Emerging from the Black Swan's shadow

The most startling thing about the Covid-19 crisis is that it came out of nowhere, nobody expected something like this. And that’s why it’s a Black Swan event. 

Over the last few decades, Planet Earth has been bracing itself for nuclear flashpoints (involving US/China/Russia/Iran/North Korea), or wars between traditional enemies(India-Pakistan, Israel-Iran are all time favourites for geo-political pundits). More recently, Climate and the effects of its mismanagement have seen horrific repercussions in many countries-Australia and Brazil are prime examples. But an out-of-China virus did what even both the two World Wars could not do. It has impacted virtually every country in the world, forcing most of the world’s population to spend weeks/months indoors, abandoning commercial, educational and leisure activities.

As the haze of the pandemic lifts and we limp back to normalcy, what kind of earth will we see outside our doors?

The primacy of the human life re-established!

As we all know from historical records, Covid-19 has killed far less people than previous epidemics like the Spanish Flu or the Bubonic Plagues of the Middle Ages. HIV/AIDS has been taking many more lives now for several years. Yet as soon as the potential impact of the coronavirus was understood,  governments across the world moved swiftly, shutting down all kinds of business activity, that is the very source of their own revenues. Post Covid-19, like companies, many countries are also starting at bankruptcy as a definite possibility. And yet these governments have put the lives of their citizens as more important. Would the ancient Egyptians have stopped the construction of their pyramids if an epidemic broke out in their Jewish slave labour camps? Would the European colonial powers have paused the economic activity in their colonies just because a virus infection broke out and could potentially kill their native labour in their cotton fields or sugarcane plantations? Think about it. While times have changed and we are in what is mostly a Free World today, yet  we are living in a truly remarkable era- where almost all countries think it’s okay to put profits on the backburner and are doing everything possible to save every life.

Businesses which touch People, Nature, Climate need to be extra cautious going forward:

Post Covid-19, companies will need to be very cognizant of how their businesses affect humans and their lives.  Society, governments and people will be keeping a close watch on such companies and will have extremely low patience with any transgressions. Anything that they do cannot disturb the fragile harmony that exists between people’s lives and Mother Nature. Clearly natural resources companies in sectors like Oil & Gas, Metals & Mining, Energy will have to far more than what they are doing today to justify their existence. Even Agri-Businesses(and that includes the extended fertilizer, seeds, pesticide industries) cannot afford to be blasé about their obligations, otherwise they will soon face an existential crisis. Other businesses also need to regularly check and re-check if their products, processes or services only contributes to societal and environmental well-being and does not deplete it.

Countries, particularly those like India need to spend billions more on sanitation, public health and universal healthcare:

Healthcare spending by the State is a measly 1.28% of GDP in India(Fiscal year 2018). The comparable figure for the US is 17%! India spends more on defense purchases at 1.5% of GDP. Clearly India’s priorities as still a largely poor and emerging economy are misplaced. In spite of laudable efforts like Ayushman Bharat and similar schemes at state level, the vast majority of the country’s population is uninsured and  still doesn’t have any access to reliable healthcare. Combined with its high level of population density, particularly in urban agglomerates like Mumbai, NCR, Kolkata, the government is sitting on a ticking time bomb. We shouldn’t be cocky or complacent about being relatively better off than the US or European countries with respect to the coronavirus impact. It could be just a coming together of certain factors combined with some pure good luck that has saved us so far. If the spread had been much higher, the proverbial stuff would have hit the ceiling-what with only a few hospitals even earmarked to take in Covid patients in our larger cities and towns. Before we put people on the moon or send missions to Mars, we need to have nice, clean toilets in public places/highways, cleaner government hospitals and health centres -which you do not dread entering.

Employers, particularly SMEs need to facilitate upping insurance cover for its employees and focus on their all-round well-being:

Large companies: In big sized corporates, one set of employees are covered by ESIC, and others through the company’s group insurance cover. I’ve heard many workmen and unions complain about the poor quality of our ESIC hospitals. Because of this, they end up spending on private medical treatments which is completely uninsured and hence ends up being a big cash drain. There is a strong need to up the group cover for existing employees and extend coverage to those covered by ESIC. Depending on the affordability of this exercise for the company, it could be a combination of funding from the company and the employee.  Insurance premia is still very low in India. If insurance companies can provide better coverage(coverage of dental, ophthalmic, OTC medicines etc.), a significant portion of people will be willing to pay a much higher premium. This in turn can help insurance companies subsidize those in the lower income brackets. This will eventually turn the medical insurance businesses of the insurance companies much more profitable( none of them make any noteworthy profits, particularly in the group cover business).The government and IRDA should enable this.

