Harvard University

Written by Zeng Han-Jun

Most people aspire to better their lives. Some achieve it by seeking better employment opportunities and others through migration. There are many ways to achieving it and no matter which channel they rely on, I think that one of the driving factors, is because they are aware that it is attainable. In the past, there are some people who had no way of knowing how they could progress in life. To do so meant that they had to either: adopt a shotgun approach, trying out many different options and seeing which would yield results or simply just forging ahead with whatever opportunities that they had, without knowing and/ or caring how things would turn out.

Technology is changing everything. Information is freely available everywhere as long as you have access to at least 2G internet network. Now, with the speed at how internet technology is progressing, there is a very high chance that most of us would be enjoying much cheaper internet services and greater internet coverage. Cheaper internet allows more people to digest contents from social platforms and this increases awareness of how others in foreign countries are living their lives, for example, eating habits, living conditions, working conditions, salaries drawn and so on.

Against this backdrop, some might start to think that the grass is greener on the other side and then aspire to migrate, for that kind of lifestyle. This is one of the factors that drive migration and will increasingly be so. In fact, I believe that the focus should be on urban migration because many of the office-based jobs that the younger generations yearn for, are mostly based in urban environment.

For perspective, according to World Bank’s data, the urban and rural populations in 2007 were almost exactly equal at 3.33 billion each. Fast forward to 2020, the urban populations has increased beyond 4.4 billion, while the world’s rural populations had increased only slightly beyond 3.4 billion. We cannot be sure if this is due solely to urban migration, but by observing the shape of the trend, the plain reality is that our urban population is increasing at an increasing rate. Also, it appeared that the rural population has started to taper off in 2020 and might set to decrease in the short-term future.

This shows clearly that more people want to migrate to urban environment. As such, governments in choice areas for migration will have to tackle this issue and this could mean allocating substantial amount of public funding and also chaperoning more private investments into building more urban spaces for this group of people. They need to anticipate this and prepare in advance so that they are able to develop sufficient buffer to maintain the livability of their environment.

The below chart, reproduced from WEF, reveals some interesting trends, painting North America, western parts of Europe and Australia as the traditional centers of migration growth. In the same chart, it highlighted cities like Singapore, Seoul, Tokyo, Bangkok, eastern parts of Europe, Southern Africa, certain places in South America, etc as the new centers of migration growth. As such, the livability of these centers of new migration growth is going to be an important topic because it will be one of the defining factors when it comes to attracting talents.

The livability of urban environment is the outcome of the balance among important factors such as the ability of a society in providing sufficient and good employment opportunities, ensuring high quality of life and fostering an environmentally friendly built environment. It is a dynamic process; its outcome constantly being shaped by movement of people in and out of the urban environment.

Facilitating the movement of people has its fair share of challenges, some of which could disturb the sensitive balance of livability in many societies.  One way to solving this, is through creative and innovative shaping of urban environment so that it allows for sufficient living spaces, non-disruptive flow of people and goods, and designing pockets of areas for somewhat private gatherings. All these without stifling the exuberance of the human spirit.

This is achievable, a concept that has been brought to life in some of the best parks in the world and it could be adapted for urban environment as well – a clever fusion of the natural environment and elements and infrastructure, combined with a keen understanding of social behavior. There are also many naturally occurring environments that foster this kind of openness and dynamic interactions. These types of spaces could also be found in pockets of forests or along flowing rivers where wonderous diversity of organisms live together in high density. Similar concepts could be found in many other parts of nature as well. Nature is an excellent source of inspiration.

One thing for sure. Reimagination of our built environment to handle increasing urban migration, will require substantial amount of construction work. These construction works must be strategically planned, so that we could avoid the urban sprawl that is found in many cities around the world. Another thing to note, is that construction is both energy- and material-intensive. The sector is significant in GHG emissions and when adding emissions from the building construction industry on top of operational emissions, the sector accounted for 38% of total global energy-related CO2 emissions. Urban migration trend could push this figure up as the years go by.

