EASING RESTRICTIONS…CAUTIOUSLY…!

GROUP CRISIS MANAGEMENT BRIEFING

Coronavirus COVID-19 BRIEFING #12 Group CMT Briefing 22 APRIL 2020 BRIEFINGS BY WHO Highlights of WHO Briefings since CMT Call#11: 3 vaccines have already started clinical trials, more than 70 others are in development.

• COVID-19 is a new disease, and this is the first pandemic caused by a coronavirus.

• Lockdowns can help to take the heat out of a country's epidemic but they cannot end it alone. Countries must now ensure they can detect, test, isolate and care for every case and trace every contact. There is no doubt that certainly the lock-downs have had a major impact on social, economic and also the delivery of other health services. Health services themselves and health systems and whole hospitals have become overwhelmed.

• WHO is not only fighting COVID-19. We’re also working to address polio, measles, malaria, Ebola, HIV, tuberculosis, malnutrition, cancer, diabetes, mental health and many other diseases and conditions.

• There are more than 1.5 million enrolments in WHO’s online courses through Open WHO, and we will continue to expand this platform to train many more millions so we can fight COVID effectively.

• As a result of [the 13 ASEAN-plus-three nations’] experience with SARS and avian influenza, these countries have put in place measures and systems that are now helping them to detect and respond to COVID-19.

• More than 90 countries have joined or have expressed interest in joining the Solidarity Trial, and more than 900 patients have now been enrolled, to evaluate the safety and efficacy of four drugs and drug combinations.

• WHO has convened groups of clinicians to look at the impact of…anti-inflammatory drugs on treatment outcomes.

• Last week I announced the United Nations Supply Chain Task Force, to scale up the distribution of essential medical equipment...the first United Nations Solidarity Flight took off, transporting personal protective equipment, ventilators and lab supplies to many countries across Africa.

• WHO has been working closely with the World Food Programme to deliver masks, goggles, test kits, face shields and other medical equipment to 40 countries.

• The Solidarity Response Fund has now generated almost US$150 million from 240,000 individuals and organizations.

[If you wish to donate to WHO, follow this Link.] • Coronavirus COVID-19 Group CMT Briefing 2 GLOBAL STATUS REPORT 22 April 2020

Statistics Top 20 (out of 210 countries & territories affected)

Country Confirmed Deaths Recovered Critical Confirmed Cases 2,557,926 USA 819,175 45,343 82,973 14,016 +632,596 cases since 14 April Spain 204,178 21,282 82,514 7,705 Italy 183,957 24,648 51,600 2,471 Deaths 177,688 France 158,050 20,796 39,181 5,433 Germany 148,453 5,086 99,400 2,908 =6.9% of all confirmed cases United Kingdom 129,044 17,337 - 1,559 Turkey 95,591 2,259 14,918 1,865 Critical Condition 57,272 Iran 84,802 5,297 60,965 3,357 =2.2% of all confirmed cases China 82,788 4,632 77,151 78 Russia 52,763 456 3,873 700 Mild Condition 1,627,631 Brazil 43,368 2,761 24,325 8,318 Belgium 40,956 5,998 9,002 1,079 Canada 38,422 1,834 13,188 557 Recovered & Discharged 695,335 Netherlands 34,134 3,916 - 1,087 Switzerland 28,063 1,478 19,400 386 Portugal 21,379 762 917 213 India 20,111 645 3,975 - Peru 17,837 484 6,982 380 16,040 730 9,233 315 Coronavirus COVID-19 Ireland Group CMT Briefing Sweden 15,322 1,765 550 515 3 87% 94% 86% 92% 3 7-DAY ROLLING AVERAGE OF CONFIRMED CASES Asia Europe

Middle East Africa

Coronavirus COVID-19 Group CMT Briefing 5 7-DAY ROLLING AVERAGE OF CONFIRMED CASES North Australia & America New Zealand

