~ Archive for Southeast Asia ~

Echo chamber risk and the role of middle management in information flow

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I kept encountering the phrase “Echo Chamber” this week and even though I know what it stands for, I can’t help but to look up its meaning on Wikipedia. On Wiki, it defined Echo Chamber as,

Echo chamber (media) An echo chamber is “an environment where a person only encounters information or opinions that reflect and reinforce their own.” In discussions of news media, an echo chamber refers to situations in which beliefs are amplified or reinforced by communication and repetition inside a closed system and insulated from rebuttal …

 

Just think about it, recent history is replete with examples of leaders being entrenched in their own interpretations of truth, particularly when circumstances turn against the company. Instead of responding logically to the cautionary signals all around them, they dig further into their echo chamber, listening to the deputies that they’ve surrounded themselves with.

One of the most dangerous aspects of echo chambers is that they lead to a lack of creative ideas, similar viewpoints, and identical concepts. On an organisational level, I seriously think that this can limit our chances for progress and stifle constructive discussion.

Now, with the vast quantity of information available on the internet, I don’t really think that it is difficult to obtain “evidences” that support a committee’s viewpoint. The challenge, and very useful one indeed, is to discover dissident ideas and views that do not correspond to your own point of view and build these insights into our strategy, and this can only be achieved by deliberately seeking out people and groups that are not so similar and also maybe from other industries.

The risk is, deputies or middle management might tend to form committees that comprise people who more or less mirror the views of the head honcho. Importantly, these middle managers represent the company’s culture by encouraging and implementing appropriate beliefs and behavioral patterns throughout the organisation.

Fundamentally, the flow of information in an organisation is also controlled by middle management. They are privy to crucial information and gossips (important too!) and it is up to them to communicate (or not) the critical information to the appropriate supervisors or departments. Failure to surface critical information can sometimes lead to the fall of the leader or worse, the organisation.

Perhaps leaders could also consider to be more purposeful in surrounding themselves with advisers who are competent, logical, confident, and genuine in order to counteract this Echo Chamber risk, otherwise they risk slipping into this fatal communication gap.

One good example would be Nokia; its fall from being the world’s finest mobile phone firm to losing everything by 2013 has become a case study that professors and students in business management classes have examined. Not only did they formed an echo chamber, they also fostered a very toxic work environment. According to a study (Vuori & Huy 2016) with 76 Nokia top and middle managers, engineers and external experts, they discovered the following about Nokia:

  • Nokia was plagued by organisational anxiety at the time;
  • The anxiety in the organisation was rooted in a culture of toxic working environment filled with terrified middle managers;
  • Top executives frequently intimidated middle managers by accusing them of not being ambitious enough to achieve their objectives;
  • Middle management was afraid to reveal the truth for fear of getting sacked;
  • Middle management lied to top management because they believed stating the truth was pointless; top management lacked technical knowledge, which affected how they could judge technology limits during KPI formulation; in comparison, Apple’s top management were all engineers;
  • Middle management were hesitant to openly admit that Symbian, Nokia’s operating system, was inferior;
  • Top executives were terrified of losing investors, suppliers, and consumers if they admitted to Apple’s technological superiority;
  • They were aware that developing a superior operating system capable of competing with Apple’s iOS would take several years; and
  • Rather than committing resources to long-term aims such as building a new operating system, Nokia management chose to create new phone handsets to meet short-term market demands.

Nokia’s demise was precipitated by a series of poor decisions, yet none of the company’s errors were unavoidable. I think that there are several lessons to be drawn from the demise of this technological behemoth.

Reference(s):

Vuori, T. O., & Huy, Q. N. (2016). Distributed Attention and Shared Emotions in the Innovation Process: How Nokia Lost the Smartphone Battle. Administrative Science Quarterly61(1), 9–51.

 

Turning a crisis into an opportunity: Crippling effects of increased level of carbon dioxide and global temperature on hydroelectric power plants in tropics and subtropics regions

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Photo by Quang Nguyen Vinh

 

Written by Zeng Han Jun

A recent survey showed that there is a slight shift in people’s interest in favor of renewable energy. According to this survey, governments should consider exerting more influence in raising environmental consciousness and bridging the gap between people’s desires and realistic energy alternatives (Zhang, Abbas,Iqbal, 2021). Popular renewable and clean energy options include hydroelectric, geothermal energy, wind energy, solar energy, etc.

