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Historical Origins of the French School of Economic Warfare

Gagliano Giuseppe

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] H [/yt_dropcap]istorically speaking, the promotion of intelligence culture in France has been required to clash with both a problematical and controversial linguistic orientation and a much deeper and more influential attitude: France’s inability or unwillingness to reason in terms of power, and therefore take a position on economic warfare one way or another.

This reticence may be explained by the fact that on more than one occasion in its relatively recent past France has had to ally with its enemy, in this way stripping the word “patriotism” of its meaning. Every time a group committed to the conquest of power allied with the enemy, the French lost faith in patriotic ideals. This happened with the succession of Louis XVIII after Napoleon in 1815, with the support given to Bismarck against the Commune Uprising in 1870, and with the collaboration with Nazi Germany during the Second World War. Also the Colonial Wars and the Cold War contributed to creating a certain disillusionment with patriotism, while the concept of power came to be considered purely as an act of domination at the same time. In any case, not betraying the ideals that lie at the basis of the history of the French Republic – from those underlying the French Revolution of 1789 to those of the Nazi-Fascist Resistance of 1945 (these latter inspired by an economic system of Keynesian inspiration), and not forgetting the spirit and dedication of men who, like General De Gaulle, interpreted national power as autonomy while providing prospects for the economy as well – means empowering a nation that is both strategic and a partner to the nation’s most vital parts at the same time. This is what the experts and supporters of business intelligence in France have been trying to accomplish for the last forty years.

The ‘70s: reticence and defensive action

It is not easy to determine the real date of birth of the tradition of French economic warfare. Even if today it might be ranked among the most prominent on the European continent, in fact, the negative connotations attributed by French culture to intelligence operations, which are unjustly associated with spying, the violation of privacy, and deceitful campaigns, conditioned it and limited its development for a long time. The comparison with the public information policies – defined as a “body of laws, regulations, directives, interpretations and sentences of law that direct and orient the information lifecycle, [which] includes the planning and creation, production, collection, distribution, and disclosure of information” – enacted by the United States government after the Second World War undoubtedly provided an important incentive for French public authorities, which towards the end of the ‘70s began to understand the need to fill the gap that risked seriously penalizing France in terms of national (political) independence and strategic autonomy (in the economic field). It would take more than a decade, however, in order for the imperative of competitiveness in global markets, necessary at corporate level, to be fully comprehended also by the public administration and to take form in an evident expansion of the range of action of government intervention. If up until that moment the management of information throughout its entire lifecycle had been finalized exclusively for the internal purposes of the various institutions, starting from the end of the ‘80s it began assuming central importance in defining the government’s economic policy and creating a fundamental “alliance” between the public and private sectors.

The first to realize the importance of the advantage held by the United States in the management of information for social and economic development, around the end of the 70s, were Serge Cacaly, on one hand, and Simon Nora and Alain Minc, on the other. The former, an information and communication science researcher, published two studies in 1977. One, emblematically entitled Le révolution documentaire aux États-Unis, emphasized the importance of recognizing information as the driving force behind progress as closely linked to extraordinary developments in computer science and its increasing advances in qualitatively and quantitatively analyzing documents on the other side of the Atlantic. Information, even if still masked by the skirmishes of the Cold War that preceded military and space research, was becoming the one most important sector on which world supremacy could be based.