In fact, the effects would be more pronounced in the new centers for migration growth, that is, Singapore, Seoul, Tokyo, Bangkok, eastern parts of Europe, Southern Africa, certain places in South America, etc. And because of the possible uptrend of carbon emission and how such metrics are being reported internationally, these locations could become possible candidates for being flagged out as high environmental polluters because of their construction activities in the short- to medium-term future.

Most of these new centers of future migration growth, already have high trading volume.  It would be risky to their trading activities if these countries were flagged out as high environmental polluters, as this would stress trade agreements and impede supply chain in the short- and medium-term future.

Timber is already in very short supply. Switching to timber form of construction, could potentially attract bad actors into the market space and result in even more illegal logging of trees. Advancements in satellite and traceability technology could slow down these bad actors and foster sustainable harvesting.

However, even with sustainable and regenerative techniques, we need to be aware that trees, like all products of nature, need sufficient time to grow into healthy status before it is ripe for timbering. For the trees to reach their full growth, it really depends on the climate and the water available. First, our climate is changing therefore the effect on trees is unpredictable. Second, we are running out of fresh water and seeping of saltwater inland is already threatening many fauna and flora species around the world. In tropical climates with warm weather and a plentiful water supply, a tree could become fully grown in 30 years. A tree in cooler regions may take several hundred years to reach full maturity depending on the tree species.

Until we have rejuvenated our green lushes to a balance point, we might need to change the way we construct our urban spaces via green steel, green concrete, green design and so on. Not just moderating and lowering the amount of carbon emissions from these construction activities but thinking of methods to harness carbon dioxide and turning them into building materials. That means being bold with our approaches, elevating ourselves beyond the Net Zero principal. One promising area of research is upcycling carbon dioxide into building materials such as concrete.

Cement production, which is used to make concrete, accounts for up to 5% of total global carbon emissions. Current research and development efforts have demonstrated that reduction of the carbon and water footprint in concrete production can be achieved by curing it with waste CO2 rather than with water. Again, I have to highlight that water scarcity is affecting many parts of the world and we need to think of ways to reduce the amount of water that is used in industrial and construction activities.

Direct carbon capture technology is already available to augment this process, but the process of harnessing carbon dioxide for concrete production has not been able to reach the point whereby it could scale commercially. Countries that could fast-track this development are those that already have strong private-public partnership between the building regulators, research community and builders. These bodies of collaboration are in an excellent position to capture the future market of green construction.

Written by Zeng Han-Jun

Looking through the recent report released by Vivid Economics (VE), I cannot help but zoom into the stellar performance of Canada, how they have reversed their poor performance and topped the chart in creating stimulus packages that better our natural environment. The chart below, reproduced from VE’s report, is an index that attempted to capture the so-called greenness of stimulus package by 11 major economies.  Basically, it is a measure of the amount of money that governments spent on stimulating their economies during the Covid-19 pandemic, and to check on how much of that contributed to greening our environment.

Canada did well, as you can see from this chart. The country managed to secure third place, ranking just behind the European Union, and they managed to pull this off from a negative Greenness of Stimulus Index (GSI) score in October 2020. Additionally, the country further pledged more than USD$12 billion over five years for public transport, cementing their support for their sustainability drive. This showed that the government is committed to improving and that strong environmental stimulus measures can overcome even poor past performance.

What Canada has done to achieve this, is that they have provided an entire suite of measures such as tax deferments, direct payments and wage subsidies in order to support local businesses.  Those portions that went to supporting the agriculture, energy, green transport and nature-based solutions initiatives, helped to improve Canada’s GSI score. Those that went to supporting airport, airline support and road network development policies, contributed to the decline of Canada’s GSI score. Overall, after netting the improvements against the declines, Canada turned out pretty well, and as I mentioned earlier, the outcomes made me very interested in the details of the GSI framework.