Latin America

Coronavirus COVID-19 Group CMT Briefing 6 IN THE NEWS… - The Governments of Germany, South Korea, Taiwan, Iceland, [and New Zeeland] got it right. Here's how. - More than three billion people live in countries whose borders are now totally closed to nonresidents; 93% live in countries that have imposed new limits on entry because of the coronavirus. - Hydroxychloroquine has not been shown to have antiviral effects in humans, though a laboratory study. United States & Canada • Trump’s move to cut funding for W.H.O. draws dismay, criticism and skepticism • Business executives told President Trump on a conference call that much wider testing is needed before reopening the economy. They said they were worried about huge lawsuits if workers were called back too soon and became infected on the job. • US weekly jobless claims hit 5.2 million, wiping out all jobs created since the Great Recession (2007-09) in just 4 weeks, totaling 22.03 million. • On 12 April, Fauci floated the concept of a “rolling reentry,” i.e. areas with fewer cases are easier to track and quarantine will be able to resume normal life sooner. • 3 Southern states will begin to ease coronavirus lockdowns, Georgia, Tennessee and South Carolina have announced plans to ease lockdowns. • Cuomo says data indicates that New York has passed the high point of coronavirus infection. • The Illinois governor extended the school closures through the end of the school year, but didn't comment on the stay at home order being extended. • Lawmakers and the White House agreed on nearly $484 billion in new aid for small businesses. Small business loans are flowing to construction companies. • Over 9,000 health care workers have contracted the virus, the C.D.C. says. • Democrats call for tougher financial regulation. • Pressed to reopen, governors say their states need more time and more testing. California addressed strategies for reopening the state. • Coronavirus enters the courts, with cases involving abortion, churches and cruises. • Face masks may be 'new normal' in post-virus life as U.S. prepares gradual reopening. • Last week's report showed that people in industries even outside leisure, service, the arts, and restaurants had started filing unemployment claims — filings were also seen in the manufacturing, healthcare, construction, transportation, and warehousing sectors. • The $349 billion lending program for small businesses has run out of funds. • Reopening the country will not be "game over" on avoiding risks, Fauci says. • PM Trudeau says Canada will be 'very, very careful' about lifting COVID-19 restrictions. • Non-medical masks to be mandatory for all Canadian air travellers. Coronavirus COVID-19 • United Airlines lost more than $2 billion in the first quarter Group CMT Briefing • NPR cuts executive pay as corporate sponsors’ payments fall. 7 • Hertz, one of the world’s largest car rental companies, said on Monday that it had decided to terminate 10,000 employees in North America IN THE NEWS… Asia • China’s economy shrinks, ending nearly half a century of continuous growth. • The World Bank expects covid-19 to push up to 11m Asians into poverty • China backs unproven treatments for covid-19. Wuhan city officials said they have revised the coronavirus death toll on Friday and added 1,290 new deaths. • Japanese workers say they are losing patience with the country’s work traditions, some of which make it difficult to work from home. Hospitals might collapse under new wave of COVID-19 infections. • Taiwan President: “Despite the virus’s highly infectious nature and our proximity to its source, we have prevented a major outbreak. As of April 14, we have had fewer than 400 confirmed cases. This success is no coincidence” • Indonesia has seen a rapid increase in deaths in recent days, widely criticized for limited social-distancing measures and testing. It has become the country with the most number of COVID-19 cases in SE Asia, and a fatality rate of nearly 9 percent • India extended a nationwide lockdown by nearly three weeks. • Lifted by virus response, South Korea’s governing party wins election. • With a major holiday ahead, Japan broadens state of emergency. The move expands the emergency he declared for seven prefectures, including Tokyo and Osaka. It gives governors the authority to call on businesses to close and residents to stay inside, but no enforcement power. • Hong Kong reported no new confirmed cases for the first time since the beginning of March. • In South Korea 163 people who recovered from coronavirus have retested positive. The same has been recorded in China. • Singapore’s coronavirus caseload has more than doubled in the past few days, with more than 8,000 confirmed cases as of Monday, the highest in Southeast Asia. • In India, health officials have been attacked while attempting to conduct health screenings. • Coronavirus spreads to Afghanistan’s presidential palace • As many as 100,000 people ignored a nationwide lockdown in Bangladesh to attend the funeral of a political leader on Saturday.

