Knowledge Update

As we all know, the novel coronavirus (Covid-19), has emerged in China as early as 2019. It took a few months for this epidemic to turn into a global pandemic which already infected millions of people. The unprecedented spread of this virus around globe has prompted many governments to take unprecedented actions such as nationwide curfews. Flights are grounded. International travel is almost forbidden. Tourism and restaurant business were down. Large scale events were all postponed and cancelled. We have not yet seen the full impact of the economic shock, but it is expected to be as deep as the one experienced after the sub-prime crises. 

The resulting economic recession due to the virus situation are having devastating effects on many households. The lockdowns have particularly affected the poor and the unhealthy. The question of whether this will be a temporary shock or a long-term trend is still unanswered. In this article I look at the impact on global poverty and hunger outlook from sustainable development perspective. Specifically, I discuss how the current situation is going to affect the UN sustainable development goals: SDG #1 (no poverty) and SDG #2 (zero hunger).

SDG 1: No Poverty

SDG1 aims to eradicate poverty in all forms by 2030. There is a special emphasis on eradicating poverty among vulnerable segments of the society. Unfortunately, the spread of the deadly Coronavirus has only increased the woes and sufferings of the poor and the vulnerable segments of the society. Millions of people lost their jobs. Those who work in daily jobs were affected the worst. The sudden loss of income and poverty was particularly evident in migrant communities such as laborers. Not only their families are at risk of extreme poverty, but also they found themselves in a desperate situation. Adding to this problem, many migrant workers are stuck abroad without any income as many flights are grounded.

However, the world has also realized the importance of social security during crises. The countries that have solid social security systems with unemployment benefits fared way better than those with do not have social protection. Perhaps, their success could set good examples for future labor policies. Also, the fiscal and monetary stimulus packages initiated by leading economies are likely to boost economies back in track. The impact of COVID-19 has brought the issue of poverty in the limelight and many individuals. Similarly, the world has also realized the need for unity in providing access to basic services, such as improved drinking water and sanitation.

SDG2: Zero Hunger

SDG 2 aims to eliminate all forms of hunger and malnutrition by 2030. In order to achieve this goal, the governments need to promote sustainable agricultural practices; offer their citizens healthy and affordable food. The initial social response during the pandemic was to stock as much as possible. However, due to travel restrictions, transportation of agricultural produce was negatively affected. Many farmer markets were closed, forcing the farmers to dump their produce. Equally important, the food-processing factories were shut down due to Covid-19 cases among workers.

The pandemic has also forced people to cook and eat healthy food at home. The boosted demand for healthy food is likely going to have a long-term effect on consumer preferences. Thus, we might observe sustained demand for organic and healthy food. Hopefully, the demand for junk food might be reduced in long term. One thing for sure is that food security will be back in national security agendas and may take some funds from defense into agriculture. The investment in agriculture might also serve to reduce poverty among rural households.

[1] An extended version of this article covering the impact of Covid-19 on UN-SDGs are available as a working article here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3592933

 

 

 

 

In early civilization, the transition took place in Homo Sapiens' lifestyle from Nomadic to Neolithic, which means from ‘hunting and gathering’ to ‘agriculture and settlement’. They started embracing the domestication of plants and animals, which is considered as the first agricultural revolution. This change in lifestyle laid the foundation of religious, social, and political ideologies and structures. Depersonalized systems of knowledge such as writing, sharing, arts and architecture, division of labour, trade, etc. started to get established.

The first industrial revolution witnessed mechanization, which is mainly attributed to the invention of the steam engine, and lead to the shift in the focus from agriculture to manufacturing. It is believed that this phase of the industrial revolution started in the year 1784 when they used water and steam power to develop mechanized factories for production of chemicals, iron, coal, yarn, and clothes.

