It seemed so long ago when we were in Feb, where the world was in a different place… As I try to remember what had happened each week on this blog, it feels like no end is in sight and that we are heading towards a deeper hole. Every government is trying to scramble and figure out the best way to fight the invisible enemy on a day to day basis.
For me, this week was the unravelling of the country that I have been working as a consultant for the last 2+ years. Myanmar is a developing country that has a lot of upside potential, having been closed to the world for 50 years and just opened up again less than 7 years ago.
We have been running a very successful microfinance business with the new CEO whom I have known in my previous job. Our loan portfolio had grown by a factor of 7 times over this period of time and its infrastructure strengthened to withstand this growth. Then this Black Swan pandemic event hits the world.
Myanmar has not even experienced the first wave of the coronavirus yet. The lack of medical resources (less than 100 ventilators for a population of 55 million) and slow government response are worrying signs. We could literally see all Asia countries been engulfed in this fight but ASEAN countries like Myanmar and Indonesia did not publish any statistics on cases till very late into the virus onslaught.
It did not help that most of its citizens had over the years moved to neighbouring countries for work and are returning en mass as Thailand and Vietnam started lockdown programs which effectively put them out of work. Given that they generally do low-end work that the citizens of that country do not want to do, most have no choice but to consider returning to Myanmar after losing their jobs. This is a looming problem as they may bring back the virus to their villages in a big way. The last count was that over 30k had returned and more on the way.
The various provinces started to react this week by having lockdowns on its regions for the whole month of Apr. It does not help that there is a long holiday in mid-Apr of 10+ days – ThingYan is like the water festival which most Indochina countries celebrate. It is about the beginning of spring and water represents life as farmers start to prepare for the new planting season. Like in China’s case in Jan, the government had to shut down the Chinese New Year celebrations in order to contain the virus. I hope that Myanmar can do the same too, before its too late.
Meanwhile, our company is urgently reviewing our BCP (Business Continuity Program) to try to forecast the effects of the lockdowns and how it will affect our cash flows. We had numerous conference calls to try to pin down the many unknowns to come up with a coherent action plan in a worst-case scenario. The more we discussed, the more we see newer obstacles we need to resolve. It is a logistical nightmare with so many moving parts. As I write now, we are still trying to work out the non-repayment situation and how they will affect our outstanding loan facilities’ financial covenants.
The news around the world has gone from bad to worse. There is still no end in sight and the numbers are simply worsening every day. While we want to get updated daily, the novelty of it is wearing off as the updates get more depressing. Hearing that New York hospitals may run out of PPE and ventilators as soon as the next few days is really not a joke anymore. If the most developed country in the world is descending to such 3rd world chaos, is there hope for the rest of us?
European countries are no better, although there are signs that the peaks of the curves in some countries do seem to be flattening a bit. Many manufacturing and Fintech companies are trying to band together to come up with innovative solutions. Governments seemed to have run out of ideas other, heading towards a total lockdown as an ultimate solution. In order to starve the virus, we have to stop the global economy first. This will have a dramatic effect on everyone.
US unemployment claims hit over 6 million this week, a new high again. Governors like Cuomo in NY have been told by the inept Trump that they have to take care of themselves and not depend on the White House… Seriously?? Calling yourself a wartime president and doing nothing – that’s weak leadership for all to see.
Thankfully, the best place in the world to be in at the moment is S’pore. On Thursday, the PM LHL decided to step up measures by a notch. That is almost equivalent to a full lockdown which will be for a month starting this Tues. S’pore had weathered the 1st wave successfully but the 2nd wave of returning citizens from the West hit us 2 weeks ago. The new worry now is that the 3rd wave consisting of carriers who are asymptomatic and may be silently spreading it among the community again. Social distancing with a full lockdown is inevitable.
CDC and other researchers are now suggesting that everyone should aim to wear masks while outside, as another measure to lower the spread. Countries like Japan and Taiwan seemed to have better success as most people there wear masks annually during the flu season and even now during the coronavirus pandemic. This social consciousness had helped them to flatten the curve much faster. Maybe the whole world should wear masks if they need to go out. Trump even suggest scarves now. The big ramp-up in mask production should be able to help achieve this goal eventually. We decided to aggressively stock up on masks, just in case. On Fri, I saw a shop which was selling them and bought 24 boxes for my extended family as a result.
We have an interesting week ahead of us. Weekends are filled with dread as to where the next bad news will come from. For us, Tues will signal the beginning of a new full month of lockdown.
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