 

By bridging the gap between people’s desires and realistic energy alternatives, the government could realise people’s expectation and also reduce the burden on our environmental ecosystem, but it is also important to note that operationalising, has its fair share of challenges. For example, in the United States, there is general consensus among some people that harnessing wind energy could be one of the solutions to alleviating the energy challenge. Among those who agreed, some have the Not-In-My-Backyard (NIMBY) mindset and do not want any of those power plants near their homes. 

 

Some cited personal health issues and environmental degradation, while others say that the construction will destroy the view from their houses and devalue the properties in the vicinity. All these concerns stand in the way of implementation and of course, I have to agree that these are indeed issues that should be addressed accordingly and dealt with properly. 

 

In the tropics and subtropics regions, we could be witnessing other increasingly challenging issues stemming from global temperature and carbon dioxide increase, its effect on the natural ecosystem and this might possibly disrupt the operations of hydroelectric power plants.  

 

Let me explain why.

 

As the global temperature and carbon dioxide increase, we might discover that it becomes more difficult to maintain biological control on the proliferation of aquatic weeds in many parts of the world (Baso, Coetzee, Ripley, Hill, 2021), more so in the tropics and subtropics. The tropics and subtropics region are located in parts of the world in which the sun is directly overhead at least one day of the year and is found within a band on either side of the equator from 23.5°N, and 23.5°S. These aquatic weeds can grow rapidly to cover the entire surface of lakes and rivers, some even setting deep roots and form strong lateral connections to each other as well. 

 

As mentioned earlier, these growing aquatic weeds might cause operational difficulties for hydroelectric power plants. It could lead to reduced throughput and eventually cause severe blockages. Hydroelectric power plants that are situated in Southeast Asia, would be at the greatest risk. Southeast Asian governments must anticipate these types of obvious problems and develop an integrated and multi-phased roadmap to tackle the upcoming challenges.  

 

So, do not naively assume all types of green are good. Some types of green when left unchecked, can contribute to severe environmental and commercial consequences. 

 

One of the problematic aquatic weeds is the water hyacinth species. This species grows very fast and some even flower under the right conditions. Many in fact think that it is very beautiful.  It  has a rapid growth rate in warm temperatures (Mitan, 2019) and can potentially cover the entire lake if left unchecked. This prevents sunlight from reaching the bottom of the lake and disrupts the lake ecosystem. In other parts of the world, local communities have tried to use pesticides to control aquatic weeds. Some tried to introduce insects such as weevils to feed on the water hyacinth to slow its growth but such methods also have its consequences.

 

Apart from meeting the issue head on, central and local governments could also try to mitigate the risk by transforming/ retrofitting the affected hydroelectric power plants to harness other forms of renewable and clean energy. It is more cost-effective to install alternative renewable energy devices on infrastructures that can already receive, store, transform and transmit electricity. 

 

Also, it is worthwhile to explore tapping on the creativity of the private sector to transform the issue into revenue-generating ideas such as collecting aquatic weeds, processing it and mixing the by-products with polymers to create fabrics that can be used for weaving garments thereby paving way for sustainable fashion. Or, the aquatic weeds could be harvested, processed and strengthened with chemicals to produce furniture thereby giving birth to sustainable furniture. Additionally, the private sector could also explore processing the aquatic weeds into edible food for humans, animal feeds and fertilisers, and export the final products to other countries (Oa, & Cf, 2015).

 

By including additional later stages such as breaking down these final products with pyro technology then harvesting the by-product as fertilisers (Ramirez, Pérez, Flórez, Acelas, 2021), the government, with the help of the private sector would be able to close the loop and further develop the entire idea into a circular economy. This can help to create new jobs, improve the economy and certainly goes well with the media.  

 

There are many ways to tackle the issue. The main enabler is to have a properly designed, integrated and multi-phased roadmap to guide the entire transition. 