In the wake of these studies, in 1978 the high functionary Nora and the younger political advisor Minc presented the President of the French Republic with the report entitled L’informatisation de la société, which for the first time, together with the acknowledgement of the United States’ ambition for world supremacy in science and technology based on information management, revealed the French fear of such domination and its potential impact on society and the control of power. It is symptomatic that this attitude transpires from a document of political orientation and here lies the origin of the French government action to stimulate the activities of collecting, processing, and distributing information. Nora and Minc, in fact, repeatedly emphasized the government’s role as the holder of a power of influence derived directly from the social contract and national unity based on guarantees, a power that must be applied also to the new technologies and the control of the same. Public intervention in the information field is therefore not only fundamental but even necessary for society in order to avoid the risk of domination concretely posed by US supremacy in the field of information. The words that the two authors used to express this concept are strong indeed: “[…] it is the entire future of the French-speaking world and the identity of France that is being placed at risk” . On the other hand, these considerations were supported by constant reference to real data: the number of computers imported (more than 80% of the entire fleet of French information technology equipment was produced by the USA), but above all the control of the reference databases (seven out of eleven databases controlled by the United States) . This latter element, in particular, is crucially important as databases are essential in economic, technical, scientific, and academic activities, because they are sites of conservation of information that can be accessed only under determined conditions and enable research also from far away. Real power does not come from merely knowing data and information but controlling it, with the possibility to manipulate and decide who else can do this as well. The fact that such power was left nearly exclusively in the hands of foreign powers was therefore deemed a highly alarming loss of sovereignty by Nora and Minc. Hence, these two authors proposed that the government take action and develop a vigorous policy in supporting research, forming a national industry in the information field, and developing telecommunications infrastructure, stimulating these activities from both the juridical and financial points of view.

Analyzing the government’s real situation in the moment that these proposals were made, or in other words, which public institutions were effectively involved in managing information, a fairly varied panorama is revealed. First of all, we see the INSEE (National Statistics and Economic Studies Institute), the nearly exclusive producer and distributor of statistical and economic data and the direct heir to a concept that stood at the origin of the modern state itself, when back in the 17th century, “statistics”, in other words “whatever regards the state”, began supplying an indispensible tool for the exercise of government. As regards instead the management of information on the international situation, every single government department handles the task by itself: the Defense Ministry’s Evaluation and Forecast Center, the Foreign Affairs Ministry’s Analysis and Forecast Center, the Ministry of Industry’s Observatory on Industrial Strategy, the General Commission on the Plan, International Information and Forecast Study Center, and the Ministry of the Economy’s Forecast Directorate. In any case, this picture only confirms what had already been confirmed above: a similar structure was destined exclusively to responding to the needs for information and analysis inside the administration. The comparison with the United States, where the distribution of the information collected by public and private organisms working in the sector in favor of the nation’s economic operators was a well-consolidated practice instead, and economic crises such as the oil crisis of the ‘70s would emphasize the need for imperative of competitiveness that the French government would no longer be able to ignore and that would bring it to modify its structures and methods of action in the information field. Information policy, which was still uncertain , consisted of a system that tended to privilege defensive actions more often than offensive actions, even if performed in the logic of national independence and strategic autonomy. The imperative need for competitiveness clearly revealed all the limits of an approach such as this one.

The ‘80s: the first change

The first attempts at a change of direction in government action were made in the ’80s in the system of aids given to companies: instead of interventions that privileged direct subsidies, a system of indirect aid based more on supporting innovation was adopted. Furthermore, whereas previously government aid was concentrated on the larger industrial groups, the new system was characterized by the shifting of importance to small-and-medium sized companies. These new methods of government intervention associated with the introduction in France of new business strategy tools destined to anticipate the changes in the environments finally succeeded in launching the diffusion of information culture, particularly in regard to scientific and technical information, which in the time of a decade would lead to the effective adoption of a business intelligence policy.

The French Ministry’s Evaluation and Forecast Center may be considered the party most responsible for this new partnership between the government and the nation’s businesses and the important stimulus given to information culture. Envisioned at the start of the 80s by the current Minister of Technology and Research on the model of the above-mentioned Defense Ministry’s Evaluation and Forecast Center and initially directed by Thierry Gaudin and Marcel Bayen, the CPE was dedicated to evaluating research, industrial strategies, and forecasts but above all to so-called “technological monitoring”. This term was rendered popular by Jacques Morin, a technology transfer consultant, to indicate a company function in support of real business activities that represented “[…] the testimony of the determination to supervise the technological business environment for strategic purposes and to identify the threats which – if intelligently anticipated – might even be transformed into opportunities for innovation. It also implies that an internal system of appropriate information exists for the exploitation of the results” .