The GSI framework took into account the amount of stimulus money that went into environmentally relevant sectors, existing green orientation of those sectors and the efforts to steer stimulus toward (or away from) sustainability. Based on the report, the environmentally relevant sectors are agriculture, industry, manufacturing, waste, energy and transportation.

We do not know the exact details of the calculations and what goes into the equations; Are there any weightages to the sectors? If so, how are the weightages are derived? Are the weightages adjusted for the environmental viability of the sectors for the short-, medium- or long-term outlook (for example, how does the introduction and impact of emerging technology such as sustainable aviation fuel, road surface chargers, etc, affect the transport sector)? Is the money spent, averaged against land size or per capita? How do they deal with those countries that do not have all the environmentally relevant sectors for example, agriculture? What about extremely pollutive sectors that cause direct and indirect environmental harm such as the fashion industry? Why do they exclude these sectors and include others?

We have no way of knowing these. In the case of Canada, the country pumped significant stimulus into the agriculture sector and that helped to push up the GSI score. Some countries may not have or are unable to have significant presence in certain sectors due to geographical limitations. Should these countries be included in the basket?

There are so many questions, but, then again, the survey and the index managed to give a rough sense of what each country is doing for their respective sustainability journey. Plus, it sort of emphasizes the importance of the role that government plays in advancing the green economy.

In fact, there are so many things that we have to do to green our future. My only fear is that we cannot visualize the vast number of details to keep things going; some of which require a total transformation of job scopes, in others the creation of entirely new jobs that we cannot even imagine now. All of which require substantive efforts in education, re-education, encouragement, policy shifts and private-public partnerships. All these, in order to shepherd as much interest as possible towards positive transformation. So, what else can we do?

Sustainability policy

We need a roadmap that fosters innovations to reduce dramatically the cost of adopting renewable energy. We know that the cost of production, especially for solar, is dropping. By right, that should tease countries into wider adoption of solar, but I argue that the adoption dynamics is not simply due to a single factor. The below chart is reproduced from IEA, and it showed that China accounted for 46% of the new generating renewable capacity added in 2021, mostly in offshore wind which increased sixfold. In Europe, solar accounted for most of the growth, with notable projects in Germany, Poland, France and Spain. India’s, ASEAN’s and MEA’s take up rate in the measured categories of renewable energy, paled in comparison to those of China’s, USA’s and Europe’s.

According to recent trailing 12 months estimates by IEA, the cost of polysilicon used in solar panels has more than quadrupled, while the price of steel rose by 50% and copper by 70%. Overall, raw material costs for all types of renewable energy were 15% to 25% higher. Inflation and uncertainties of global markets could add inflationary pressure on the already rising cost of materials, materials acquisitions and construction of renewable energy facilities.

Additionally, ESG regulations are closing onto mining activities, putting the lenses on mining’s impacts on the environment and nearby communities, energy sources used in mining operations, behavior of security forces in mining areas, treatments of waste discharges, exit strategies of miners from exhausted mines and the list continues. Plus, countries are going after the same materials that exist in finite amounts. All these compounds and complicates the acquisition of materials, but at the other end of the spectrum, I say that there has never been a brighter future for companies that are providing advanced recycling services.

Also, on the upside, I argue that there is a lot of potential for India, ASEAN and MEA to play catch up and it is important that they do. The military aggression by Russia in Ukraine has exposed not only vulnerabilities in the global supply chain network but also in energy policies. Renewable energy capabilities are ways to mitigate this issue, but we need innovations that further reduce the cost of adopting these alternative energy sources, for the reasons that I have stated above.

Transition strategy

Steering away from this, I want to dive somewhat into the operations underlying policies. Effective changes take time, require investment and need effort. All of these cannot gel unless there is significant cooperation between the people, public and private segments. In this, I see clearly that there is a lot of opportunities for transition finance to play a critical part in shaping the ongoing narratives that are brewing in different sectors along the short-, medium- and long-term future.

