Chaos and Covid-19: Business lessons from a pandemic

It is rare that a mathematical theory makes it into the awareness of the general public. One exception, a number of years ago, was chaos theory. However sceptical some might have been at the idea that a butterfly flapping its wings in China can cause a hurricane in Texas, the current coronavirus outbreak clearly demonstrates the notion that apparently small events in one place can cause much larger ones elsewhere.

Although we don’t know for certain, scientists suspect that Covid-19 may have come from a market in Wuhan when a diseased animal was consumed or butchered, thus allowing a previously animal-borne disease to pass into humans. 

Whether this turns out to be accurate, or whether the outbreak started elsewhere, coronaviruses are zoonotic in nature. Therefore a small act in urban China, where imports of species such as pangolins has skyrocketed in recent years, has led to the shut-down of much of the world.

However, such links are not new. The Ebola outbreak in west Africa in 2014-15 is believed to have originated in bats, and then transferred to human beings, initially in Guinea. Whilst this outbreak has not had the global impact of Covid-19, Ebola’s much higher mortality rate, and the fact that the disease struck in countries with very weak healthcare systems meant that the impact on Liberia, Guinea and Sierra Leone was devastating. 

SARS – which hit Asia in 2003 – is also believed to have originated in bats and spread to humans through civet cats. The Middle East respiratory syndrome – another coronavirus – is believed to have passed to humans via camels.

What all these outbreaks therefore have in common is that they were not random happenstances: they all could have been anticipated if anyone had bothered to look. Chaos theory has demonstrated its power: that apparently small, and localised events can have huge and disruptive effects elsewhere.

And this, perhaps is the most important lesson that the business world needs to learn from the Covid-19 outbreak: that there are issues companies face which are complex and difficult, but which are vital to address if the risk of future pandemics is to be reduced.

The first is illegal deforestation, which plays a significant role, not just in climate change and biodiversity loss, but also in the development of zoonotic diseases like coronavirus and Ebola.

According to the World Health Organisation the origin of the 2014 Ebola outbreak was a small village in the Gueckedou district of Guinea. In the words of the WHO, “much of the surrounding forest area has been destroyed by foreign mining and timber operations. Some evidence suggests that the resulting forest loss, estimated at more than 80%, brought potentially infected wild animals, and the bat species thought to be the virus’s natural reservoir, into closer contact with human settlements.”

The same warning was repeated in a recent article in the New York Times, which argued that “we invade tropical forests …we cut the trees …and we shake viruses loose from their natural hosts. When that happens, they need a new host. Often, we are it.” The need to tackle illegal deforestation is not new for companies, but the Covid-19 outbreak demonstrates all the more clearly the need for urgency on this issue.

This leads to the second issue which companies need urgently to grasp – to support enforcement of laws in countries where they operate. Frequently, on issues such as deforestation, countries have laws in place, but these are only erratically enforced. 

An article in late 2019 in the journal Forest Policy and Economics considered the case of Indonesia, for example. The authors concluded that despite commitments by the government “to reduce emissions from deforestation and forest degradation … the country suffers from one of the most significant illegal logging and illegal land clearing conditions in the world. … Indonesia does not have … a strategic approach to forest law enforcement.”

However, the issue goes further than tackling illegal deforestation: the Covid-19 pandemic illustrates the need also to ensure enforcement of laws relating to the trade in live animals and endangered species. Probably the best-known regulation internationally is CITES – the Convention on the International Trade in Endangered Species.

However, though backed by the UN this convention is only as good as the willingness of individual states to enforce it. As National Geographic put it in an article last summer, “actual enforcement of the CITES regulations is left to the countries themselves – some of which don’t have the resources or political will to enforce regulation.”

Significantly more effort is needed to enforce country-specific regulations as well: with China being a clear case in point. On 24th February, the 13th National People’s Congress issued a decision “comprehensively prohibiting the illegal trade of wild animals, eliminating the bad habits of wild animal consumption and protecting the health and safety of the people”.

Yet, as with CITES, this new regulation will only be as effective as the enforcement measures used. A letter in Nature magazine, following China’s announcement, appeared to express scepticism in this regard since “much of this trade is already illegal, stricter enforcement and prosecution measures are needed if the consumption of wild animals is to be brought under control”. 

This will take time, and encouragement. Business, uncomfortable though firms are at this idea, will need to establish how best they can support governments in all countries where they operate in enforcing key laws and regulations like these.

Demand is one driver of the wildlife trade, the other of which is the supply. This brings us to our third issue: rural poverty, which is a driver both of the wildlife trade and of deforestation. 

To look first at the former, it is clear that low incomes in rural areas of many countries is a driver for the hunting of so-called bushmeat – wild animals hunted in many developing countries by local people both for their own consumption, and for sale. As The Zoological Society of London observes in relation to the practice in west Africa, bushmeat is crucial for “the food security and livelihoods of those people who use this resource”.

However, the consumption of bushmeat, and the sale of wild animals into markets like the wet markets of China both carry significant risks of the transfer of zoonotic diseases from animals to people. Improving incomes in rural communities is therefore a vital tool in addressing the practices of deforestation and bushmeat hunting, which are driven to a significant degree by poverty.