Comparison with the United States, but also with Japan, where the culture of adapting company behavior to changes imposed from the outside is an integral part of the managerial mentality, continued to be in France’s disfavor. The nation’s delay was once again made clear, especially in regard to its scarce use of databases, which were considered merely as archives and not as active instruments of the monitoring function. Hope arose for the assignment of such function to highly specialized managers capable of developing a strategy, at the very least, as well as substantial information science development in the field of documentation. The environmental monitoring approach had already been anticipated by Humbert Lesca . It consisted in a systematic approach to the company’s openness to the regional, national, and international environment with the explicit intention, from the organization’s bottom to its top, of not being caught off guard by change and evolving along with it or even before it in the implementation of a structured device finalized to receiving the signals coming from outside. The monitoring, according to the definition provided by Lesca, would therefore be a “system by means of which the company scrutinizes its own ‘external’ surroundings and anticipates the changes, as far as possible, [transforming] the raw information it has on its environment into a form of business intelligence serving its own future.”

The Evaluation and Forecast Center was therefore actively committed to monitoring activity at national level and gathering information on the international scene regarding questions of scientific and technical interest, technological innovation, and the multinationals. The beneficiaries of this activity were, above all, a number of sectors deemed strategic, such as materials development, information technology, and biotechnologies. In addition to the development of these skills by itself and directly at the service of the Ministry of Research and Technology, this Center was also involved in distributing its studies and analyses in the private sector, especially to the advantage of consulting companies and other public actors. Its objective was to achieve independence, once again, from the US power that appeared threatening also in the context of strategic studies and monitoring operations, thanks to the spread and activities of its own consultancy companies. The institution halfway through the ’80s of the Aditech Association, the nerve center in the development of business intelligence in France, was the work of the Center’s directors for the purpose of facilitating this activity of external diffusion and the signing of contracts with companies in the private sector.

The famous Study No. 100 written by two experts, Bernard Nadoulek and Christian Harbulot, who made important contributions to the business intelligence in France, was published as part of Aditech research activity. The former was a professor of the French Karate Federation who had begun teaching martial arts at Club Montagne Sainte Geneviève in 1971, in addition to being acclaimed for publishing articles and books about the struggle against power and strategy (a subject on which he became a consultant in 1986), such as Du karaté à l’autonomie politique or Désobéissance civile et luttes autonomes. The latter was a close associate of his, a former Maoist militant and member of the same karate club with whom he signed articles entitled Le Conflit gradué and Affrontements de théâtre et verrou panaméricain. In particular, Christian Harbulot, who would fill the role of aggregating the three prevailing models of intelligence at the time – military, diplomatic, and police – establishing the unity of economic patriotism and society’s revolution through the notion of economic warfare for which business intelligence would serve as a vector. On the other hand, the term “economic warfare” is an expression that was often and willingly used also outside the restricted specialized field of business intelligence in those years, particularly by politicians. One example, Lettre à tous les français written by President François Mitterrand in 1988, even contains a section entitled “Le guerre économique mondiale” in which he emphasized the ferocity of competition between companies in the international market.

It is therefore L’intelligence stratégique that marked the real change of pace, at least in intentions, in the context of business intelligence in France, given that the instruments proposed by its two authors referred entirely to military strategy and ideological warfare. A change in terminology was suggested in order for the strategic actions of the companies and the state to be able to finally shift from a defensive position to authentic offensive action thanks to a new approach to competition based on the study of the dynamics of competitive behavior upon which to establish principles of action for company managers. Practically speaking, this study provided a key to interpretation and a functional method for the development of business strategy devised around three matrices directly inspired by combat techniques . The latter were: direct action on the situation and relationships of force, short-term business plan strategy; indirect action on the system, the protagonists, and relations, mid-term strategy that acts on the scenario in which the company seeks partnerships and alliances but also diversification in regard to competitors; taking anticipatory action on the context, on the rules of the game, and on the forces, and long-term strategy that is merely the business plan.