The details are important. For example, preparing the student body for the future of work, requires clever policies, cleverer implementations and smart monitoring. Smart monitoring is critical especially for large jurisdictions. Quick and drastic pivots are often… disastrous.  Likewise for the existing workforce, judicious attempts should be made to pinpoint and identify largely similar work patterns between existing industries and future industries, thereby using the observations as a bridge for the transition. Similarly for equipment, just as Heckler and Koch adapted their sewing machines into the present-day sub machine guns HK MP5 or how some countries are adapting their hydropower dams into solar power plants, we must also adapt accordingly with the times. All these require innovators, scientists, engineers, education specialists, etc to come together and focus their collective intellectual prowess to effect a transformative change.

Establishment of climate change measures by the government

Elected governments should also play their parts well. Apart from establishing decarbonization policies and roadmaps for climate change measures, they could further enhance their value-add by (1) coordinating and facilitating collaborations between industry groups, financial institutions and various government agencies, (2) fostering an environment whereby public sector agencies and educational institutions are able to advance, retain and accumulate knowledge in specialized technical domains, (3) increasing awareness of sustainability and climate change issues among the citizens and encouraging them towards a Net Zero future, and (4) deploying government funds properly with an incentives and subsidies system that uplifts citizens towards a sustainability-oriented mindset – which is what I hope that the Green Stimulus Index (GSI) is trying to promote.

Public sector, unlike most in the private sector, have the capacity to look further across the horizon, and plan for the future. Public sector agencies usually are not tied to short-term demands for financial performances that are largely driven by profit-seeking actors. In fact, some public sector agencies are able to aggregate data from various sources, to construct a slightly better-informed picture of what is going on in the world, and they should make good use of that advantage.

These public sector players are able to establish trends and recognize patterns that may not be so obvious to some of their private sector counterparts. As such, they should work closely with the markets to shape and move the conversation towards the greater good for everyone, all these while balancing the private sector’s profit-seeking behavior. This creates a win-win-win outcome for people, public and private sector. Some private sector counterparts are in the better position to harness useful data and subsequently develop meaningful information. These organizations could explore to ease any potential frictions with policy makers, by extending their capabilities to augment policymaking and of course, treading carefully along and around privacy issues.

Establishment of a green financial system

The financial system should play a strong support role to what the governments are doing. According to the result of a survey conducted across 9,443 respondents in 2020, published by Statista in 2022 and reproduced below, 14% of small- and medium-sized companies in the United States had debt outstanding between USD$50,000 and USD$100,000. This means that 79% had outstanding debts. Plus, NASDAQ recently reported that there are still strong demands for bonds despite the Fed looking to raise interest rates in order to keep inflation in check. This goes to hint that the financial markets, through its various instruments, should still have some level of influence over corporate behavior.

If they are seeing what the public sector is seeing, and also in preparation for changing consumer behavior and job-seeking behavior for example, like those that would surface from the emerging Gen A cohort. Then, it would be logical to put in place the pillars and sandboxes for innovations, digital platforms, external certifications, ratings, accounting standards, risks metrics, risks appetites, etc. Additionally, also shaping intermediaries like venture capitalists, private equities and working with game-changing actors like FinTech providers.

This could enable a new financial market that is in a better position to handle green products with clear sustainability-linked KPIs, for example, private-public partnerships, infrastructure finance, transition finance, blended finance, green bonds, ESG funds, sustainable indices, securitization and derivatives, etc.

Financial markets should work closely with industry experts and government bodies to chisel and chip away bits and pieces of old financial framework, artfully hammering out a roadmap for green finance in general. Changes such as developing a sensible carbon pricing system, strengthening transparency, promoting information disclosure and tweaking the incentive framework amongst others, to shape risk and return, is a definite must. This would help in proliferating extensively and intensively the sustainability mindshare.