 

References

Baso, N. C., Coetzee, J. A., Ripley, B. S., & Hill, M. P. (2021). The effects of elevated atmospheric CO2 concentration on the biological control of invasive aquatic weeds. Aquatic Botany, 170, 103348. doi:10.1016/j.aquabot.2020.103348

Oa, S., & Cf, O. (2015). Utilization of Treated Duckweed Meal (Lemna pausicostata) as Plant Protein Supplement in African Mud Catfish (Clarias gariepinus) Juvenile Diets. Fisheries and Aquaculture Journal, 06(04). doi:10.4172/2150-3508.1000141

Ramirez, A., Pérez, S., Flórez, E., & Acelas, N. (2021). Utilization of water hyacinth (Eichhornia crassipes) rejects as phosphate-rich fertilizer. Journal of Environmental Chemical Engineering, 9(1), 104776. doi:10.1016/j.jece.2020.104776

Zhang, Y., Abbas, M., & Iqbal, W. (2021). Perceptions of GHG emissions and renewable energy sources in Europe, Australia and the USA. Environmental Science and Pollution Research. doi:10.1007/s11356-021-15935-7

Rethinking our electrical grid system and explore alternative sustainable energy sources to complement photovoltaic energy

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Photo by Maegan White

 

Written by Zeng Han Jun

There was a recent debate in South Korea about how solar panels are responsible for deforestation and possibly even linked to forest fires. It is not new. This argument has been going on for more than a decade but the stakes are much higher now. Investments in solar panels have been increasing steadily as energy providers try to diversify their business. Some of the oil companies are throwing significant investments into the solar business. That South Korea government unit acknowledged the report but neither agreed nor disagreed with the findings. However, the unit did share some best practices in solar panel installation, which is mainly about how the solar panels should be sloped during installation. 

 

To be honest, solar energy production in cities is clearly one of the many ways to reduce our reliance on fossil fuels and could be a good way to mitigate global warming by lowering Greenhouse Gas (GHG) emissions. Although photovoltaic (PV) renewable energy production has increased, questions remain about whether PV panels and PV power plants cause a “photovoltaic heat island” (PVHI) effect, similar to how an increase in ambient temperatures relative to wildlands causes an Urban Heat Island (UHI) effect in cities (Barron-Gafford, Minor, Allen, Cronin, Brooks, Pavao-Zuckerman, 2016). 

 

Cities are fundamentally concretised urban landscapes and the most significant impact of cities on local weather is the UHI effect. Heat islands are urbanised areas with higher temperatures than surrounding areas. Buildings, roads, and other infrastructure absorb and re-emit more heat from the sun than natural landscapes such as forests and bodies of water. Urban areas, where these structures are densely packed and greenery is scarce, become hotspots for outlying areas.

 

Some studies have pointed out that PV panels and PV plants change the structure of the landscape, in how incoming energy is reflected back to the atmosphere or absorbed, stored, and reradiated. Energy absorbed by vegetation and surface soils can be released as latent heat in the transition of liquid water to water vapour to the atmosphere through a process known as evapotranspiration (Masson, Bonhomme, Salagnac, Briottet, Lemonsu, 2001). PV kind of disturbs that process. So, a PVHI effect might be caused by a measurable increase in atmospheric warming as a result of a change in the balance of incoming and outgoing energy fluxes caused by the transformation of the landscape.

 

Research on PVHI is still ongoing while more investments are pouring into this domain. On the other spectrum, there are people who are very optimistic about this technology and even suggested using PV panels to pave roads and open space car parks. Their research has shown that PV pavement decreases surface temperature by 3 to 5 °C in summer and generates 11 to 12% less heat output at various climate conditions, all while generating electricity at the same time (Xie, Wang, 2021). 

 

PV technology is very important because we have an abundance of sunlight in most places but still we should not rely too much on a single energy source. It never makes sense to put all eggs into the same basket. Very cliché but I think that there is a lot of sense in that sentence. 

 

Given the current climate change condition, the scientific community still cannot collectively conclude how our environment will turn out in the future. Nobody dares to put a finger to it, especially when it has been discovered that climate models deviates a fair bit from real world conditions. To be fair, it is not easy to build a climate model because the climatic conditions are so complex, our mathematical models are good but there is the possibility that the math might not perform as expected when more factors come into play.  

 

Apart from using mathematics to forecast possible scenarios, people have also turned to observation of weather conditions on nearby planets as an indication of how Earth might turn out to be in the future. A lot of studies were performed on planet Venus in the 70s and 80s? Now, the people’s attention has shifted somewhat to the planet Mars but the scientific community are still onto the planet Venus though. Many within the scientific community agree that the study of the planet Venus could be one of the keys to understanding planet Earth’s possible future. 