The ‘90s: the definitive consecration

The second half of the ‘80s had already given significant propulsion to the development of business intelligence in France thanks to the re-launching of a national policy in favor of the aforementioned scientific and technical information, which was further increased by the activity of its leading competitor nations: the United States and Japan. It was, however, the radical change of the international scenario , with the fall of communism, the end of the Cold War and the dynamics of the face-off between the two power blocks that had characterized the international – also economic – relations of the past forty years and the consequent dominance of the mechanics of globalization with its questioning of the autonomy and power of the national state, that led to the definitive consecration of business intelligence in France. The Martre Report, drafted by Philippe Baumard, Philippe Clerc and Christian Harbulot, among others, was the milestone. Published in February 1994, the report from the General Commission on the Plan defined business intelligence as follows: “the aggregate of the coordinated actions of research, processing, and distribution of information useful to economic operators for the purpose of capitalizing on the same. These various actions are conducted legally with all the guarantees of protection necessary for the conservation of the nation’s business heritage, in the best conditions of quality, time, and cost. Useful information is deemed that which requires various decision-making levels of in the company and the community for the development and coherent implementation of the strategy and tactics necessary to achieve determined objectives with the purpose of improving their positions in the context of the surrounding competition […]. The notion of business intelligence implies transcending the single actions designated with the terms of documentation, monitoring […], and the defense of the nation’s competitive heritage and influence […]” . In other words, business intelligence was defined as the chain of operations that range from the collection of useful information from open sources to the transmission of material to the governmental decision-makers assigned to the formulation of strategies for national defense and the reinforcement of the nation as a system, actively involving the private sector. Before presenting the tangible processes to be marshaled by the protagonists of business intelligence in France (the state, banks, companies, and other local agencies), the report summarized a number of previous studies that made comparisons with the business intelligence systems of other nations considered as models and that should inspire in certain ways the future French development in this sense. The United Kingdom and Sweden represented the two precursor nations. The former was the home of intelligence also from the lexical point of view, and there it is immediately understandable and its integration in any system political decision-making is natural. The latter, instead, was strong on the basis of a collective effort at national level and favored by its cultural homogeneity, for the construction of strategic information engineering in which public (university) and private (companies) institutions work together.

As regards Germany, Japan, and the United States, while the institution in the modern sense of business intelligence in the first two nations was traced back to the ‘30s and the presentation of the same reflected the content in large measure of the two works cited in the footnote, in the latter the more recent developments after the fall of communism and fervently desired by the Clinton administration were emphasized, and fervently desired by the Clinton administration, which by that point had made such an investment in economic security as to create an organization dedicated expressly to the purpose, the National Economic Council. France now has nothing to envy to these nations in terms of business intelligence, which in its own way benefits from a certain tradition and history. What has been lacking, however, is the passage to a collective and national information system. This has been hindered primarily by two factors mentioned previously but clearly and incontrovertibly illustrated in the report: firstly, the barrier existing between the administration and the companies, and secondly, a certain passivity in the actions of these latter, which were too often limited to technological monitoring in a defensive and protective sense.

The vocabulary adopted by the authors of the report addresses this second point in a decisive way. Based largely on the works of Christian Harbulot, the use of terms such as “offensive action”, “competitive aggression”, and “power relations”, indicates the hoped for and necessary evolution in the context of French business intelligence while shunning the use of the term “renseignement” due to its negative connotation that nearly always evokes dirty police practices. It is however restricted by the use of the concept of monitoring, which evokes an approach that is insufficiently dynamic that for as much as it is indispensible should also be supplemented by offensive actions in the field. As regards an action intended to overcome the limit represented by the first point, the authors themselves contributed to the construction of business intelligence and the formulation of these new elements of language and disclosed them to the public. One important example is a serious discussion dedicated to the theme “Business intelligence: information at the service of competitiveness” organized in Parliament in June, 1994, by ADIT with the presence of various representatives of the group of the General Commission on the Plan responsible for the drafting of the Martre Report, including Henri Martre himself, Jacques Villain, François Jakobiak, and Bruno Martinet .