Written by Zeng Han-Jun

The energy crisis sparked by Russia’s military aggression had many rethinking about the future of energy and justly as well, because both events, the Covid-19 pandemic and Russia’s military aggression have disrupted supply chain and caused energy prices to spike. This has affected many people’s standard of living in many ways, one of which is to physically suffer through the cold weather and it might get worse during winter. I strongly believe that those who spent most of their lives in the global south, might find it difficult to understand how bitter cold winters can be in some parts of the world and the importance of keeping warm when it freezes. It is a very painful lesson that stemmed partly from over-relying on a handful of traditional energy sources.

As such, it is logical that there is a growing demand for alternative energy sources in many areas, from powering factories, heating up homes and offices, to moving vehicles. In the earlier phase of the growing demand, the narrative was that using fossil fuel is bad for the environment because of the substantial release of carbon into our atmosphere. That awareness played an important role in promoting electric batteries as an alternate mean of powering vehicles.

In my earlier think piece, I discussed about the current production level of lithium, which is an important component of the EVs’ electric battery, and how it pales when compared to the estimated demand for lithium by 2030. If you refer to the heat map below, you would be able to estimate that the total global lithium production stood at roughly around 82,200 tons. Several current estimates and studies showed that the total global demand for lithium in 2030, will go far beyond 82,200 tons. In exact figure, it is more than 1.9 million tons which is equivalent to 23 times more than the total global production figure in 2020.

Now, if you were to refer again to the heat map produced by the U.S. Geological Survey, you will gather that the total global store of lithium is roughly about 50 million tons. At the first glance, it may seem that we have enough lithium to go around and technically could continue with mining. If the global demand is to peak at 1.9 million tons in 2030, there is still enough lithium to extract for another good 26 years, but in reality, demand for lithium will most likely continue to grow after 2030.

This is why analysts have put out the figure that we could be in short supply of lithium by 2050. Some people that I have spoken to, believe that lithium recycling technology would be more stable and productive, thus enabling the circulation of mined lithium for industrial uses for many more years after 2050. And this is their justification for greater activity in lithium mining.

We would if we could but should we really do so?

I think that it is not feasible because of the following five reasons. First of all, the physical disturbances to the environment and communities that are living near to the mines. Second, carbon emission of the mining operations. Third, the future geopolitical tension that it creates and fourth, creating a single point of failure by focusing too much on electric batteries. Let me explain why.

1. Physical disturbances to the environment and nearby communities

Now, partly because of expanding interest in sustainability, people are starting to understand the impacts that some human activities, including mining, has on the environment. I see that the current narrative has evolved into questioning whether or not Electric Vehicles (EVs) are truly one of the silver bullets to saving our environment or merely just kicking the can down the street. First of all, I noted that many apply a broad understanding of what they know of mining i.e. the usual digging of earth, crushing boulders and deployment of many environmentally unfriendly technology, to lithium mining. Mining activities are generally all the same, but it is quite different with lithium mining at the moment.

Lithium is historically known to be produced from two sources: brines and hard rock mining. Lithium produced from brines is a cost-efficient process. These brines containing lithium are derived entirely from the leaching of volcanic rocks. The cost of lithium produced from hard rock mining is double than that of what is extracted from brines containing the metal. Mining starts by drilling a hole and pumping brine to the surface. Miners then leave it to evaporate for months, first creating a mix of manganese, potassium, borax, and salts which is filtered and placed into another evaporation pool.

It would take roughly between 12 and 18 months for that mix to be filtered enough in order to be able to extract the lithium carbonate. While it is relatively cheap and effective, the process needs a lot of water, estimated at 1.9 million liters per ton of lithium extracted.

For perspective, it was estimated that it would take around 63 kg of 99.5% pure lithium to make a 70 kWh EV battery pack. This means that the manufacturing would use up more than 119,000 liters of water, equivalent to satisfying a single full grown person’s drinking need for 32,162 days (~ 88 years).

That’s just one way to see it. Here is another way. Estimates of water audits showed that it takes about 237 liters of water to produce about 1 kg of cabbage, so instead of producing one battery pack, with the same amount of water, you could technically produce about 502 kg of cabbage which I think, could be used to feed a small family for about a year or so? Instead of cabbages, you could also divert water to planting trees as well. So, the mining process diverts water away from what the environment and man need.