 

First thing first, planet Venus looks beautiful from a distance but it is hellish within the planet’s  atmosphere, with surface temperatures in excess of 400 °C. Space probes sent to scout the planet, melted in an hour or two upon entering into its atmosphere. All the water had disappeared. An explanation stated that the water has broken down and the hydrogen escaped into space. Carbon dioxide and sulphuric acid are in excess throughout the planet. Quite literally a burning hell in our part of the universe. 

 

Some postulated that Venus used to be like Earth but later experienced a greenhouse effect. It then escalated into a runaway greenhouse effect. A runaway greenhouse effect, simply explained, is when there are too much greenhouse gases (usually water vapour) in the atmosphere which results in an increasing amount of heat trapped within the planet. The runaway greenhouse effect is most often associated with water vapour as the condensable GHG. In our case, the water vapour could reach the upper space limit of our planet Earth and escapes into space, resulting in a dried-up planet. This may have happened in the early history of Venus.

 

In the meantime, sea level will still continue to rise, for centuries to come. Many studies have shown that even if human-caused carbon dioxide emissions were to completely stop, the associated atmospheric warming and sea-level rise would continue for more than 1,000 years. These effects are caused in part by the residence time of carbon dioxide. The greenhouse gas can continue to stay in the atmosphere for a long time after it is emitted by industrial processes (NASA, 2017).

 

Flooding will continue to plague low-lying or coastal cities therefore there is a strong need to rethink urban planning and the grid system. Places with underground utility cables must reimagine how they deliver energy to houses and workplaces. Rising temperature might affect the insulation covers of the utility cables, exposing electrical wires to potential flood situations thereby causing danger to nearby humans/ animals and also pose obstacles to delivering energy to places beyond the power plant. 

 

We could explore siting power plants on top of individual buildings with cables delivering energy from the rooftop to respective units below. PV panels can continue to work at lower efficiency when clouds become denser and when the humidity increases. Still, we must be prepared to obtain energy from alternative sustainable energy sources, to augment the reduced output of PV power plants. 

 

Cities without alternative energy options will be at the greatest risk. Some of these cities are unable to harness renewable energy options like wind and hydro energy. As such, these cities must quickly pay more attention to less popular but emerging energy possibilities like hygroelectricity (converting humidity to electricity), piezoelectricity (obtaining electricity from crystals, dry bones or similar materials), etc. 

 

Last month, a Japanese team managed to successfully carry out an hygroelectricity experiment to power a very small motor (Komazaki, Kanazawa, Nobeshima, Hirama, Watanabe, Suemori, Uemura, 2021). I feel very encouraged by the results of their experiment. Even though the electricity output is very small compared to what PV panels can achieve, I feel that there is a lot of potential in scaling up this technology. The hygroelectricity generator could be constructed into a panel but mounted on external walls of buildings. Of course, there are still a lot of challenges ahead for this technology but I see some potential too. 

 

In fact, we must actively think out of the box (Very cliché, I know. We should really just do away with the box) and explore different alternative energy sources. There are significant advances in harnessing energy from sound (vibrations), heat (not geothermal), radioactivity, etc and we should reimagine how different energy sources could be wired up to a single battery station that delivers electricity to a localised building so that services could sustain even in the event of an intense and persistent flood. Of course, this is just a suggestion and there are many other ways to go about it too but first, we need to spark more conversations on this issue. 

 

References

(n.d.). Retrieved from https://www.epa.gov/heatislands

 

6 Causes of Urban Heat Islands and 4 Ways to Offset Them. (n.d.). Retrieved from https://www.buildings.com/articles/27532…

 

Aggarwal, V. (2021, May 28). How Much Energy Does A Solar Panel Produce?: EnergySage. Retrieved from https://news.energysage.com/what-is-the-…

 

Average monthly humidity in Singapore, Singapore. (1970, July 30). Retrieved from https://weather-and-climate.com/average-…

 

Barron-Gafford, G. A., Minor, R. L., Allen, N. A., Cronin, A. D., Brooks, A. E., & Pavao-Zuckerman, M. A. (2016, October 13). The Photovoltaic Heat Island Effect: Larger solar power plants increase local temperatures. Retrieved from https://www.nature.com/articles/srep3507…