A fundamental role was also played by the work begun at the end of 1994 by Philippe Caduc at ADIT and Rémy Pautrat at the SGDN (National Defense Secretary General) with the idea of transforming business intelligence into an object of public intervention. Pautrat, in particular, a former director of the Directorate of Territorial Monitoring and Prefect, attempted to effectively implement his vision of an administration at the service of the companies, given that his objective to create a National coordination structure was inspired by the model of operation of the United States National Economic Council. In the opinion of Pautrat, the efficiency of the state as the producer of data, analyses, and strategies depends on the depth of its awareness of the needs of its industries. For such purpose, together with the ADIT Director, he drafted an action plan composed of ten priority actions, ten new proposals to be added to the four made by the General Commission on the Plan , taking into consideration the international scenario and the development of Internet with greater awareness. In addition to re-appropriating a national approach that for various reasons had been neglected, the other actions proposed by the two experts regarded education and training. These included the institution of organizations ad hoc; the already repeatedly invoked creation of national databases to be marshaled against those managed by competitor nations in order to provide French companies with real knowledge of the sectors in which they operate and information on their competitiveness in foreign markets; and the development of skill centers specialized in Internet technologies, in light of its growing importance. They also included the presence of France in the international moments of standardization in this field, with a similar presence through key roles at the most important international organizations and two research efforts – one that recognized the sources available and their methods of diffusion in the United States and Japan, the other a list of foreign experts in the subject who had lived in France – both innovative and strategic in the sense of possibly anticipating the moves of competitor nations, and consequently, offensive and not merely defensive actions. The coordination of this action plan was entrusted to the CCSE (Committee for Economic Security and Competitiveness), an inter-ministerial structure open to qualified external experts so fervently desired by Pautrat and set up with an agreement signed on February 1st, 1995.

It is above all in the world of education and training, a fundamental field of action indicated in both the Martre Report and the CCSE action plan that concrete developments were made in the second half of the 90s. In order to respond to the new need for specialists capable of integrating business intelligence into company administration processes, thus enabling the challenges posed by global competition and the information society to be faced as protagonists, following a period of support provided from training centers more specialized in the organization of seminars, conferences, and specialization courses, as of 1995 many faculties of economy and commerce and polytechnic schools began providing specialization courses in “business intelligence” and graduate courses in Business Economics and Company Administration. One example is the CESD (Strategic Defense Studies Center) instituted at the University of Marne-la-Vallée for the purpose of promoting the study and research in business intelligence and creating a crucible of ideas regarding defense and security in modern society.

This process led to the establishment of a School of Economic Warfare at the Higher School of Applied Business Sciences in Paris by Christian Harbulot and the former director of EIREL (the Inter-force School of Intelligence and Linguistic Studies) in Strasburg, general Jean Pichot-Duclos, in 1997. For Harbulot, the creation of this school filled two specific needs: the study in greater detail and depth of the dynamics underlying the relationships between economic forces, and the civil applications of information warfare, given that the latter notion was absent from the strategic planning of the companies, administrations and local authorities. The people trained by this school, approximately seven-hundred students since its creation, would become “experts in the management of information and power relations”. Parallel to this development in the educational world and as a direct consequence of the same, publications and research on the subject have increased in the last twenty years. In the world of publication, two aspects were manifested at nearly the same time: a notable increase in the production of French business intelligence as of 1995, with the creation of ad hoc series by the nation’s leading publishers (such as the “Culture du renseignement” series published since 1999 by Harmattan) and a decline in the publication of books written by foreigners on the subject. From the academic point of view, in the past twenty years many Master’s/PhD degree theses have been dedicated to a topic that is interdisciplinary by nature because it embraces subjects that range from history to political science, from law to economic science, and naturally, to information technology and communication. The analysis of this academic production reveals the progress of what might be considered, and what we have tried to represent with this contribution, as a truly and specifically French school of business intelligence.

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Conversion of Local Business into E-Business by Effective Use of Social Media

Ahsan Siraj

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The spread of coronavirus (Covid-19) has affected almost all areas of life. The whole world is facing a crisis because of this pandemic issue. A lot of people have lost their jobs and many are struggling to survive in this situation. All businesses whether working at a large scale or a small scale are facing problems due to the unavailability to resources to operate businesses successfully. The developed countries are somehow managing this situation because of the successful implementation of online businesses from a long-time period. So, for those countries both customers and businesses are relatively ok with the situation by not going in the markets to buy things and place orders online and get it delivered at the doorsteps easily.