These are the opportunity cost to manufacturing a single EV battery pack. However, I could also reframe my thinking and adopt a green and longer-term perspective. I could adapt the single battery pack to other environmentally friendly uses that might potentially produce more water, food, greenery or other social benefits than what the manufacturing originally consumes. That being the case, I might essentially, at multiple levels, be producing an ESG- (Environmental, Social and Governance) friendly product.

2. Carbon emission of the Lithium mining operations

The below graph, produced by the International Energy Agency in 2021, is a very interesting chart. It shows that the current Lithium mining pathway produces roughly about 2.8 tCO2 per tonne LCE equivalent, much lower than most other types of mining operations.

At this level of activity, the production houses are churning out roughly about 82,200 tons of lithium (2020 figures). We would have to activate or maybe even develop other ways of extracting lithium if we are going to meet the growing demand. Meeting growing demand for lithium could lead to higher carbon emission. Based on this graph, by activating all known means at the moment, we would increase the carbon emission of lithium mining to 35.2 tCO2 per tonne LCE equivalent, from 2.8 tCO2 per tonne LCE equivalent (~ 1,257% increase).

Most people would think that since other types of activities are faring much worse, so why the focus on lithium mining? The thing is, every bit counts, and the ESG and sustainability focus is slowly and surely extending to all domains, not just lithium mining. Provided that no major events occur and shake the fundaments of the current world structure, ESG and sustainability certifications and regulations most definitely will cover all industries in the future, hopefully moderating carbon emission and ease the global temperature rise to a more human-acceptable level.

3. Potential geopolitical tension

It is no secret knowledge and almost everyone knows about it, dominance over or at least keeping close to raw materials, is one of the key chess moves that could advance one’s strategic position. If EV ecosystem, comprising all types of mobility devices or modes, is the chess game, then lithium is one of the key components to triumph. Looking at the above heat map produced by the U.S. Geological Survey, one could get a rough give-or-take intuitive sense of who is dominating the chess game.

What this means is that, if there is anyone who is a little bit keen on any of the EV-related businesses, they should start to join the winning side or at least slowly start divesting away from the disadvantaged side.

4. Creating a single point of failure by focusing too much on electric batteries

If there are any learning lessons to distill from the Covid-19 pandemic and Russia’s military aggression, I would say that it is the identification and continual mitigations of any single points of failures to important functions. Electric batteries are merely a store of energy, and this energy could directly or indirectly be derived from different sources such as fossil fuel, alternative energy or renewable energy. With the current technology, it is entirely possible to recreate a vehicle that is powered entirely by alternative or renewable energy, without the use of electric batteries.

When energy sources were threatened, scientists and engineers quickly leaped forward to develop new ways to powering vehicles. Similarly, if anyone were to push too hard the narrative of EVs while at the same time stifling competition, the tables could flip, thereby forcing competition to try to develop alternate propulsion methods which sidesteps entirely the use of electric batteries. In fact, the technology is already there and energy sources like hydrogen, ammonia, ethanol (from sugar cane), hydrogen fuel cell, solar, road-power, to name a few, are being implemented, adapted and integrated into existing vehicle technology. Even fuel stations are currently being adapted to provide different types of energy sources to vehicles. However, when it comes to safety, I place higher favorable weightage on electric batteries than hydrogen, and I will explain why later.

Hydrogen is a promising energy source, and another potential energy source is ammonia. One of the key areas to improve on, is to refine the waste collection and management system, then integrating that understanding into the process of producing hydrogen. This area holds a lot of potential to solving important environmental issues. As such, it is critical to adopt a holistic approach to tackling this challenge and I believe that it could only be achieved by viewing through the lenses of multiple urban system sciences without forsaking the operational details.