 

Evaluation of Electric Energy Generation from Sound Energy Using Piezoelectric Actuator. (2016). International Journal of Science and Research (IJSR), 5(1), 218-225. doi:10.21275/v5i1.nov152677

 

First Real Images Of Venus – What Have We Discovered? (2020, December 12). Retrieved from https://www.youtube.com/watch?v=Fbdojp9L…

 

Hygroelectricity. (2020, June 03). Retrieved from https://en.wikipedia.org/wiki/Hygroelect…

 

Komazaki, Y., Kanazawa, K., Nobeshima, T., Hirama, H., Watanabe, Y., Suemori, K., & Uemura, S. (2021). Energy harvesting by ambient humidity variation with continuous milliampere current output and energy storage. Sustainable Energy & Fuels, 5(14), 3570-3577. doi:10.1039/d1se00562f

 

Masson, V., Bonhomme, M., Salagnac, J., Briottet, X., & Lemonsu, A. (0001, January 01). Solar panels reduce both global warming and urban heat island. Retrieved from https://www.frontiersin.org/articles/10….

 

Runaway greenhouse effect. (2021, July 31). Retrieved from https://en.wikipedia.org/wiki/Runaway_gr…

 

Short-lived greenhouse gases cause centuries of sea-level rise – Climate Change: Vital Signs of the Planet. (2017, January 13). Retrieved from https://climate.nasa.gov/news/2533/short…

 

Xie, P., & Wang, H. (2021). Potential benefit of photovoltaic pavement for mitigation of urban heat island effect. Applied Thermal Engineering, 191, 116883. doi:10.1016/j.applthermaleng.2021.116883

Social issues caused by loan sharks and how it could be combated by cooperatives supported by technology, in addition to an Environmental, Social and Governance (ESG)-focused supplier management programme

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Photo by Tima Miroshnichenko

 

Written by Zeng Han Jun

The pandemic has left many people without proper means of survival in many countries. Several countries have turned to borrowings so that they could extend handouts to businesses and people. Some countries have begun to study the possibility of tendering out large construction projects to create new infrastructures and jobs. Massive reorganisations are taking place at the international and domestic levels. 

 

A few cities are focussing their efforts on international trade through online platforms and repositioning with a blue and green economy because their traditional means of livelihoods might be disrupted in the near future. A small number are readying some of their industries as if preparing to pounce on new opportunities. In short, it is dizzying to see so much action within such a short period, more so when the pandemic has exposed weaknesses of many personal decisions, sectors and governance systems. 

 

One particular issue stood out glaringly for me during the pandemic, i.e. Loan Sharks.  Loan sharks usually provide financing services to those from the lower-income group. These people usually do not have stable income and also do not have proper documentation to obtain loan from a traditional bank. This is where loan sharks will step in to value-add. 

 

Just to share a little about my undergrad experience; I worked as a part-time credit officer at Standard Chartered Bank throughout my university days and my work involved performing credit analysis for the consumer branch and later I helped out with the administrative work for the credit risk covering the industries. At the end of that stint, I found out that money lending is not really that easy because it is a challenge for the money lender to ensure that the borrower is able to pay up. 

 

To this, the credit officers might have to ensure that they have liens over some form of assets that are held by the business or individual. In case the business or individual is unable to cover the loan payments over a certain period (usually three months – we used to refer to it as three buckets), the bank will be able to exercise their rights to claim these assets and recover at least a part of the debt. Additionally, we were also instructed to pore over the cash flow records of the businesses or individuals and ensure that only borrowers with healthy cash flows are eligible for loans. Naturally, loan applicants who are working in certain stable professions, were the safe ones to endorse for lending. 

 

I used to think that credit officers are at the short end of the stick. Later I found out that somehow or rather everyone is at the short end of the stick because ultimately, private enterprises are not charities and every department has bottom lines to meet and positions to secure. Even charities have KPIs, returns and positions to secure! Some loan applications seem like “there’s more than meets the eyes” so we need to call up the frontline sales officer to explain about the situation and maybe get them to obtain more documents from the customers. 