Whereas many developing countries like Pakistan have certain barriers in the full acceptance of e-business offered by the local and international companies. As per many studies on this topic, there are a lot of factors that pose hindrances in full acceptance of e-commerce in Pakistan. However, there is one thing worth mentioning that these hindering factors are related to all stakeholders. A few of those factors include insufficient technological resources, Government Policies, legal issues, social acceptability of the online shopping trend because of trust issue between companies and customers whether in terms of provided customer information at online shopping platforms, payment security, or the difference in shown and finally delivered product at customers doorstep, etc. But there has been seen a change in this trend in a couple of years with the development of the telecommunication industry. As most of the people now days have internet access at their places and are following social trends all around the world. So, the trend on online shopping from official brand stores’ websites has developed rapidly due to the trust of customers in brands’ shown and delivered products on their official online websites. But as far as local businesses and third party online shopping websites are concerned they are still a certain group of people consider taking a chance to shop online.

    In the pandemic situation, as all the markets were closed due to the lockdown in the country, everyone was worried about the situation whether a businessman or a customer. In this crucial time of survival, there has developed a new trend of conversion of local businesses into e-businesses by using social media effectively. Here are those businesses are under discussion who are owned by the people who are not mostly educated enough to know the value of effective use of social media or those people who even being educated at a certain level didn’t think before that they can utilize social media for their businesses to operate when everything was closed. Talking about the customers who were conscious about all the factors of trust and all before were just considering one thing and that was the availability of their desired products at their doorstep in their required time frame. Somehow, like big brands and businesses, many small businesses managed it quite well and provided online shopping facilities to the customers.

In the period of locked down, these small local businesses used social media i.e. Facebook, Instagram, what’s app, LinkedIn, etc. to display their products online offering discounted prices and free home delivery. This step not only provided them the opportunity to earn money in the time of crisis but also put the foundation of new trends in online shopping i.e. the acceptability of online shopping in the society even in the smaller and backward areas of Pakistan. We hope that this conversion of local businesses into e-businesses will continue to flourish successfully in the future and the acceptability of online shopping in Pakistan will grow over time. Here, in the end, one thing that matters is that all the stakeholders should play their effective role in this growth especially the Government should make policies to support the effective implementation of online business trends in Pakistan.    

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Impact of COVID-19 On Somalia’s Economy: Will the virus be a springboard to severe crisis?

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The COVID-19 pandemic imposed unprecedented challenges to global health systems and economies and transferred to Somalia one of the poorest and susceptible to crisis economies of the world. The economy of Somalia was already severing due to structural deficiencies and lack of unity. The federal-level economic institution such as the ministry of finance, ministry of trade, and central bank are mainly residing in Moqdisho and have no capacity to extend their services to other regions. The central bank is not yet ready to function properly. It does not have the capacity to innovate suitable economic policies to stabilize the country’s currency value, prevent hyperinflation, and keep unemployment lower. In addition, the nation’s taxation procedures and revenue collection policies are not unitary. The regional states have autonomous economic and political institutions with different taxation and revenue maximation policies. In terms of employment, the state employs to a small fraction of the nation’s labor force compared to the private sector. Therefore, considering all these facts one may conclude state plays a negligible role in the economic activities of the country.

The nation’s economy has been massively relying on foreign aid, remittance revenues, and import. The budget of the federal government and running costs are mainly financed through budget supports and other forms of assistance from donors. Almost every Somali household receives income from her overseas family member, especially Europe and the USA. Hence, remittance revenue is the lifeblood of the Somali household’s economy. On the other hand, Somalia is one of the countries with the largest trade deficit in the world, imports extremely surpass over exports. Since the livestock industry, the nation’s export backbone has been blemished by continual export bans from Saudi Arabia, the nation ended up an entirely import-dependent economy.