All details must be considered from an urban system science point of view. For example, positioning of the waste management plants, auxiliary waste management centers and hydrogen power plants, must be precisely planned, according to the future development plans, traffic patterns, national defense considerations, weather patterns and other natural phenomenon. More does not mean better, neither is less bad, but an optimal number of placements should enable complement strengthening of each other’s capabilities.

This is important in itself, and also extends its influence on the transport patterns of the waste management vehicles and the hydrogen transport vehicles, affecting factors like traffic volume and national defense. Exploration of Artificial Intelligence in augmenting this area is a promising area, still at a nascent level but definitely achievable.

In terms of safety, I think that electric batteries are the better solution compared to hydrogen. Electric batteries burn but hydrogen can cause extremely life-threatening explosions that can take down entire buildings within the destruction perimeter. Protective engineering techniques such as the strategic use of reinforced concrete, steel sheets and others, become very important subjects. The greater the underground hydrogen pipeline network proliferates, the greater need to build in more safety factors. Such consideration becomes exceedingly critical to providing a safe space in highly built up and dense urban environment. There were several past explosions involving natural gas pipelines in New York and the results were skyrocketing.

A lot of advance work is needed to develop the certified framework for pyrolysis process, hydrogen production and safety inspection at different stages of the value chain. Apart from that, substantial amount of time must be planned for the local workforce to gain sufficient expertise in these areas before rolling out the initiatives.

Written by Zeng Han-Jun

Even with the easing of Covid-19 restrictions, economic recovery still seemed to be hampered by the global manpower crunch that is faced in many countries. On this point, it appears that this trend might continue to worsen in the short- to medium-term future and is expected to impact many industries, more so in those that rely heavily on manpower.

Logistics is one such industry. It is one of the key enablers of the world’s supply chain and entire countries depend on it for movement of goods within countries and across borders. This industry is a critical node to the entire global business system because it interacts with many resources such as equipment, machinery, components, materials, fertilizers, seeds, food and drinks and items, to homes, supermarkets, stores, etc. Many research houses also look at logistics as a proxy to economic performance therefore this gives one a perspective of how important it is.

In fact, today’s global distribution, manufacturing and procurement depends heavily on logistics. Even with the growth of additive manufacturing, we would still need to depend on the logistic sector to transport the raw materials for most additive manufacturing operations.

The subset components of logistics could be broadly categorized as land, sea and air transport. Simply phrased, goods and materials can be transported to its destination via land, sea and air transport, all of which are important functioning gears to the great machinery of a sustainable urban development.

For those reasons, that is why I decided to write about sea transport in this think piece. If people were to draw parallels between cities and urban development to living bodies, then I would boldly say that the sea transport component comprising the shipping capabilities, port management and its connectivity paths to the rest of the inland transport systems, is similar to the mouth of the living body.

Just as the mouth receives nourishments to sustain and grow the living body, the entire combined functions of the shipping capabilities and port management, too receives the necessary goods and materials to sustain and build a country. Even large, prefabricated building components are now constructed overseas, then shipped to the designated country for further assembly into residential, office, entertainment or factory buildings.

The shipping-related industry is manpower-intensive yet persistently faces the problem of manpower shortages. The pipeline of talents is expected to continue to veer away from this industry in the future. Developed countries are facing similar issues but for different reasons. For developing countries, I believe that one of the reasons why this is happening, is because more people are able to find equal if not more financial compensations in freelancing, office-based jobs, sales career in insurance and real estate or emerging opportunities in content creation, cryptocurrency, web3, etc. Most of these jobs can be performed remotely and also from anywhere in the world as long as there are internet services.

Things might worsen when digitalization tweaks up its knob. Once internet services become even more affordable and accessible, developing countries might start to face growing challenges in finding good and reliable workforce and also, find it increasingly difficult for any hope of creating a future-proof sustainable urban development.  The stages of development will be as such. First, the manpower will be affected. Second, means of trading will be affected. Third, economy will be affected. Fourth, social dynamics will be affected.