Australia & New Zealand • Australia and New Zealand relax restrictions. • Surfers returned to a few beaches in Sydney on Monday • Children in New Zealand will return to school in a week. • Qantas and Virgin Australia to fly government backed domestic network. • Virgin Australia goes into voluntary administration after being denied a bailout. • More than 700,000Coronavirus Australians COVID lost their-19 jobs in the first 2 weeks of restrictions. • New Zealand PM JacindaGroup ArdernCMT Briefing announces an easing of lockdown measures after thanking people for "stopping an uncontrolled explosion of Covid-19" 8 IN THE NEWS… UK & Europe • Turkey's coronavirus cases overtake Iran to become new COVID-19 hotspot. The first case was confirmed on March 11th • In Spain, thousands of construction and factory workers returned to work on 13 April. The majority of the country is still under stringent lockdown measures. • Italy, once the epicenter of the virus in Europe, also gently eases some lockdown measures from 14 April and allow some shops to reopen; the majority of lockdown restrictions will remain in place until May 3, 2020, however, and factories will remain closed. • Belgium now has the second-highest death rate in Europe, after Spain. At least 4,440 people there have died. • In Moscow, a new digital pass system meant to control movement instead led to chaotic crowds, setting back weeks of social-distancing efforts. • Romania banned exports of agricultural goods to countries outside the European Union. The country is the first member nation to do so. • Britain extended its lockdown by three weeks, amid signs that the country is nearing the peak of its coronavirus outbreak. • In France, the government is considering asking people to install a contact-tracing app, but privacy protections may limit its effectiveness. Africa • South Africa is still in lockdown. • SA expecting the virus to hit in September. SA issues strategy on easing lock-down rules in stages by regions, economic sectors • Number of tests: South Africa 114,711, Ghana 60,916, and Egypt 55,000 Middle East • GCC Countries are slowly seeing an increase in the number of COVID-19 cases. • Religious authorities are urging Muslims around the world to pray at home during Ramadan. • Saudi Arabia's Health Minister says ministry received $12.52 billion to deal with #coronavirus. Began conducting mass screenings in populated neighborhoods. • In Iraq, a stigma around illness and quarantine deters people from being tested or seeking prompt treatment, which may explain relatively low case count. • #Kuwait health authorities introduced ‘electronic bracelets’ for returning nationals to prevent spread of #COVID-19 • In UAE, thousands of workers are tested for Covid-19 for free every day. South America • Latin America’s health systems brace for a battering. • Ecuador and Brazil are the hotbeds in South America. • Colombia is trying gender-based social distancing: Men can leave the house to seek out essentials on odd-numbered days, women on even-numbered days.

Coronavirus COVID-19 Group CMT Briefing 9 ECONOMIC IMPACT: REVISED GDP PROJECTIONS I.M.F. Predicts Worst Downturn Since the Great Depression: “The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.” Says its forecast for the COVID-19 recession might now be too optimistic

• The global economic contraction from 1929 to 1932 was approximately 10 percent. Advanced economies shrank by 16 percent during that period. • It started in the financial sector and played out over several years. • The current drop in economic activity has been sudden. Threatening to reverse decades of gains. • Even a short-lived outbreak would drag the world into a 3% GDP contraction. • The global economy would contract by -3% in 2020, a reversal from +3.3% projected in early 2020. • $1 trillion lending capacity to help vulnerable economies cope with recessions and they endorsed a proposal to let poor countries suspend debt service payments. • The US is expected to take a severe hit, with the I.M.F. projecting that the American economy will contract by about 6% in 2020. Output at U.S. factories declined by the most since 1946. • Euro-area economy will shrink by 7.5%, led by steep declines in Italy and Spain. • IMF skeptical about the prospect for a “V” shaped recovery in the United States, suggesting that a sharp rise in unemployment and disruptions to supply chains will keep the economy below its pre- virus trend next year. • The loss of global output would be “far worse” than the 2008 financial crisis. • Policymakers were facing an unusual predicament in that traditional stimulus measures are little match for a pandemic that is being fought with shutdowns and quarantines. • Even if spending starts in April, we see little chance of a meaningful pickup in activity in the immediate future,” economists at J.P. Morgan wrote in an April 9 research note, noting that reopening could lead to relapse.Coronavirus “We don’t COVID think -that19 the bottom of the current downturn will occur until May at the earliest.” Group CMT Briefing 10 • The health of the economy will be dictated by the trajectory of the virus. ECONOMIC IMPACT: GROWTH & FINANCIAL PROJECTIONS Sharp tightening of financial conditions: Global growth forecasts: Unprecedented outflows: Asset prices plummet:

The sharp tightening of global Emerging markets risk bearing financial conditions , together with the heaviest burden. They have the dramatic deterioration in experienced the sharpest Global construction output forecast: As a result of actions aimed at the economic outlook has shifted portfolio flow reversal on record: containing the fallout from the the one-year-ahead distribution of about $100 billion or 0.4 percent pandemic, investor sentiment has global growth massively to the left. of their GDP. stabilized in recent weeks. This points to a significant increase Strains in some markets have in downside risks to growth and abated somewhat and risk asset financial stability. There is now a prices have recovered a portion of 5% likelihood (an event that their earlier declines. Sentiment happens once every 20 years) that continues to be fragile, however, global growth will fall below -7.4 and global financial conditions percent. For comparison, this remain much tighter comparedCoronavirus to COVID-threshold19 was above 2.6 percent in the beginning of 2020.Group CMT Briefing October 2019. 11 ECONOMIC IMPACT: OIL On Monday night, US Crude oil futures fell below $0 in historic crash. The OPEC+ cut is not expected to alleviate the glut in the coming weeks, as global demand is falling by 30 $28.99 > $14.19 million bpd, down 30% from the typical global consumption. KFC Bucket OPEC Basket– 22 April 20 pcs chicken only • On April 1, Saudi Aramco said that it was “breaking records to supply 15 tankers with over 18.8 million barrels of oil", targeting 600,000 bpd in exports to the U.S. Saudi Arabia had loaded seven supertankers for the U.S. in the first week of April. • Saudi Arabia, which remains the lowest-cost oil producer in the world, can make money @US$20, for Russia this is @US$40. • Prices went negative because the market fears there is not much storage left amid collapsing demand in the coronavirus pandemic. • The world's largest oil storage firm, Vopak, which operates three main facilities in Singapore, Rotterdam and Fujairah, is saying they're at capacity. • Nobody wants physical delivery for May, and with storage options dwindling in some places, traders liquidated their positions, selling contracts at discounts, abandoning the May contracts and moving on to June. • Analysts say that the June contract – trading at ~$20 per barrel as of Monday now becomes the important number to watch.

What does this mean in the short term? Benchmark price now lower than the cost of production, transport and storage 1. US producers now face "necessary cuts” forced on the market by economics. 2. Oil firms are then forced to pay others to keep their wells running, offering barrels at negative prices to get them off their hands. 3. Wall Street suffers its worst drop in three weeks as oil market craters. The S&P 500 dropped more than 3 percent on Tuesday, its biggest daily decline in three weeks. Major European markets were 3 percent to 4 percent lower. 4. There will be a significantCoronavirus impact COVID on oil--19producing economies, including the Group CMT Briefing U.S. Canadian oil industry will be the collateral damage. 12 ECONOMIC IMPACT: CONSUMER SENTIMENTS IN ASIA Consumers remain resilient even as they expect an impending hit to their personal finances, demonstrating varying degrees of confidence in economic recovery, with those in earlier or later stages of the epidemic more optimistic.

• Over the last month, McKinsey has twice taken pulse surveys of consumer sentiment in China, first on February 21- 24 and again on March 23-30, when they also conducted initial surveys in India, Indonesia, Japan, and South Korea.

• Asian countries are absorbing the COVID- 19 pandemic at markedly different rates, with the impact just beginning to bite in India and Indonesia even as China sees new cases stabilize and local transmission is contained.

• Consumer optimism likely tracks the stage of COVID progression, recently publicized government measures, and news events.

• Most countries believe COVID-19 will impact their routines and finances for 2-6 months

• Consumers concerned about public and personal/family health, the economy, and how long the crisis will last