 

We often get back an earful from those front-office lots, about how they are bringing in the business to the bank and sustaining the salaries of those like us.  And that we are just sitting by the phone, mouthing no to everything without a single idea of how the real world works. At the other end of the table, my supervisor will warn that if we let a bad apple in, our head will be on the chopping boards, not her fault and also not the front-line sales officer’s fault. I was just an undergrad part-timer! Luckily back in those days, we had vending machines that provided free drinks to cool us off from these ordeals. 

 

So the lesson from this experience (for myself) is that; getting a loan from a bank is not as easy as one might have expected, and this is even when the loan applicant already has the full set of proper records. A lot of effort is spent on verifying the sources of income, assets and existing debts, all of which depends first on having proper documents. 

 

So what about those without proper records or from lower-income groups?

 

Well, they mostly turn to loan sharks. 

 

When I was serving my national conscription as a law enforcement officer, I spent about one year as a uniformed patrol officer and later had to be transferred away to assist with the plainclothes operations for another year. We supported very deep operations against anti-vice activities, illegal immigrants, gambling activities and also, loan sharks activities. At that time, I already thought that loan sharks are a very troublesome group of people. 

 

Loan sharks.  

 

The fact is; these loan sharks provide financing service to those without proper cash flow records and usually to those who belong to the lower income group or maybe even illegal immigrants. They charge interest rates beyond what the banks offer because the risk that they undertake is very high. In some instances, borrowers often have nothing else to their names except their lives. Sometimes, the borrowers have to borrow even more money to pay off the interest incurred from the earlier debts and this might trap the borrower in the debt cycle forever. 

 

Depending on the situation, some borrowers might end up becoming labour for the loan sharks, as a means to pay off the debt. In others, a few borrowers end up committing suicide. For example, in some societies, farmers borrow money to buy seeds in hope that they can sell the produce for a profit later. However, the resulting crops might be paltry because of poor weather conditions, poor farming techniques, poor soil condition or maybe a mixture of these conditions. Unable to pay their debts and stuck in an infinite debt cycle, some hang themselves and sadly, a few turn to selling their children to finance a little of their debts in order to survive. 

 

It’s heart-breaking. 

 

Companies could unknowingly tap onto this pool of workforce or exacerbate this problem in some ways when they procure products and services, which is why it is very important to include responsible sourcing as part of a Environmental, Social and Governance (ESG) – focused supplier management programme. Responsible sourcing is a method of approaching sourcing and supply chains. It occurs when a company actively and consciously sources and procures products and services for its operations in an ethical, sustainable, and socially-conscious manner. This means that an organisation must ensure that its business practices – both within its own corporate walls and throughout its supply chain – have no negative impact on the environment AND the people. 

 

Working through the supplier management programme is one way to lessen the social effects from loan shark lending. 

 

Other than that, I am suggesting another approach, a more hands-on and albeit more difficult one. It’s more like a long-term Corporate Social Responsibility (CSR) project that underpins its approach with support from right-sized technology and the idea of setting up a cooperative ecosystem. 

 

As written on Wikipedia, it stated that cooperatives are:

A cooperative (also known as co-operative, co-op, or coop) is “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise”. Cooperatives are democratically owned by their members, with each member having one vote in electing the board of directors. Cooperatives may include:

1. businesses owned and managed by the people who use their services (a consumer cooperative)

2. organizations managed by the people who work there (worker cooperatives)

3. multi-stakeholder or hybrid cooperatives that share ownership between different stakeholder groups. For example, care cooperatives where ownership is shared between both care-givers and receivers. Stakeholders might also include non-profits or investors.

4. second- and third-tier cooperatives whose members are other cooperatives

5. platform cooperatives that use a cooperatively owned and governed website, mobile app or a protocol to facilitate the sale of goods and services.

 

In the case of farming, a farming cooperative manages a number of interconnected activities such as production planning, growing and harvesting, grading, packing, transport, storage, food processing, distribution, and sale. This type of cooperative can also be formed to promote specific commodities such as various types of spices, vegetables or shrimps, etc. It is better to structure cooperatives according to the range of commodities that are being farmed within a region. This so that the farmers who are better at producing certain products, could share their best practices with the rest who may not be performing as well. 

 

When farmers band together like this, they also enjoy synergies such as having the ability to promote their product together which in turn improves their bargaining power and hopefully leads to better profits. Farming cooperatives can also be formed by small businesses to pool their savings and gain access to capital, acquire supplies and services, or market their products and services.