The foreign aid, remittance revenues, and import are not reliable sectors because they are prone to global shocks such as political clashes, trade wars, and pandemics. For instance, COVID-19 pandemic adversely affected Somali remittance firms. The Somali remittance firms source funds from western countries where COVID-19 is massively damaged both human and economic. These countries have been executing a complete lockdown to fight against and attenuate the spread of the virus among the community. The business, schools, universities, and public transportations were completely closed. So, this instigated Somali immigrants in Canada, the USA, and EU countries to lose their jobs and not able to send money back home. Remarkably, Somali immigrants in Europe and the USA are one of the highest deadly effected diasporas by COVID-19.

The World Bank estimates show that Somalia receives nearly US$1.4 billion remittance annually which contribute 23% of the nation’s GDP. Although Somali remittance firms in western countries have been victimized by money laundering and terrorism involvement allegations, however, still remain dominant in the nation’s basic financial service and recently annexed to banking and real estate. The lockdowns in western countries due to COVID-19 have reduced the smooth follow of remittance funds and this may have a deleterious effect on household’s livelihood, families may not able to pay utility expenses. The reduction of remittance funds means people will have no cash to buy things and small business which employ a significant share of the nation’s formal and informal workers will face critical financial crisis.

Most affected areas

It is very difficult to capture the impact of COVID-19 on economy like Somalia where financial data is hardly available in public. However, the World Bank expressed concern that the pandemic may reverse decades of economic progress and poverty alleviation in the world’s poorest regions like Sub-Saharan African countries. World Bank recently estimates projects that the Sub-Sahara region could lose around $79 billion in output in 2020. In fact, Somalia will be one of the highly affected states in the region. Somalia could not impose a complete lockdown strategy, but schools, universities, local and international flights have been closed. The Khat or Qat (stimulant and flowering plant native to East African and Arabian Peninsula) import was temporarily banned.

The education sector of Somalia which is 95% private has been extremely devastated by Corona Virus (Covid-19). The primary, intermediate, and secondary school teachers have lost their salaries since tuition fees are paid monthly. The Madarasa (Koranic School) teachers also have lost their jobs and the lives of their families are endangered to die for hunger and underfeeding. There are no safety packages, food, and cash distribution to ameliorate the deteriorating economic situation of Somali teachers.

The Federal government of Somalia has banned the import of Khat in a bid to reduce the spread of Corona Virus across borders with neighboring countries, this sends a paroxysm of anger and frustration to thousands Khat traders, and street based Khat small business. The Khat is a paradoxical business, on one hand, it employs a significant share of the nation’s informal workers, and it is the only source of income for many destitute and vulnerable families like internally displaced families, and widowed women with children. It is also the mainstay of the government’s source of tax revenue. On the other hand, anti-Khat campaigners argue that Khat drains the economy and destroys the family. In fact, the ban of Khat import policy immediately impoverished thousands of families whose livelihood depends on directly or indirectly to Khat business. The government has not yet come up with any initiative to refurbish the lives of these hopeless families and workers.

The health impact of COVID-19 on Somalia is not as nasty as predicted and expected. Somalia has confirmed only 2944 cases and 90 death cases so far, although the testing rate is very limited and some of the fatuous test result cases were reported in the media. However, a country like Somalia where social protection programs, unemployment insurance benefits, and other welfare schemes are not even in the dictionary of the society deep economic downtown is imminent and unavoidable amid COVID-19 pandemic. As long as the 23% of the GDP of the country is remittance revenues from the west so any possibility of second wave pandemic that can outburst and prolong lockdown in western countries will have a catastrophic short- and long-term impact on Somali Economy.

 China is the Africa’s main trade partner, especially Somalia’s business community extremely depend on Chinese markets. The full lockdown on Chinese economy and ban of international flights significantly reduced imports from china to Somalia. This skyrocketed the most of food and basic stuff prices. Somalia cansimply face food insecurity, if second wave of COVID-19 hits China again and Chinese officials prolong lockdown period. By the time I’m writing this opinion essay, china is struggling a new swine flu virus. This is not only bad news to Chinese economy but also to Somali economy.