The second industrial revolution, which is also known as the Technological Revolution, is mainly credited to electrical energy and telephone. This phase started in the year 1870, by rapid industrialization and standardization to develop, railroad and telephone networks, water and gas supply, large-scale production of iron and steel, use of petroleum, internal combustion engines, automobiles, radio, and television. These developments lead to an unprecedented movement of people, ideas, and integration of economies.

The third industrial revolution started from the year 1969 and is associated with the emergence of electronics, automation, computers and information technology. This phase introduced semiconductors, personal and mainframe computers, and the internet as a digital revolution. This pervasive digital technology drastically disrupted industries by automating their production and supply chain globally.

The fourth and current industrial revolution, which started from the year 2010, centered around digitalization, robotics, and machine learning. It is not only transforming industry but also people’s life and work. In this phase, manufacturing technologies and processes are including cyber-physical systems, Internet of Things, Industrial Internet of Things, cloud computing, cognitive computing, artificial intelligence, big data analytics, smart sensors, 3D printing, augmented reality, advanced human-machine interface, etc.

The two interesting facts worth highlighting from these four industrial revolutions are, successive industrial revolutions have taken lesser time to happen, and its crusade is shown below

 

 

These industrial revolutions also brought the concept of industrial capitalism, factory system and more complex division of labour. In the early 19th century, industrialised Britain started relaxing its protectionist approach to capture the global market through free-trade. And then gradually, capitalism was carried across the world in the name of Globalization. Now, what we are experiencing is brazen capitalism at a global level, dominated by industrialized nations. There is no real respect shown by the states and statesmen for human values, peace, health, environment and natural resources over the creation of wealth.

Nature was alarming us in the form of global warming and extreme weather conditions due to environmental degradation, but we kept on ignoring it for quite some time. Now, the COVID-19 pandemic broke the boundaries of states and diminished the differences between the rich and the poor. It reminds the Sapiens that what really matters are 'human values' and 'Co-existence with Nature' over capitalism across the globe. Now after a decade of the fourth industrial revolution, author foresees the advent of fifth, which will start latest by the year 2022, and will certainly force us to take a pause on growing voracity of capitalism and start focusing on 17 Sustainable Development Goals of United Nations, which 195 countries have already agreed to achieve by 2030.   

 

 

 

 

Investment is the key to economic development, which is a continuous process, for it is a respond to the ever-rising human wants. Investment, in the case of underdeveloped countries, of which the United Arab Emirates (UAE) was one just a few years ago, are called upon to break the shackle of the ‘vicious circle of poverty’ (VCP) and put them on the road to economic development and prosperity.

The rise of the economy through investment is, perhaps, better demonstrated in the United Arab Emirates, which has risen from a low level of economic development to a world-class economic development. The UAE is considered to be a high home for national and international investments, and private as well as public investments. For example, the recessionary ecosystem which appears to be ever haunting the business world owes to the depressed demand and investment conditions to stimulate which is an easy money/credit policy that is universally in vogue.

According to the IMF, the year 2019-2020 is likely to end in with 90 percent of the world in declined growth rates. The current great depression which began with Covid-19 in December 2019 hints the need for business firms to think of their investments in terms of social needs and values, without giving up their profit goals or objectives. There is already a thought heading to this direction— the Social Value Investment, a recent book making headlines in this field. The Social Value Investing by Howard W. Buffett, the grandson of Warren Buffett of the renowned Berkshire Hathaway, and William B. Eimicke, from Colombia University -- business icons and pride of the United States of America who continue to hold their heads high despite being buffeted by friends and foes alike. The book is a well-researched one. Utopian Entrepreneurs and business people, so to speak, live and work for profit, and then believe that there is nothing wrong or immoral with profits in business term because without profits, which are rewards or “wages” of entrepreneurship and enterprise, there won’t be any entrepreneurial or business activity and no production and delivery of goods and services.