For perspective, let’s use Rwanda as an example. A Maritime engineer in Rwanda, earns an average salary of about USD$500 to USD$700 per month. This is a very good and respectable salary for a Maritime engineer especially after he/she/they/zir have received a number of years of professional trainings in subjects like mathematics, sciences and engineering. All of these culminate in a professionally trained mind that is skillful enough to solve difficult and complex challenges. Furthermore, it is usually in solving these complex challenges that helps to improve the ecosystem. Also, not forgetting the fact that such trainings serve as fundament to receiving and understanding even more complicated and difficult subjects, thereby enabling one to push the envelope for innovations in specialized areas.

So, with this perspective in place, let me explain how digitalization, and cheaper and affordable internet services, could disturb the efforts of sustainable urban development. Digitalization is going to enable more innovations which then allow people to monetize digitally in more ways than ever. Cheaper and affordable internet services will allow more people to access these means of livelihood. One popular example of how people can monetize digitally, is on the social media platform, TikTok.

The platform offers a variety of content, presented in such easy-to-consume format and its entire user experience leaves many wanting for more. Plus, TikTok performances by people in developing nations, present fresh and never-before-seen content that many global consumers crave for, which is why, many content creators from developing countries did very well during the pandemic.

Cross-cultural fascination is one of the stronger and prominent factors in drawing large crowds to these performances. If the audience likes these performances, they can reward the performer by leaving tips.  It was estimated that on an average, a creator with half a million followers or views can earn up to USD$450 a month. There are also other benefits that come along with persistency in content creation, such as sponsorships, advertisements, live shows, plus the ability to work from anywhere. All of these might add up to more than a Maritime engineer’s monthly salary of around USD$500 to USD$700.

In fact, there are several other emerging avenues that compete directly at that salary level for talents, which I have already mentioned earlier. The best part about these career alternatives is the low barriers to entry and yet they still remain financially rewarding. Well, of course one can argue that emerging opportunities present new sources of income to individuals and also to the nation but at the expense of what? Conventional strategies of relying on tax revenue to fund studies or subsidize salaries, are dependent on students’ interest in the subject and market forces at play. In the worst-case scenario, digitalization could further hollow out the remaining of what is left of the shipping industry.

Countries at risk from the rise of digitalization could be the ones that show the smallest salary gap between professional salaries in the Maritime industry and the potential salary offered by these emerging opportunities. Besides that, those countries with stagnating salaries will face the greatest risk because they might continue to face challenges in keeping pace. In addition to this, we also have inflation to account for. Turnover is going to continue if salaries cannot keep up with global inflation and this might make it even more appealing to turn to alternative livelihoods.

Also, more people are starting to question the sustainability quotient of the shipping sector as Environment, Social and Governance (ESG) concerns start to gain traction among the regulators, interest groups, financiers and consumers. Several prominent players are starting to explore alternative energy sources like wind-assisted propulsion, electric batteries, solar, hydrogen, ammonia, etc but overall, the perception of shipping still pales in the area of sustainability. I believe that this would have substantial impact on young people’s future career choices.

Automation combined with Artificial Intelligence is definitely one way to overcome constraints, but it involves significant investments, rigorous long-term planning and continuing execution. An intensive study of the organization is required so that some roles could be streamlined, some roles to be eliminated, some roles to be changed entirely, funds and salaries re-allocated and in many cases, knowledge management practices to be enshrined.  The outcome would be an organization that has shrunk in headcounts, to perhaps a few hundred people armed with automation that is powered by Artificial Intelligence, replacing the work performed by more than few thousand workers previously.

There are many other ways to explore but that is not the point of this think piece. Perhaps I might reserve it to a future piece (or maybe not). The main point that I am trying to drive across and to get anyone to ponder over is that, firstly, digitalization is going to create new economic opportunities but at what opportunity cost? Second, what are the possible impacts in the short-, medium- and long-term future, and finally, what strategic moves to safe-guard optimally against these impacts?

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.

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.

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.

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

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 

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