Possible options for economy refurbishment  

COVID-19 pandemic presenting aberrant challenge to the Somali Economy amid Somalia is expecting full debt relief from the international creditors. The debt relief program will enable the country to get developmental aid, and non-concessional loans. The government should speed up the debt relief program to get loans and developmental aid to improve the lives of citizens impoverished by the COVID-19 pandemic.

The government should consult with individual donors and international financial institutions to design the kind of foreign assistance Somalia needs for economic recovery in the post-COVID-19 pandemic era. The government should allocate a significant amount of foreign assistance it received to income generation projects for internally displaced people (IDP). The government cooperating with local business communities and international NGOs should set food distribution packages to vulnerable workers such as teachers, unskilled construction workers, widowed women with children, Kat workers, and so on.

Policymakers should direct international NGOs to implement small business development and income generation projects in villages, districts, and regions where poor and susceptible communities are inhabited.

The government in partnership with international donors and local investment banks should prepare soft loans and investment mechanisms suitable to poor farmers to promote local production efficiency. Small business development, fishing and agriculture, training and skill development, and empowering women and poor farmers oriented international and local projects will lead to favorable economic growth in the post-pandemic era.

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Transformation of E-Commerce Businesses and their Future after COVID-19

Ehtisham Ali

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World has witnessed an unprecedented human destruction caused by Covid-19.As on 7th July 2020, the virus has taken 533,780 lives and 11,419,529 have been tested positive worldwide. It started in December 2019 when Wuhan Municipal Health Commission China reported cluster of pneumonia cases which was eventually identified as novel coronavirus. On 5th January 2020, World Health Organization (WHO) made a flagship technical publication for Global Media as well as scientific and health communities on the first ever aperture on disease outbreak of new virus. Later on WHO declared health emergency worldwide and issued public health advisory when a large number of cases were reported outside China.

Subsequently, governments across the globe started taking precautionary measures to contain the infection rate which included lockdowns, border restrictions and even economic activities were strictly restricted. People themselves started opting for social distancing to avoid potential contagion and physical proximity. On the one hand this strategy has proved as the best measure to reduce the rate of infection but on the other, due to minimal economic activities, economies of many countries have been badly affected. Barring essential businesses like food and grocery etc., every other business got effected. Thousands of traditional style businesses and companies were severely affected and lot of them even went bankrupt.

In these circumstances, E-Commerce appeared as a promising major pillar in fight againstCOVID-19 as it helped reduce the rate of infection by offering online delivery of commodities and services. Supermarkets started online delivery of groceries by providing door-to-door services to their customers, preventing risks of in-store visits and subsequently online payments obviated in-person cash transactions.

Moreover, E-Commerce helped economies in preserving jobs during crisis. Online businesses strived to maintain the basic revenue stream which helped them to get their businesses afloat through the crisis. Restaurants and famous food chains started offering online takeout services. Almost all famous brands of clothing, shoes and many others, transformed their business from traditional to online.

Many companies changed the nature of their businesses and were successful in creating new jobs as consumers shifted towards online offerings. Recently a Dubai based raw coffee supply company transformed its business from B2B to B2C due to emerging demand of consumer products.

Interestingly many new small level ventures were set up during this period. People started delivering homemade food and home grown fruits and vegetables to meet the needs at both ends and the response from their customers is most encouraging. These continued availability of consumer goods helped the governments to increase the acceptance of persistent physical social distancing measures among masses.

Lockdown orders will definitely be lifted eventually but there are thousands and millions of customers whose patterns of purchase have changed drastically for a more comfortable way of getting what you need at your doorstep. They are comfortable with the online system not only for their convenience but also for getting into any risk of catching the virus. According to a recent survey on social media, young consumers are more motivated than ever to maintain social distancing and shop online while staying at home. This trend is creating ideal market conditions and great motivation for newly entrant digital entrepreneurs.

The trend of changing customers’ buying habits and behavior is an opportunity for digital entrepreneurs. Now how they react,it is the future of e-commerce that will be the deciding factor. Once the situation improves, sales of E-Commerce industry may stabilize at low growth rate than today but the changing behavior of customers is already in action to overall change the retail and commerce for years to come.  

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