~ Archive for Asean ~

Turning the fast-growing problem of water hyacinth into sustainable energy solution

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Photo by Wichian Wichitsak

Written by Han-Jun, Zeng

 

The sprawling presence of water hyacinth in some water bodies, presents a growing challenge to some governments around the world right now, especially those that are situated in places with hotter climate. Water hyacinth multiples rapidly in such climate and it is expected that its rate of growth might increase as the global temperature and rainfall increase.

 

Already, these plants are suffocating some river bodies with their large foliage, often covering the entire surfaces of rivers thereby disrupting the photosynthetic process that is taking place between the sunlight and the fauna and flora in the river. The growth sprawl decreases the amount of sunlight received by these plants, slows down the oxygen creation process and disturbs the natural ecosystem.

 

A lot of things are happening at this point. Certain plants wither then die off, and this affects organisms that thrive off these plants. Fishes and other living organisms are also affected due to insufficient oxygen. Water flow slows down significantly because the stalks of the water hyacinths pack so closely together, affecting water movement. The entire water body then slowly becomes a huge mass of stagnant water, giving rise to a huge array of disease vector issues.

 

This has drastic negative implications on the nearby land ecosystem as well. The land ecosystem, comprising people, animals, insects and plants depend heavily on the adjacent water bodies for their daily needs. Rural people who depend on the water for daily needs such as washing, food sources, etc, might have to seek alternatives if the river system fails. If none are available, they’ll have to migrate to other places. This means that they might have to integrate into other communities thus giving rise to potential social implications.

 

The same goes for animals and insects. If they are not able to adapt to the new situation, they too might have to migrate elsewhere and therein lies the possibility that their migration will disturb other ecosystems. New animals and insect immigrants have to compete for resources with existing living organisms in those ecosystems. Changes to the food chain could sometimes create unexpected outcomes. For e.g. certain incumbent living organisms may proliferate because its predator population was reduced drastically by the changes. Or it may turn out differently too, in many unpredictable ways.

 

While the leaves of water hyacinth generally turn brown and die during the winter, many water hyacinth plants survive the winter and grow new leaves in spring. This is not the case for countries that are located in tropical areas where temperature remains warm throughout the year. The warm temperature causes the plants to grow stolons, or spreading stems, from which daughter plants grow. Stolon growth is a key driver of water hyacinth dispersal.

 

Once it starts to flourish, it will clog up waterway which presents a lot of problems to waterway transportation, hydropower stations, etc and these are often very important topics underpinning sustainable urban development. For e.g., in lieu of cars, trains and trams, some societies are contemplating the use of sustainable waterway transportation to decongest land traffic.  Additionally, many countries are turning to hydropower station for their energy needs. These tools can be rendered useless by natural outcomes of climate change, in this case, growth of water hyacinth.

 

Significant investments have already been poured into such sustainable development initiatives. I predict that more investment will go into these areas as the financial markets, regulators and consumers are starting to emphasize on Environmental, Social and Governance (ESG) topics. Once the fundaments are cemented, we can also expect financial derivatives to sprout off from the vanillas, creating an even larger market.

 

These extremely fast-growing water hyacinth (and will grow even faster when global temperature increases), can derail water supplies’, waterways’ and hydropower stations’ operations, affecting significant future investments and government’s capability to provide for their people.

 

Since the 1970s, many methods have been proposed to cull these water hyacinth, but this issue still persists. Unfortunately, I think that this challenge will persist into the short to medium term future.

 

However, I propose for those that are facing these issues, to reframe their thinking and view these water hyacinth as a resource. Through proper pyrolysis process and manufacturing techniques, these water hyacinth can be harvested and transformed into water hyacinth biomass briquette. This product can then be burnt in electric power plants to generate electricity.

 

According to different studies, the average heat value of water hyacinth biomass briquette is about 14 MJ/kg to 20MJ/kg, averaging 15MJ/kg. For perspective, the heat value of natural gas is about 42 MJ/kg to 55 MJ/kg and hard black coal is about 25 MJ/kg. Though not generating as much heat as the latter two, water hyacinth biomass briquette could present itself as a sustainable energy solution, provided that we can control the carbon output.

 

Apart from this, if the water hyacinth biomass briquette is manufactured to be transport-friendly, producers can export these products in larger volumes.

 

Of course, consultants might have to step in to reconfigure the electric power plants in order to accept water hyacinth biomass briquette as a burning agent. Harvesting contracts too, has to be given out. Factories need to be set up or reconfigured, to produce the biomass briquette. Logistics like land and sea transport are also essential part of the whole equation. Not forgetting about all the required certifications and licenses. All these translate to substantial financial commitment but give and take, the investment might be able to create new jobs, expertise and experience, all of which might contribute to creating positive economic and social values.

 

The one plant crop that might tide us over this period of energy and food uncertainty

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Hemp, commonly known as industrial hemp, is a plant of the Cannabaceae family that is typically grown for its bast fiber or edible seeds. The plant is commonly mistaken with cannabis plants, which are used to make marijuana and the narcotic preparation hashish.