For SMEs- Give choice of ESI Coverage or Medical insurance-not both:  Many small establishments are not exactly known for  great medical benefits for their employees. Their responsibility will have to go beyond paying ESI contributions. Employees should be given the choice of ESI coverage or private insurance cover. With many SMEs tottering back to normalcy after the Covid-19 impact, we cannot expect them to take on additional costs. The company should ensure the group cover is not inferior and is at least slightly  better than benefits under ESIC, before asking workers to migrate to private health cover. They can negotiate premium costs which are not higher than their ESIC contribution costs. Any additional coverage can be done by the employee at his/her cost. To enable all of this, the government will need to tweak provisions in the ESI Act. Insurance companies also should ease up their application process to enable quick and easy coverage for this section of employees. With the additional surge of customers from the SME sector, insurance companies will also benefit.

WFH as the new normal:

Other than IT/ITES, other technology sectors, and some companies who believed in the efficacy of work from home, India has predominantly been a work from office culture. With almost 100% of office staff currently on WFH, post the lockdown,  it should be adopted as the new normal for at least some days in a month. Companies which today don’t have a WFH policy should introduce one. WFH when combined smartly with open office plans and ‘hot desking’ can help free up valuable real estate in offices.

Super acceleration of Digital adoption needed:

Just imagine how we would have found it difficult to WFH if we hadn’t digitized some our basic work processes? In this one month, not once did I miss having access to a physical record. The government still needs to do much more in this area. There is no reason why issuing of passports, visas by consulates, ‘Good character’ certificates from police cannot be digitally accessed. This can be extended to various registrations for which we have to trudge to the local registrar office. As we place more importance on decongesting our sarkari offices( and of course respecting the time of our citizens), almost all of this should not warrant physical attendance. I have always wondered

• why e-commerce companies are not allowed to deliver alcohol? If you plug in adequate age control measures(biometric recognition for instance), this should not be a problem?
• Why can’t we vote in elections digitally using a three-stage verification process
• Why can’t we breeze through airport security starting from the airport gates through facial recognition systems?

The list is endless…. 

Some privacy loss for greater good

A little privacy loss will be needed for deriving greater benefits. Pervasive digitization is simply not possible without us submitting various details of ourselves to the government and private service providers. Only information which is relevant should be collected. Sometime back there was an illogical drive by telecom companies to collect your Aadhaar details. Why was that necessary when all one needed was a reliable payment option-else your number gets disconnected? We will however need to reorient our thinking about what is private and what is not,  and not get excessively touchy about the subject. If you were a Covid patient, shouldn’t the government track data like yours when the next epidemic strikes to see if you are vulnerable again? I would go further and propose, that subject to the patient’s approval, implants can be placed in his/her body, so that their health and vulnerability can be tracked by them, their family members and the government. We live under the delusion of privacy. Already, there’s a host of information about us which is out there with some agency or company. Through PAN, Aadhar, passport, our financial investments etc., huge gigabytes of your data are out there anyway. Insurance companies have your entire medical history, record of your traffic offenses including instances of drunken driving etc.

 Other than some intimate, personal information about ourselves, everything else can be shared. If you put even that out on Facebook or Instagram, you can’t blame anybody else for it!

With adequate controls and severe punishment for those leaking data, we should feel comfortable sharing appropriate data for the benefit of moving to a much more relaxed and easier existence, where you could get apply for everything virtually and get your services and products delivered digitally and seamlessly.

A solution framework for migrant labour:

How can we avoid a repeat of the unfortunate incidents of the last few weeks? It broke our hearts watching entire families with their meagre belongings and small children on their heads and shoulders, attempting to walk hundreds of kilometers to their native villages. The government’s appeal to their employers to feed them and pay them for weeks on end was idealistic and divorced from reality to say the least. Many of these employers are very small contractors, small businessmen and shopkeepers whose own income is down to zero. On top of that many of them would have been facing the daunting prospect of paying off debts to their moneylenders.

In my view, going forward state governments need two capabilities in the event of another pandemic or any other event like a curfew or a natural disaster(earthquake,floods,cyclone etc.):

• Building overnight (or in a few days), makeshift accommodation of good quality with bathrooms, toilets, dining hall and a large kitchen. I am sure reputed Indian construction companies can rise to the occasion and develop this expertise quickly.
• Calling in small caterers in each city to run the kitchens/dining halls.
• Creating a Disaster/Calamity Relief Fund with clear investment principles like the PF Trust,  which can be used to provide food, subsistence wages to migrant labour, and money for train tickets to their native villages once it is safe to travel.

As we crawl out of the Black Swan’s shadow, a different kind of planet awaits us. In many ways it’s an opportunity to create a better world. There are multiple theories explaining away the pandemic- biological warfare, negligence and callousness by China, Wrath of God, Karma etc. What it hopefully does is to  reinforce the importance of family and spending precious time with loved ones. Work isn’t the end all of life. Everybody now realizes how priceless good health and fitness is. When we go back to our normal lives after the lockdown, hopefully these important lessons aren’t forgotten.

 Author: S. Venky Venkatesh

Note: The views expressed in this article by the author are personal and does not reflect the views of his employer.