 

Members could contribute to the cooperative’s operations and growth by:

  1. Membership fees that are paid once or on an annual basis; 
  2. Service fees, for example, are member contributions with no individual ownership attached; 
  3. Capital contributed by members; 
  4. Individual members make deposits with the cooperative that can be used for business purposes; and
  5. Members can receive deferred payment for a portion or all of their produce delivered to the cooperative.

 

Cooperatives also frequently use external sources of funds to run their operations or finance investments, in addition to institutional and member capital. Non-member sources of funds could include other cooperatives or commercial banks, suppliers, government or donor agencies, and so on. External funding can be provided in a variety of ways, including grants, short-term loans, long-term loans or trade credit provided by a supplier. In fact, forming a cooperative and then using the pooled money to buy some assets, can improve its gearing ratio. This means that the cooperative might be able to borrow money at a lower interest than if one were to borrow directly from a bank.  

 

Once the cooperative is set up, they are in the best position to lend money because they understand the issues within the farming community. The members who are better at farming, could help to share best practices and also determine if a farming idea is viable for financing. Surely one would listen to those who have had more experience or performed better than oneself right?

 

Right?

 

On the technology front, I am not suggesting for even more advanced technology. On the contrary, I wished that technology companies could take a step back and cater to the rest who may not be able to catch up. I had the good fortune to visit a rural farming community in India before the pandemic started. From this experience, I learnt that the people who are living in the rural areas need simple 3G enabled phones, 3G internet network, software or online marketplaces that can be supported by 3G internet and a logistic ecosystem that would work with all these components. They need these systems in place so that they could communicate with the potential buyers who may be located out of town and receive payments for the service rendered. The technologies could be introduced through the cooperatives. 

 

Once they are able to receive money from new sources of buyers, they could again pool the money into the cooperatives. Cooperatives are also good training places to nurture the local people into administrative positions such as investment, finance, corporate development, marketing, and encourage the community to work together. All these work together to make the community a better supplier for most buyers. Also, buyers can also nurture new sources of supply through cooperative arrangements and mitigate any supply-side risks. 

 

With these options in place, people from the lower-income groups will have financing alternatives other than turning to loan sharks. To be honest, cooperatives are not new and have been used to extract lower-income communities and even public officials from the grasp of loan sharks in some societies. Together with technology, it could even uplift the lives of the vulnerable and help them to secure better livelihoods.   

 

References

Malay Mail. (2020, November 15). ‘Strangled by debt’: Coronavirus deepens Cambodia’s loan crisis: Malay Mail. Retrieved from Naheed Ataulla & Anand J / TNN / Updated: Jul 27, 2. (n.d.). How loan sharks pull poor farmers into a debt trap: India News – Times of India. Retrieved from Yasmina Hatem, L. D. (2021, January 07). India has a farmer suicide epidemic – and farmers are protesting new laws they fear will make things worse. Retrieved from  -->

Sustainable Urban Development is the Key to the Continual Success of Southeast Asia Region

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By Zeng Han Jun (hjzeng@alumni.harvard.edu)

The sudden emergence of the Covid-19 pandemic has transformed the way that many of us perceived issues like working arrangements, commute options, housing needs amongst others. Still, the fundamental needs for affordable housing, environmental, social and governance (ESG) awareness and actions remain part and parcel of modern life in and beyond the cities. Governments, together with the Non-Government Organisations (NGOs) and private sector must embrace an open and collaborative approach to tackle some of the most challenging issues of our times, for example, the provision of a sustainable urban environment that allows for healthy socio-economics dynamics. 

From what I have seen, learnt and discussed with various organisations, I firmly believe that two important foundations were put into action during the Covid-19 period that could empower collaborative actions towards sustainable urban development and growth in the Southeast Asia region.  

First, the Southeast Asian countries came together and signed the Regional Comprehensive Economic Partnership (RCEP), which is a free trade agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) and its six Free Trade Agreement partners i.e. Australia, China, India, Japan, New Zealand and Republic of Korea . ASEAN comprises countries like Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The RCEP marks ASEAN’s biggest free trade pact to date, covering a market of 2.2 billion people with a combined size of US$26.2 trillion or 30% of the world’s GDP. While it is largely being perceived as an economic partnership, studies have shown that the economy does affect the environment to a certain extent, which is why there are growing interests in promoting and activating the circular economy model to enable more sustainable and environmentally-friendly growth. 