 

Although all three products—hemp, marijuana, and hashish—contain tetrahydrocannabinol (THC), a chemical that causes psychoactive effects in humans, the strain of cannabis grown for hemp contains far less THC than that grown for marijuana or hashish.

 

In the public eye, the line drawn between “hemp” and “cannabis” might be a bit murky, but hemp and cannabis aren’t as similar as they may appear.

 

THC is the psychoactive element in cannabis that causes a ‘high,’ according to scientific study. The concentration of THC in a cannabis plant determines whether it is hemp or marijuana. Hemp is defined as having a THC concentration of 0.3 percent or below. Marijuana is defined as having a THC concentration more than 0.3 percent.

 

People do smoke hemp, according to what I’ve learned from asking around. It is quickly becoming one of the most common methods of taking Cannabidiol (CBD). CBD is a substance present in trace amounts in hemp.

 

Although it does not make the smoker high, the user may smoke hemp for a multitude of reasons such as anxiety, depression, pain, inflammation, and overall health and wellbeing.

 

But the focus of my writing is not on smoking it but rather, utilizing this plant for other types of practical and industrial uses.

 

As many of us already know, the majority of the plastic we use today is manufactured from cellulose derived from petroleum. Petroleum is derived from oil, which means that the end-product that is plastic, is highly persistent, very difficult to break down therefore very harmful to our environment.

 

Hemp can be used to create polymers that are both stronger than ordinary plastic and completely biodegradable.

 

Apart from using hemp to replace plastic-based products, we can also rely on hemp as a source of food. Hemp used to be widely recognized as an excellent source of nourishment all across the world. In fact, the plant is still used in some places in Asia today, even though it has become less popular.

 

Hemp seed has an ideal combination of essential fatty acids, amino acids, and oils such as Omega-3 and Omega-6.

 

It is also extremely rich in protein, to the point that some people consider hemp seeds to be a far superior option to high protein sports beverages. These proteins assist to maximize nutrient intake, maintain organs, and even build muscle.

 

Best of all, hemp is also a highly hardy plant that can thrive in harsh environments such as those found all over the world. It does not require pesticides or as much water as other crops. During the nineteenth century, the Australians survived two unusually protracted famines only on hempseed. These are important attributes to finding suitable crops to replace popular grains like rice in the context of Asia, especially when climate change threatens to destroy many types of food crops.

 

Hempseed cake is a food that may be fed to both pets and animals. It is essentially a by-product of pressing hemp for its oils, and it includes all of the nutrients that the animal need. It enables for maximal weight increase while being less expensive than regular feed.

 

Another advantage is that because hemp can be cultivated without pesticides or other dangerous chemicals, and there was research to show that it does not enter the food chain if fed to cattle.

 

When it comes to the built environment sector, you might be mildly surprised that the plant could be used to produce concrete solutions as well. Hempcrete is a hemp-based concrete solution that might be the most helpful of them all.

 

It has seven times the strength of concrete, half the weight, and three times the pliability of hemp. It is also permeable, which means it helps the structure to breathe, reducing moisture buildup and, eventually, mould and other terrible things.

 

Hempcrete also hardens over time and absorbs carbon, so offsetting the carbon impact of the construction project. If the average house were constructed with hempcrete, it could store up to more than 20,000 kilogrammes of carbon.

 

Plus, hemp also has the potential to be a carbon-neutral fuel, or something close to it. During growth, the plant collects CO2 from the environment, and when the fuel is burned, the same amount is released back into the atmosphere.

 

Because hemp-based bio-diesel is biodegradable, accidents and oil spills will not inflict the same amount of environmental harm as conventional oil does. In fact, most diesel engines can still be run on bio-fuel with minimal conversion nowadays.

 

This crop could be used as a short-term replacement to fossil fuel when the entire world attempts to switch over to other forms of renewable and clean energy.

 

On top of that, hemp can also be used to replace cotton that is obtained from harvesting from cotton crop.

 

Hemp contains two types of fibers: lengthy bast fibres found in the stem and hurds, which are the shorter inner fibres of the stem. The bast fibres are the most valuable, accounting for 20-30% of the hemp plant.

 

According to Stockholm Environment Institute study, hemp uses half the acreage of cotton, less chemical fertilisers, and less water than cotton.

 

Finally, hemp can also be used as a material to produce paper.

 

Hemp paper has several advantages over wood paper. For instance, its composition is far superior to that of wood paper. Hemp paper is rich in cellulose and has just 4-10% lignin. Wood pulp, on the other hand, includes 18-30% lignin, which must be chemically removed during the papermaking process.

 

This reduction in chemical treatment means that it consumes less water and generates less waste; the creamy colour also means that it does not require as much bleaching.

