There is a lot happening on this planet. Due to the attention that COVID-19 is getting, there are many things that politicians are able to get away with. When the dust settles all this will matter. This is the fourth edition of ‘Learning by Proxy’
Politics
Using the distraction of COVID-19 as a cover, Pakistan took 1000’s of terrorists off their terror list. That list is an eyewash and does not mean much anyway. But still.
Pakistan has removed thousands of names from its terrorist watch list in what the country says is an effort to meet its obligations ahead of a new round of assessments by a global anti-money-laundering watchdog.
The so-called proscribed persons list, which is maintained by Pakistan’s National Counter Terrorism Authority, or NACTA, is intended in part to help financial institutions avoid doing business with or processing transactions of suspected terrorists.
https://www.wsj.com/articles/pakistan-removes-thousands-of-names-from-terrorist-watch-list-11587393001
The Donald
At the other end of the world, Trump is using the current situation to force a ban on immigration into the US. For now, he could only as far as to stop the issuance of any Green Card for the next 60 days.
A major category of people who are banned is those seeking green cards through a family member of an American — a parent, an adult child or a sibling.
The order temporarily bars green card holders from sponsoring a spouse or child for permanent residency.
It also stops individuals from receiving green cards to enter the U.S. through other means, such as employment or the EB-1 “extraordinary ability” category.
https://www.nbcnews.com/politics/white-house/trump-s-immigration-ban-raises-more-questions-answers-here-s-n1188946
Canada is rejoicing!
Economics
Power
One of the biggest problems that India has been faced with over the past couple of years has been – Electricity. And contrary to your expectation, we have too much of it. The electricity business has two players – Production companies and distribution companies (known as Discoms). Over the past 5 years, production has heavily ramped up in India with the addition of several renewable power plants. While production is centralised and easy to scale; distribution is a tricky business and there needs to be enough demand for the supply coming in. Setting up distribution in villages is not a profitable undertaking given that their consumption is low but the cost of infrastructure is high.
Anyway, more to the point. Distribution companies have contracts with producers to draw from them and pay a fixed price for the energy. At the same time, they depend on contracts that they have with large buyers – industries, to draw a certain amount from them. COVID-19 has triggered Force Majeure and they are not able to sell the power coming to them. Ironically, they stand powerless and losses are mounting.
Following the lockdown and revenue from a major chunk of industries and businesses—call them, milch cow—touching almost nil, discoms have been pushed to the brink. Forget clearing the past dues, going forward they won’t have money to pay for the power they buy for catering to essential services such as healthcare viz hospitals, isolation wards/quarantine facilities, ventilators and so on. Can discoms invoke force majeure to avoid making payment? That may not stand legal scrutiny.
https://www.financialexpress.com/opinion/corona-pushes-discoms-to-the-brink/1925283/
But light seems to be at the end of the tunnel
The Power ministry’s proposed amendments to the Electricity Act of 2003 have received a thumbs up from the industry with players welcoming the proposed push for cost-reflective tariff, simplification of tariff structure and reduction of cross-subsidies.
Companies and industry experts applauded the proposed amendments for creation of Electricity Contract Enforcement Authority with powers of the civil court, the single selection committee for appointments to the appellate tribunal and regulatory commissions and ensuring payment security mechanism in the sector.
https://energy.economictimes.indiatimes.com/news/power/power-industry-gives-thumbs-up-to-proposed-electricity-act-amendments/75285907
At the same time, questions are being asked if this situation can be used to pursue clean energy more effectively. They do not have the troubles that coal-powered plants face.
Oil
Also, do you know what happens when there is no more space left to store oil that is being produced?
#BREAKING US benchmark WTI #Oil price closes at -$37.63/barrel pic.twitter.com/y3ZKeCdPT0
— AFP news agency (@AFP) April 20, 2020
The world found out that even oil, yes oil; for which the US has turned the middle east into its national battleground, can end up selling at a negative price. Flights are not flying; Trains are not plying; Cars are not driving, and; the world is producing oil as if nothing has changed.
The consequences to this are quite political, this will be greatly destabilising to the middle east and all of the kingdoms that have been able to thrive because of the oil money. On the other hand, terror funding might see a decline.
Business
Disney
When the daughter of Roy Disney, the older brother of Walt and the Co-founder of ‘The Walt Disney Company’ skewers the company for laying off 100,000 workers while at the same time paying the top executives salaries and bonuses equivalent to USD 1.5 Billion, there has to be some soul searching that the Board needs to do. She says the 100,000 could have been paid for 3 months if the executive had avoided taking the salaries and bonuses. Bob Iger, Chairman of the Board received USD 62 Million in 2018. He could forego awards but instead decided to forego only the salary and not the bonus. She used the words – ‘What the F***?’ in the thread. Just incredible!
