LandmarkPublicAffairs: Trust in the time of COVID-19

April 16, 2020 |

The fight against COVID-19 is all consuming, but opportunities are clear for those with thoughtful and agile Government Relations strategies

Yes, no one planned for this in their 2020 strategy. Yes, it is unprecedented. Yes, disruption to business and economies as we once knew them will be profound.

The reality is that the economic damage from COVID-19 is already inevitable. What is to come will need to be endured by us all. In many instances we will not be able to return to what once was. That in itself may be no bad thing. For those channelling their inner-Greta Thunberg to rage against “fairy tales of eternal economic growth,” COVID-19 is certainly the catalyst that will reshape some fundamental economic considerations and far sooner than Climate Change.

Establishing Command and Control

COVID-19 has undoubtedly upended economic and political priorities in many instances, but others remain constant. The parallel yet overlooked fight already ongoing is for the post-COVID-19 environment. Everywhere governments are working to occupy the positive space, to protect their legacy and ensure confidence in their institutions.

Not only will this help to determine future investments and the speed of economic recovery, it also determines their own license to operate. Demands for accountability in an ever more discerning and globally connected public will inevitably be answered in one forum or another. Trust and delivery of key services are key currency and good Government Relations may never be proven more important than right now.

Tunnel Vision

Across the world and almost overnight industries and economies have pivoted on their respective axes as a consequence of COVID-19. In turn, the stakeholder landscape for both business and government has experienced a tectonic shift, lurching several feet. With every-everyday matter now defined through the prism of public health stakeholders once integral to good government relations may now mean little, or could be the difference between solvency and sweeping retrenchments. This is all taking place in an environment in which resources and attention are scarce commodities for all.

This pinhole bandwidth is a defining feature of the COVID-19 crisis. Many businesses and sectors are scrambling to engage with new stakeholders whom they have not previously mapped or consulted. Many of these are unfamiliar with companies’ value, contributions, roles and requirements, nor do they have the time to familiarise themselves. Prior relationships may also offer few guarantees of support with the fortunes of some sectors determined by individual companies. It is not always fair or equal.

In a saga that continues to be played out in the media spotlight the opaque and poor management of COVID-19 cases by one cruise sector player has upended the goodwill and credibility established by countless other industry-leading players on a truly global scale. The consequence of this still threatens to devolve into a real humanitarian crisis for those awaiting repatriation without an urgent refresh in relations and governments’ willingness to listen.

All Politics is Local

The reality of the COVID-19 environment that companies are navigating is that it is not regional, nor even broadly international in its coordination. These are undeniably national campaigns in which sentiments are hyper-local and in many instances hyper-nationalised. We are already seeing instances of foreign players working to repulse policy ambushes driven by local rivals with an eye for opportunity.

With the fight now taking place in the proverbial trenches, sector or industry alliances through multi-lateral platforms and forums, previously a source of high-level strategic support, are demonstrably less effective. By no means is this unique, but few crises have altered the playing field in such absolute terms, nor so quickly. Those companies and organisations without established key stakeholder relationships and some form of ‘political credit’ already in the bank will invariably face tougher times.

Carry On

Indeed, COVID19’s near total news dominance has created a smokescreen. Behind this, political, trade and industry considerations continue to be executed. Trade nationalism also threatens to rise further at a time when the World Trade Organisation is already weakened. In parallel, free trade deals move inexorably forward. Amidst rolling lockdowns the Council of the EU provided final approval for the EU-Vietnam Free Trade Agreement on March 30. This will now go before Vietnam’s National Assembly in May. If approved, which is likely, implementation could be in June 2020.

Not only will this award the EU its second FTA in the region in as many as years, it comes into force as the world enters a global recession. Thailand and Indonesia, both in the process of negotiating their own respective EU FTAs are rapidly sinking into recessions of their own and are wary of Vietnam’s ascendancy. Both could respond by either embracing trade nationalism and drawing back or making far reaching compromises to the EU in order to expedite the conclusion of negotiations. The implications for trade partners are profound.

Looking to their own

The hyper-national nature of the COVID-19 response must also be taken in its proper context. Whereas institutional and societal ‘muscle memory’ remains from SARS in 2004 and the 1997 Asian Financial Crisis, some fundamentals remain unchanged. Across the region 80-90% of employers are still MSMEs or SMEs. Their capacities to withstand the coming economic downturn is already low and is certain to be exacerbated by pervasive, high levels of household debt in some of SE Asia’s leading economies.

This is seemingly borne out by the Asia-Pacific MSME Trade Coalition’s (AMTC) first pan-Asian SME survey, published last week. Close to 50% of businesses have only a month or less of cash reserves and nearly 30% expect to have to lay-off more than 50% of workers. SE Asian governments may also struggle to borrow bailout cash given their own high levels of external debt.

After all, Singapore’s touted reserves are an exception in the region. The World Bank has warned that 11 million in East Asia and the Pacific may be pushed into poverty by COVID-19. Oxfam now talks of half a billion globally. Whereas governments are attentive to the plight of industry and MNCs, they cannot afford to be myopic.

A time for agile and thoughtful engagement

Yet this reality also offers opportunities. Businesses able to offer governments strategic assistance that support current efforts and national recoveries will benefit in time. It requires an investment in which the returns may be distant, but are certain. Many governments in their efforts to combat COVID-19 have opened once closely guarded doors for consultation with companies in formulating their response and forward looking, sustainable policy. Big Business is already at the door. Other companies, seen as little more as a convenience last month may now find themselves as essential services able to command the attention of government and customers alike.

In this economic firestorm, sustaining thoughtful and agile Government Relations is key to the ability of both government and business to move swiftly and with certainty. This will undoubtedly determine the fortunes of many.

AUTHOR:
• Oliver J. Fall is Account Director for Landmark Public Affairs in Singapore. This article is based on comments he presented at the Lee Kuan Yew School of Public Policy on April 1.

Compliments of Landmark Public Affairs – a member of the EACCNY.