a dead horse (i.e., negative interest rates), and
- keep fiddling with bank balance sheets to loan money into an economy if there are little to no revenues for businesses whose traditional clients have disappeared or are likely to stay away for an extended period.
Against this backdrop, institutions that are perceived as notoriously slow to move, are forced to make quick decisions and show wartime leadership.
They must do something that they often praise, take credit for or speak about but seem to fear to do themselves (maybe?) for want of upsetting the natural order of things: i.e., to innovate. They must seek solutions from outside their go-to people; after all, innovation isn’t bestowed to friends or those with reputable names, but often come from the unknown (e.g., we fly today because of the Wright brothers, bicycle shop owners).
I agree. This is, indeed, “unprecedented.”
I raised questions above that painted a bleak spiral into a rich-get-richer scenario. But there is another outcome, which I think is more likely in economies like Mauritius. In this lockdown, people are seeking ways to get essential supplies, pay for things, entertain themselves, conduct business, deliver educational courses, and more.
This exposes huge business opportunities for entrepreneurs.
The Internet, technology so often demonized as resulting in anti-social behaviors, is now a utility like electricity or water, a tool that has become the middleman in socio-economic interactions.
Let’s unpack what this could mean:
- We are finding out that work-from-home is a viable solution. The middleman of work used to be roadways and offices; why put up with traffic if we have Zoom, Slack and Trello? Why have a big office, when we can work remotely? These are serious questions that should be answered by those wanting to stay competitive — for e.g., what are the activities that are fine for work-from-home (say, data entry), and those that aren’t (such as, manufacturing, logistics, etc.)?. Indeed, work-from-home is increasing in popularity and is already embraced by freelancers.
- Why do we need to go to a supermarket when we can order food and supplies online directly from wholesalers (or online supermarkets)? Why don’t supermarkets do drive-throughs? This is common in other countries.
- Why can’t the central bank issue a Mauritian digital currency directly to a digital currency wallet provided by the government instead of using commercial banks as a middleman? Something like this was proposed in March 2020 in the USA as part of the stimulus bill.
- Why don’t we save time and shop online for clothing items reducing our trips to malls and physical stores? This is not new and already prevalent in digital-driven economies.
One should simply consider the above to grasp the potential impact and change that can be felt if this lockdown, or even relaxed social distancing measures, continue for the rest of 2020. The reality though is that we already knew these changes were inevitable, but we anticipated that the migration and training of workers towards modern and digitally-driven systems of work would happen over a much longer period of time.
Meanwhile, bright young Mauritian companies are playing in the online playground by offering digitalization solutions, cheaply and quickly. While long-standing protected relationships control the B2B space, getting the attention of individuals in a B2C play is up for grabs and this is where David can thrash Goliath. This is where Twitter and Facebook killed the impact of mainstream media. This is where Amazon killed activity in US malls.
More, these young upstarts can work remotely, have few overheads, are very agile and can provide more affordable solutions than existing service providers. They weave a human touch in their approach that is difficult for corporate behemoths to fake and are patient when teaching people how to use online services. They also have a knack for authentic communication which is critical to generate online attention.
The upcoming competitive showdown is likely to grow more intense if the social distancing measures last longer.
In Mauritius, this war is asymmetric— the battlefield is not B2B but B2C, where Goliath is most at risk. David is preying on maximum online attention to get the end consumer’s trust and business. This was previously something only Goliath was able to afford with radio and tv coverage, billboards, online advertising, and brand power. That’s no longer the case.
Yes, the world has changed. Only time will tell by how much.
By James Duchenne. XTM; 2020.
James Duchenne is the CEO of Ducorp, a family investment co., and Ducorp XTM, a young media, marketing, and advertising company that also runs a brand incubator and accelerator program. James is a founding member of Tomaurrow, a not-for-profit initiative that helps Mauritian SMEs get online and conduct e-commerce during the COVID-19 crisis. James holds degrees in Aeronautical Engineering and Law and tertiary qualifications in Applied Finance and Investments, Carbon Credit Assessments, Digital Currencies. He was previously managing partner of Sutton Stone, a US blockchain advisory firm he co-founded in 2014, a representative of the Mauritian Board of Investment in the USA and board member and advisor to several companies internationally. The views in this article are his own, and not that of Ducorp Ltd, Ducorp XTM, LLC or XTM, Ltd.