There won’t be that "making of bread and making of wine" so to speak. These concepts are familiar since Adam Smith expounded the principles of business of prices and profits, moving the economic system in an atmosphere of letting the business alone or laissez-faire, which prioritizes the freedom of enterprise or production for profits rather than for social purposes. Smith was the father of the Industrial Revolution and Trade Revolution in the 18th and 19th centuries when industrialists and traders were the ‘monarchs,’ but which cannot be the case today. So, social value investing cannot be held to be a Utopian concept that cannot take off.

Berkshire Hathaway is considered to be an example of social purpose or value investment, which is not making too much of Berkshire Hathaway. Warren Buffett is known for simple living, high wealth creation, and philanthropy in billions of dollars. In any case, the case for social value or purpose investments is quite strong in itself and seems an investment inevitability in our uncertain and disturbed world. Social Value Investment appears to be the first condition for realizing sustainable development goals (SDGs), after MDGs. Companies consider it their best.

Corporate Social Responsibility is a different game, which many corporations do not take seriously. Hence, the decision of French President Macron to tax non-tax paying stellar MNCs. Governments, too, are not above the blame game. The golden rule of investment is not just to think of the ‘self’', but also of ‘society', to which one owes a debt of Return and not of default or write-off. SDGs would be a distant dream than their fixed time horizon which is 2015-2030.

There are rays of hope spread across the horizon in the form of the millennial start-ups, especially in India where millions of young women and men with education and well-paying jobs at home and abroad are moving into the town and villages with solutions to the problems in their country in every field, especially in its poor-paying agriculture. They worked with a 24/7/365 work schedule of farmers. There are various ventures from organic farming to the production of environment-friendly agricultural goods. In the UAE, the move is towards a Green Economy. In the field of housing, the premier iconic house of Tata’s, has a Nano housing for the poor in India. They were also makers of the common man’s Nano Car. There seems a need for Nano-tractors through Social Value Investment, with which the passage of time is sure to develop momentum.

The last few weeks have proven how mankind is adaptive to difficult and awkward situations. The current crisis of the Coronavirus known as COVID-19 has dictated the behavior of humans and restricted us to stay at home. Now the question is, “will we stay put?” The answer is “of course not,” but how will we be able to do our jobs and complete the tasks assigned to us. For us, particularly the educators, it was not hard to find alternatives, as one of the most obvious and easy substitutes for the conventional classroom is online live teaching. Education, both sides of the coin — whether teaching or learning, has no limits and does not believe in obstacles or boundaries. With the help of information technology and its fast-paced evolution, education can be easily facilitated anywhere across your home town, city, or even globally. The dramatic evolution in telecommunications and connectivity has powered and equipped the teachers and students with information technology skills that help in the process of education. It has made a wider range of courses available online and students can learn wherever they are. Today, for instance, I had a class where some of my students attended from their workplace. Online education is now part of our normal lives as we are surrounded by a wide range of technologies and live video streaming that makes online classes more engaging as the traditional classes, proving that conventional education is changing drastically. Technology goes hand in hand with education nowadays as new techniques and skills can be acquired by both teachers and students, ensuring the quality of education that students get which they can use to attain academic success. Now, teachers can conduct live online classes and also produce digital content of almost the same quality and content created during the conventional classes. With the state-of-the-art technology available today, the classroom has reached the optimum settings equal to or sometimes better than the traditional settings. With the Learning Management Systems, smart contents that include textbooks, figures, audio files, video files, and live video lectures, education has been made easy in both ways. Beyond that, technology made the traditional syllabuses to create customized learning materials for certain subjects as mentioned, and as a result, teaching and learning materials are being digitized with new interfaces that are made easy to help the students of all academic grades and ages. Of course, not to forget shedding light on the valuable role of Artificial Intelligence in the education process. The dynamic nature of Artificial Intelligence makes new opportunities for teachers-students interaction that was not available a few years ago. This is all because of the variety of top-notch technologies and dynamic contents as compared to the outdated materials and documents in fixed static environments of the past. Moreover, we must agree that Artificial Intelligence has a great potential to excel and expedite new synergistic teaching pedagogies that helps in the learning process.