OK, I’ve been holding my tongue on the theory that a pandemic is no time to be calling people out on anything other than failing us in a public health sense. I thought it might be a moment for peace and reconciliation. But I feel a thread coming on….1/ https://t.co/G1mUq7RmAV
— Abigail Disney (@abigaildisney) April 21, 2020
Co-Working
Or how Masayoshi Son chose to squander the Vision Fund.
When the WeWork debacle let loose last year, the Indian entity that is run under franchise by the Embassy Group proudly proclaimed their plans were separate and they would make it though. Now it looks like they will make sure a few startups perish in the process.
Earlier this month, WeWork India, which is run by Bengaluru-based real estate company Embassy Group, said its existing customers need to pay only 30% of the rent throughout the lockdown period that started on March 25. But in reality, instead of allowing clients to pay just 30%, WeWork is offering to give a credit equivalent of 70% to their existing contracts.
This means that customers will have to continue paying the entire rent each month even though they are not using the space. At the end of the lockdown, WeWork will add extra days to their existing contracts equivalent to 70% of the rent for the days its offices remain shut.
https://qz.com/india/1837749/indian-startups-now-battle-both-wework-coronavirus-lockdown/
These guys have been in business long enough to know its all about the cash-flow. Giving me back 70% of the rent when my contract ends will do nothing for me. In the meantime, homegrown co-working players such as 91Springboards and BHIVE have waived the rent considering this a force majeure event.
Jio – Facebook
Earlier this month as rumours swirled, I had written a post about why Reliance needs Facebook to invest in Jio – Badly. Facebook tried bringing its Facebook basics service to India and was chased out of India as fast as it arrived. It was against the principles of net neutrality. By making certain services free, they can make users prefer one over the other and kill the competitors. Reliance was dying under a mountain of debt and their plans to sell 20% of Reliance to the Saudis also fell through. They needed a lifeline. Facebook needed a partner who can twist the law to its will, has political clout and enough penetration.
Match made in heaven.
“This investment by Facebook values Jio Platforms (at) Rs4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs70 to a US dollar),” RIL said in a statement. “This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India,” RIL said in a statement. “The investment values Jio Platforms amongst the top five listed companies in India by market capitalisation, within just three and a half years of the launch of commercial services.”
https://qz.com/india/1842729/facebook-invests-5-7-billion-in-mukesh-ambanis-reliance-jio/
So what is the problem you ask? Facebook owns WhatsApp and Jio owns the pipes. If you want to pay a bill in China, you turn to WeChat. If you want to buy a movie ticket in China you turn to WeChat. If you want to check the news in China, you turn to WeChat. iOS and Android do not matter in China because the Operating System of China is WeChat. Reliance and Facebook want to do something similar in India. It is sinister and diabolical.
Technology
Weather
Did you think the weather forecast was always shit? I always thought so. Well, it is going to get worse. Flights used to contribute a lot of data to help model weather patterns. Since flights have reduced drastically since the pandemic began, the data available has sharply declined. This may lead to worse weather forecasts.
Observations of temperature and wind routinely collected by commercial aircraft are routed to government weather agencies and other users around the world through the Aircraft Meteorological Data Relay (AMDAR) program, operated by the World Meteorological Organization.
The number of AMDAR reports has risen from about 7,000 per day in the early 1990s to more than 800,000 by 2017, according to a recent overview of forecast improvements published by the American Meteorological Society and led by Stanley Benjamin (NOAA Earth System Research Laboratory).
https://weather.com/health/coronavirus/news/2020-03-24-fewer-people-flying-might-affect-quality-weather-forecasts
Drones
I had written a blog last week about how new technology adoption will get accelerated in these times. Africa is leading the way with their homegrown drone startups getting a huge push.
In Ghana, rural health facilities send their coronavirus tests to the distribution centres. On Friday, Zipline ran four flights to Accra, transporting 51 COVID test samples and making each trip in under an hour. On Saturday, it started service to Kumasi. Now, Rinaudo says, the company is ramping up service, looking to deliver as many samples as needed every day.
In addition to shipping test-kit flights, Zipline is using drones to ferry unused tests, protective equipment like gloves and masks, and supplies including vaccines and cancer drugs from its distribution centres to the rural health facilities. The idea, Rinaudo says, is to make it easier for people to get what they need without going to a hospital, where they could be exposed to the coronavirus and take up scarce resources. The company is doing similar work in Rwanda.
https://www.wired.com/story/drones-flight-carry-covid-tests-labs-africa/
Misc
The space shuttle was the NASA workhorse that for years made ferrying the astronauts to the ISS possible. This came to an abrupt end when NASA retired the Shuttle in 2011 in the hope that United Launch Alliance backed by Boeing would deliver on the rocket that they were building. 10 years and several Billion dollars later, nothing has been delivered!
In the meantime, NASA has been totally dependant on Russia for any space transport. Especially of man and material to the ISS. Even during the Ukraine crisis, they were needed to go back to Russia! SpaceX is finally about to deliver; bringing the capability to launch a man into space back to the US.
At long last SpaceX will finally carry a human to space next month.
Signing off…
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