With the RCEP, quotas and tariffs would be eliminated in over 65% of goods traded and this might improve market access. Business dealings would be made predictable with common rules of origin and transparent regulations which is always one of the top concerns for any potential investors. Apart from this, it also presents an opportunity to shape business policies to be more in line with environmentally-friendly practices and equitable social growth. A more holistic approach would encourage more firms to invest more in the region, including building resilient supply chains and services that could mitigate ESG-related risks and generating jobs that are grounded on strong meritocratic principles. 

Second, city mayors are stepping up with their experiences in working with international organisations on ESG-related projects. For example, Pasig City Mayor Vico Sotto from the Philippines, stepped up to initiate the ‘mobile market’ where city residents could purchase fresh goods right from their vicinity. This initiative encouraged people to stay home as the ‘mobile market’ is accessible. This reduced logistics transportation thereby reducing carbon emission and also helped in activating the local market. These upcoming mayors are well-positioned to understand the benefits of responding to global trends and commitments such as climate change, changing human behaviors and other ESG-related issues. 

Some of the more progressive countries within the Southeast Asia region, have emphasised on underpinning their forward policies with the sustainable development pillars. Cities must continually keep up and work towards creating a place to live, work and play and this has clearly become an even more important concept during the Covid-19 pandemic. During the pandemic, many already observed that global talents can continue to contribute productively from anywhere in the world therefore, do not really have the need to seek out places for work. To attract global talents, the main differentiator would be to create an environment that has high quality of life and also be climate-risks resilient. 

Apart from this, the attention is also once more again on urban areas and the mixed-use planning of these locations. Studies have also shown that people’s travelling behavior has changed under the lockdowns that were imposed during the Covid-19 pandemic. Demand for travel has reduced and that people will travel less by public transport. Walking and cycling can be important ways to maintain satisfactory levels of health and well-being. This will change the way urban planning is traditionally planned and unfolded. This entails a discussion with urban planning professionals and other stakeholders on urban density, open spaces and the demand for affordable housing.

My work with planners and finance firms from the region and beyond, revealed that there is a growing interest in the terms “Resilience” and “Climate Risk” and it is mainly driven by issues stemming from climate change. One common topic is to develop strategies to sustain the functioning of urban communities, business operations, supply chain operations amid stresses and disruptions that might occur due to climate change. A good number of cities around the globe are improving in this area and more Southeast Asian cities should certainly do more in this area too.  

Sustainable urban development is no easy task. Execution requires coordinating and communicating with stakeholders who sometimes do not see eye-to-eye on certain issues and it calls for a lot of skill and persistence to pull projects through. This is especially so for places where the administration has to take into consideration the rural areas and smaller communities, and how these communities seamlessly integrate with the changes of the urban and major cities.  

Keeping sustainable urban development on track entails setting out clear guidelines with hawkish monitoring. The mantra is to adopt a Whole-of-system approach whereby all arms of urban development work hand-in-hand and not against one another, while keeping the big picture in mind. Uninterrupted lateral and vertical communication is one of the key enablers to actualising the Whole-of-system approach, with proper mechanisms in place to review and adapt to new information. New information may sometimes require novel adaptation and is absolutely critical to fostering a city that flourishes.  

Sustainable urban development is not the only option moving forward but with many environmental indicators trending south at the moment, it could be the only logical pathway to Southeast Asia region’s future. 

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References

(n.d.). Retrieved from ASEAN hits historic milestone with signing of RCEP. (2020, November 26). Retrieved from Morais, L. H., Pinto, D. C., & Cruz-Jesus, F. (2021). Circular economy engagement: Altruism, status, and cultural orientation as drivers for sustainable consumption. Sustainable Production and Consumption, 27, 523-533. doi:10.1016/j.spc.2021.01.019

UNUniversity. (n.d.). How Cities in South-East Asia Are Acting on the SDGs Ahead of Their National Governments. Retrieved from Vos, J. D. (2020). The effect of COVID-19 and subsequent social distancing on travel behavior. Transportation Research Interdisciplinary Perspectives, 5, 100121. doi:10.1016/j.trip.2020.100121