 

Hemp paper is also considerably easier to grow and requires far less resources. The quantity of paper that trees can generally create over a 20-year cycle over 4+ acres is the same as the amount of paper that hemp can make in one acre.

 

Like what I mentioned earlier, the entire world would face an onslaught of agriculture and energy crisis if climate change continues to disrupt our traditional ways of life. The switch over to renewable and clean energy is not going to be clear-cut and there will be hiccups during the transition. One way to ease the switch might be to rely on short term methods like bio-fuel.

 

Asian food staples like rice might also be affected by climate change. No matter how much Asians like their rice, it is important to explore other types of more resilient food sources.

How climate change could bring humans and animals closer, and intensify the spread of zoonotic diseases

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Climate change is changing the natural behaviour of many plants, animals and insects, and this actually has major implications on the human population as well. Studies are showing that due to climate change, the dry regions will become drier and the wet regions will become wetter. 

Overall, most of the places around Earth are steadily heating up and some places are at risk of running out of water. Based on new data inputs from the natural environment, climate models’ results are slowly converging to roughly about the same prediction outcomes as to where the liveable locations are on Earth. Even the birds have begun to change their migration patterns in response to climate change.

This is a serious concern because firstly, cities are going to be denser as more people start to move into urban areas. Secondly, new urban environments are going to sprout up in places where it is going to be more liveable and less affected by climate change. Thirdly, animals might also seek out the same liveable spaces to ensure their livelihoods. 

Animals will want to seek out places where they can find food, water and safe living spaces. When forest area reduces, there is a high possibility for the animals to forage beyond natural greenery. Inevitably, we could eventually find that we might have to live even closer to the animal kingdom than we previously thought.  

City people have poor animal husbandry practices, if any at all. Combined with high density living in urban areas, the social distance between humans and humans, also animals and humans, could only get less and less as the years go by. We are being led by our nose into a future whereby the spread of zoonotic diseases will only intensify. 

I was running through several climate models and showed particular interest in tying the results to the population density model. Just take a brief look at the following visualisations. 

The density of the blue spots is an indication of the population density of any country. If you look at the visualisations that are presented for Jarkarta, Indonesia, it looks like it could do well with some decentralisation. Indonesia has a lot of land spaces (white areas) but everyone chooses to congregate in Jakarta. 

The Indonesians made their choices which I am sure are certainly based on practical reasons but there is a serious need for decentralisation. The density of the red spot indicates hyper densification and West Jakarta is growing steadily to match the likes of Chennai, Bangalore, Delhi and Mumbai. 

These cities are real living proofs to how dense a living space can become. 

Just for information, a study found that at least 500,000 species of mammal virus are estimated to have the potential to spread in human populations, but the vast majority are currently circulating in wildlife, largely undescribed and undetected by disease outbreak surveillance (Carlson, Zipfel, Garnier, Bansal, 2019). Birds can also be carriers of diseases that could harm humans. Now, there is a growing body of evidence and research also showing that bird migratory patterns are changing due to climate change. It is subtle but surely happening. 

I zoomed into birds because countries are going to find it difficult to close its borders to this class of animals. This visualisation was produced by the UN Food and Agriculture Organization and helps us to better appreciate the migratory pathways of birds. From this, we can see that it is possible for avian disease outbreaks to spread from as far as Russia to Australia and vice versa. 

While governments are busy tackling the negative effects of the Covid-19 virus, certain parts of Europe and some East Asian countries are signalling red alerts for the appearance of Avian flu such as H5N5, H5N8 and H5N1. 

H5N1 is a type of influenza virus that causes a highly infectious, severe respiratory disease in birds called avian influenza (or “bird flu”). Human cases of H5N1 avian influenza occur occasionally, but it is difficult to transmit the infection from person to person (Taken from WHO). 

H5N8 is a subtype of the influenza A virus and is highly lethal to wild birds and poultry. H5N8 is typically not associated with humans; however, seven people in Russia were found to be infected in 2021 (Taken from Wikipedia). 

H5N5 virus is a type of highly pathogenic avian influenza that is supposedly replicating among domestic ducks and wild birds that share the same water. Such new subtypes of influenza viruses may pose pandemic threat (Li, Lv, Li, Peng, Zhou, Qin & Chai 2021).

There are already 6 avian influenza outbreaks in Europe this year. Now, health officials have stepped up to warn that large scale infections are possible if many variants appear during the same window period. 

While this is not an immediate danger at the moment, governments and planners around the world should keep tabs on such developments and find ways to grow sustainably and safely. 

References

Carlson, C. J., Zipfel, C. M., Garnier, R., & Bansal, S. (2019). Global estimates of mammalian viral diversity accounting for host sharing. Nature ecology & evolution, 3(7), 1070-1075.

Li, X., Lv, X., Li, Y., Peng, P., Zhou, R., Qin, S., … & Chai, H. (2021). Highly Pathogenic Avian Influenza A (H5N8) Virus in Swans, China, 2020. Emerging infectious diseases, 27(6), 1732.

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

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