Paving the way for an inclusive recovery

IN THE midst of the Covid-19 crisis, it is tempting to believe that life will return to normal - just as soon as we contain the disease. The truth is that 'normal' may not be too different from our current reality.

There is no denying that the immediate human impact of Covid-19 is devastating, with some 390,000 deaths and more than 6.5 million cases to date globally. However, with the economic and financial impacts just starting to bite, it is clear that the long tail effects of this crisis will leave few of us unscathed. Asia is facing an estimated income loss of US$211 billion which could drive at least 11 million people into poverty. We risk undoing years of progress on poverty reduction in the region.

Covid-19 may only be a warm-up act for what's to come. With an increasing frequency of black swan events in the future and the growing interdependence of our global community, it is imperative that we collectively shape a 'new normal' that is better able to cope with disruption.

Leveraging the power of finance

As governments work to contain the outbreak, the current crisis underscores the essential work of the social investment community - from foundations to impact funds to corporates. Now, more than ever, the world requires all types and sources of capital to tackle its most pressing problems. Solutions will require cooperation and coordination from a range of global leaders, both public and private.

Social investors are able to rapidly mobilise capital, anchor public-private collaboration and take risks that others cannot afford. Right now, there is an urgent need for this unique group to step up and protect the most vulnerable communities in Asia.

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I believe there are three actions that social investors can take to pave the way for an equitable and inclusive recovery.

Unlikely partnerships

Collaboration between capital providers in Asia has thus far tended to be transient - partnerships are often rigidly structured and bound by standalone projects. Over the last few months, however, funders and resource providers have proven that traditional silos can be overcome to create a multiplier effect where each dollar works harder.

In the Philippines, "Project Ugnayan" represents the largest private-sector-led fundraising initiative in response to Covid-19. A coalition of top businesses - from diversified conglomerate Ayala Corporation to fast-food chain Jollibee to television network ABS-CBN - raised 1.62 billion pesos (S$45.5 million) to feed over 7.6 million people from the poorest communities in Greater Metro Manila.

In India, corporate and family foundations - including The Bill and Melinda Gates Foundation, Temasek Foundation and Raintree Family Office - are leveraging their philanthropic muscle by promptly providing testing kits, face masks and financial support to the poorest communities in Bihar and Uttar Pradesh.

We are also seeing the emergence of cross-sectoral partnerships. Private technical experts, like the International Innovations Corps (IIC), are partnering India's Ministry of Health and Family Welfare to build progressive policies that integrate artificial intelligence into public health to address challenges around scarce human resources and inadequate infrastructure.

Technological innovation

Perhaps one of the only upsides to the current situation is the rapid roll-out of technological solutions. We have seen governments deploy a myriad of digital tools for disease monitoring, containment, and diagnosis. And thousands of businesses and schools pivot to a totally virtual environment.

These kinds of technologies can revolutionise the design and delivery of public services, especially for remote communities in Asia. In Indonesia, J-PAL, the 2019 Nobel Prize laureate recognised for their experimental approach to alleviating global poverty, is working with the Ministry of National Development and Planning to analyse how Covid-19 is affecting individual welfare, thereby helping the government to formulate appropriate financial assistance packages.

On a regional scale, the World Bank partnered AVPN to virtually convene policy makers and social sector agencies across seven countries in Asia to discuss and share learnings from the move to online education and its impact on low income communities.

It is crucial that we continue pushing digital transformation and seek to close the digital divide.

Systemic change requires collective impact

To truly bounce back stronger, however, we need to adopt a holistic view of the issues we seek to address. This not only means understanding the dynamics and interdependencies at play but also identifying solutions that fundamentally change policies, processes, power structures, as well as deeply held values and norms.

In this context, coming out stronger from Covid-19 means eradicating inequalities and building resilience on a collective level rather than finding the cure to the virus alone.

When the India Climate Collaborative (ICC) - a first-ever collective response from the country's top philanthropists - launched at the start of this decade, it could not have known how timely its presence was. While it primarily aims to catalyse climate action through collective investment and knowledge sharing, ICC has the structure in place to tap its network of donors, research experts, and local municipalities to build an inclusive and green marketplace in a post-Covid-19 India. Lessons from the pandemic will help ICC create livelihood opportunities that strengthen economic security and climate resilience amid shrinking resources.

Numerous impact funds in Asia are putting this ethos into practice by leading the charge in ensuring that their investees are putting their employees' welfare first. Not only are funds like Omnivore resorting to reduction in salaries at the top management to retain employees across the board, but others like KOIS have set up emergency funds for investees while LeapFrog Investments is going one step further by supporting vulnerable local communities through their investee companies which are on the frontlines. One such investee company is BIMA, an award-winning telemedicine company, which has increased its telemedicine provisions across Asia by 200 per cent. Nonetheless, it awaits to be seen whether investor practices will return to 'business-as-usual' after the pandemic or encourage enduring change in the way investors partner companies to create lasting impact.

A time of crisis is a time to step up

This crisis represents a real leadership moment for social investors - AVPN members alone have committed more than US$10 billion to the cause. But there is still a lot more work to do to shape the way in which we come out of this.

For those who are just embarking on the journey, I would encourage you to align your investments with the long-term recovery and resilience-building efforts, push the frontiers of technological innovation, and above all, tap collaborative networks that enable you to pool resources and achieve impact at scale. At the AVPN Virtual Conference next week, from June 8 to 12, our members will share best practices and frameworks to help others navigate these uncharted waters.

We are all in this together. We are all social investors now.