In relation to deforestation, we know that in the case of both the cocoa and palm oil supply chains, the behaviour of small-scale farmers is a key issue. According to the World Bank, in Ghana “forest degradation and deforestation are driven primarily by cocoa farm expansion”. A 2019 report by research NGO CIFOR found that an increase in the conversion of peat soils in Borneo was caused mainly by smallholder oil palm expansion. Properly addressing rural poverty in emerging economies is therefore vital as part of a strategy to limit the potential for future pandemics.

The fourth and final issue is that of food security. As the reality of Covid-19 took hold, supermarkets in many countries were stripped bare by waves of panic-buying. For example, London’s Evening Standard reported that in just four days in March, Britons made 42 million extra shopping trips than normal, as people feared shortages of that essential food and other supplies. How much greater would the panic have been if these fears had been real, and key goods really were about to run out? 

Yet the reality is that supplies of many foodstuffs genuinely are facing an existential risk. Whilst Covid-19 has captured the headlines, it is by no means the only pandemic the world currently faces. The very existence of several key commodities is threatened by diseases which are able to spread with alarming rapidity. 

A fungus called Fusarium Tropical Race 4 (TR4), long present in banana plantations in Asia has now spread to Latin America, the world’s largest exporter of bananas. As one observer commented in mid 2019, this “deadly fungus is on the verge of wiping out the banana forever.” Whilst some (less attractive to consumers) banana species are resistant, the Cavendish, which is the banana you see in shops, is not. And there is no treatment or cure. Land must be simply quarantined and abandoned for decades, perhaps longer.

Citrus crops – including oranges, lemons, grapefruit and limes – also face an existential threat in the form of Citrus Greening (also known as Huanglongbing [HLB] or yellow dragon disease). According to the US Department of Agriculture, “once a tree is infected, there is no cure…It has devastated millions of acres of citrus crops.” According to the UN’s Food and Agriculture Organisation, the disease is already present in seven of the world’s top citrus-producing countries of the world.

Alarmingly, farmers in Florida are now turning in desperation, to spraying trees with antibiotics. This is of deep concern to public health officials, given the huge risks the world faces from anti-microbial resistance. The United Nations says resistant infections could claim ten million lives globally by 2050, exceeding deaths from cancer.

Coffee too is under threat. Writing about that industry in Colombia, a BBC analysis concluded that, “coffee rust is a disease with the power to cripple, or even wipe out, the country’s national product”. These contagions are being addressed from the crop science perspective, but given the potential for a perfect storm of another human pandemic, and REAL shortages of foodstuffs, still greater action is needed.

As Covid-19 has amply demonstrated, you can only solve a problem if you properly understand it in the first place. Yet, even despite many years of engagement with rural communities in developing countries, the level of understanding that business and others have of them remains shallow. Moreover, government entities are not routinely engaged in what companies and their partners are up to. 

Political economic analysis (PEA) is an essential tool to understand the dynamics on the ground, and in creating solutions that take account of indigenous power structures and social practices. There’s no excuse now not to delve more deeply into understanding what the problem actually is in each location; and dealing with the fact that quick-fix, or broad-brushstroke approaches are flawed.

Once again, Covid-19 vividly illustrates that complex problems require a joined-up approach to addressing them. Tackling the pandemic has seen unprecedented collaboration between the public and private sectors: collaborative development governance seeks to apply that same approach to addressing development challenges in emerging economies.

Governments, private companies, civil society groups and others all have different roles to play, but by collaborating, their initiatives and capabilities can be mutually-reinforcing. In 2014-15, a project led by IFC, but including representatives from the private sector and civil society applied a collaborative approach to the challenge of how large-scale investments by multinationals could create jobs for local people, and contracts for local companies.

A key element of this project was a mapping exercise to identify who was best placed to do what; and how existing efforts could be linked up. Companies need to be proactive in instituting these types of collaborative approaches wherever they operate.

In the case of coronavirus, the tools have been more or less the same all over the world – lockdowns, wide-scale testing, and travel bans. However taking a political economic analysis and collaborative development governance approach, the opposite is true: that the plans and tools used will necessarily need to be different in each case, and carefully tailored to specific local needs.

A political economy analysis will identify, for example, that the causes of rural poverty are different in different places. Collaboration with other partners will identify a different set of activities already in place. Therefore, each local plan, and the tools it uses, will need to respond to these local differences.

The impact of Covid-19 – the full extent of which as-yet unknown – is huge, and the need is therefore urgent to take steps to limit the potential for a similar pandemic in future years. 

A sensible approach would be a working group set up specifically to address the following questions:

 

Dr Peter Stanbury is principal of the Frontier Practice. Toby Webb is founder of Innovation Forum.

At Innovation Forum we are committed to exploring further the wider societal and political issues relevant to supply chains, food security and apparel manufacture. We are developing additional resources, formats and ways to support partner organisations in making real change happen on these issues. See here for more details, or contact Toby Webb by clicking here.