Global affairs are in an unstable state, with escalating tensions in the middle east and major economies waging trade wars with each other. Economic growth is slowing globally and Hong Kong has entered a recession after months of street protests and destruction of public property. As we enter into a new decade, things are not looking too bright.
Global Elections
UK just had their elections last month with a sweeping Tory victory, winning the largest majority in decades. This gives the parliament the much needed votes to navigate through the Brexit deadlock that has plagued them for so long.
Following the UK elections, Taiwan, Singapore, Hong Kong (LegCo) and the US will hold elections as well. In particular, the Taiwan elections could be a major watching point. The unrest in Hong Kong has strengthened the DPP’s hand and increased their popularity with voters. Regardless of a DPP/KMT victory, China-Taiwan relations are likely to remain frosty.
I am predicting a win for the DPP given the outcry against the one country two systems policy. Nothing is for certain, especially in this era where voters choose Donald Trump and Brexit.
(Update 14/1/2020) : DPP won the 2020 election, with higher voter turnout and a total of 57% of the votes compared to 38% won by KMT.
US Elections
It is currently too early to predict the outcome of the US election, with the democrats yet to nominate their presidential candidate and the impeachment against the president yet to conclude. From a statistical viewpoint, it is unlikely that the Senate will convict the president unless there is new evidence which sufficiently turns public sentiment against the president.
Personally, I wish for peaceful co-existence for all and avoid aggression and conflict if possible. There are no winners in a war, the destruction and damage extends beyond just death tolls and the economy. Well maybe with MIC, there is a winner but that’s a whole other can of worms I rather not open.
Unicorns?
I never really understood these tech giant startup business models. Sure, by stuffing them with VC cash enough to keep a high burn rate whilst grabbing market share may help to squeeze out every other competitor but can they really generate profits in the future? Not everyone can be Amazon but certainly nobody wants to end up like WeWork. Speaking of WeWork, a book is being written on the entire saga of WeWork’s failed ipo and large bloated valuation. I will definitely add that to my reading list.
Ride sharing and food delivery companies operate on similar business models like WeWork and Uber. They too face the same problems of garnering sufficient users and gaining enough economies of scale to one day be profitable. Given their track record of losses even after numerous years of being in operations, it is hard to imagine if they can remain solvent in the future. Read: here, here and here.
India’s Telecommunications Industry
Disclaimer: Being a minor shareholder of Singtel, it is in my interest to see Bharti Airtel doing well. The $13B penalties of the long dragged out court case over the definition of “adjusted gross revenue” being imposed on Airtel and Vodafone is surprising, given that this move will most likely bankrupt either one or both of the incumbents and leave the entire industry a monopoly dominated by Reliance Jio, which has a much smaller penalty imposed given it’s later entry into the business.
The problem is further exacerbated with occasional government imposed internet shutdowns( read: Why India shuts down the internet more than any other democracy). Can I even describe this as occasional when the figure exceeds 90 in 2019? Every hour of shutdown means millions of rupees in lost revenue for the telecom operators. Although there is promise of potential growth existing in the country, ease of conducting business doesn’t seem too attractive.
Fighting a price war whilst having to pay high fees to the government for access to the airwave spectrum makes it hard for operators to make profits. These low prices do not seem sustainable, being one of the lowest ARPU in the world while consuming on of the largest amounts of data monthly. Should the industry consolidate further into a duopoly or monopoly, prices are likely to be raised in a bid to become profitable.
Boeing 737 Max
As an engineering student, it is heartbreaking to hear the news of 2 fatal crashes of the 737 max in 2019. We are taught in the very first year not to compromise on ethics for profits. As news of more problems of the 737 max are being reported, it is worrying to see the industry sacrificing passenger safety for cost savings and higher profit margins.
There is no price tag on human lives. We have been through numerous avoidable disasters like the Bhopal and Challenger incidents, valuable lessons can be learnt to ensure that such events do not occur again. However, history tends to repeat itself in cycles and the 737 tragedy unfortunately becomes yet another case study for engineering students.
(Update 14/1/2020): In an unrelated incident, a passenger aircraft was shot down last week with no survivors. The official investigation report has yet to be published although Iran has acknowledged that the plane was downed by their SAM. Air travel is one of the safest mode of transport in terms of number of fatalities per distance traveled given the emphasis on safety regulations. You will be less likely to die in a plane crash than a car crash or train accident. That being said, the probability of those deaths being attributed to a missile strike definitely does not favor air travel.