Coronavirus COVID-19 Group CMT Briefing 13 THE FUTURE IS NOT WHAT IT USED TO BE: THOUGHTS ON THE SHAPE OF THE NEXT NORMAL 1. Distance is back 5. More scrutiny for business For businesses, the prospect of more border Citizens all over the world could face higher restrictions, a greater preference for local over taxes and/or fewer services in order to pay for global products and services, the need for the $10.6 trillion committed so far. The public will resilience across supply chains driving a move to expect/demand that their money be used for the bring sourcing closer to end markets and benefit of society at large. perhaps renewed resistance to globalisation are all possible. 6. Changing industry structures, consumer behavior, market positions, and sector 2. Resilience AND efficiency attractiveness Businesses will need to figure out how to One of the key questions facing business leaders operate in new ways. In short, resiliency—the is whether their industry will rebound from the ability to absorb a shock, and to come out of it economic shock posed by the virus, or sustain better than the competition—will be the key to lasting damage. Those that have shown survival and long-term prosperity. themselves to be less resilient may find it difficult to regain their pre COVID-19 standing. 3. The rise of the contact-free economy In three areas in particular—digital commerce, 7. Finding the silver linings telemedicine, and automation—the COVID-19 There could be some positive outcomes of the pandemic could prove to be a decisive turning coronavirus crisis. Individuals, communities, point. businesses, and governments alike are all learning new ways to connect. For businesses, 4. More government intervention in the the consequences have been profound. Many economy have learned how to operate remotely—and at a As of April 10, governments across the globe high level and at far greater speed. These had announced stimulus plans amounting to practices could well stick, making for better $10.6 trillion—the equivalent of eight Marshall management and more flexible workforces— Plans. Most spending is directed to three areas— something that could be particularly useful for many women, the disabled, and those who prefer supporting citizens’ basicCoronavirus needs, preserving COVID -19 jobs, and helping businesses to survive another untraditional career trajectories. Group CMT Briefing day. 14 TOMORROW’S INNOVATION LEADERS ARE MADE TODAY Growth requires innovation. Conventional wisdom has long suggested that when it comes to innovation, smaller The recovery will eventually come, and the companies companies have an advantage. that navigate the crisis deftly while positioning themselves for the return to growth will reap The data, however, paints a more nuanced disproportionate rewards. picture. Even before the pandemic, recent BCG research had found that the innovation The 50 companies on BCG’s list of the 50 most success rates of smaller companies were not innovative companies for 2007, all of which made higher in any statistically significant way than significant investments in innovation despite the those of larger companies. slowdown, greatly outperformed the market as the economy recovered, delivering total shareholder returns that were 4% higher per year than the market Reimagine your from 2007 to 2012. innovation system. • De-average, don’t just divest.

• Change culture, now. • Pull external partners closer and fill capability gaps.

• Build resilience through business

The MSCI Index is a measurement of stock market performance in a particular area. MSCI stands for model innovation. Morgan Stanley Capital International. • Look for new opportunities. Coronavirus COVID-19 Group CMT Briefing 15 COMMUNICATING WITH TEAMS AND STAKEHOLDERS DURING COVID-19 Every crisis has a life cycle, and emotional states and needs vary with the cycle’s stages. COVID-19’s speed and scale breed uncertainty and emotional disruption. How organizations communicate about it can create clarity, build resilience, and catalyze positive change. 1. Give people what they need, when they need it 2. Adjust your communication mix by your current crisis stage. 3. Communicate clearly, simply, frequently 4. Choose candor over charisma 5. Build resilience Additional reading: McKinsey: Connecting with customers in times of crisis BCG: Corporate Citizenship's Moment of Truth.

Coronavirus COVID-19 Group CMT Briefing 16 STRATEGIES TO MAKE REMOTE WORKING MORE EFFECTIVE As COVID-19 forces organizations to embrace virtual work, leaders must reimagine how they engage and collaborate with their colleagues. 1. Basic tools for remote working

• Set up an infrastructure for communications e.g. conference calls and videoconferencing, and ensure that all users know how to access it

• Agree on a file-sharing method for remote working to include version control and accounts for relevant security concerns, e.g. shared files

• Establish a help line consisting of super users who can help colleagues access the virtual private network and navigate other elements

2. Virtual work and collaboration

• Divide teams into effective remote units. Implement a new team structure, one that is smaller and cross-functional (Exhibit 1). Each team should have all of the areas of competence and expertise that are necessary to complete its tasks.

• Shift to leading teams based on weekly outputs and goals. Regular and frequent meetings, well-defined goals, and a digital team room or dashboard for tracking progress can ensure that the entire team is aligned on next steps and timelines.

• Implement best practices for effective team performance. This crisis requires organizations to make a sustained investment in culture in several ways. First, leaders must make culture a high priority and establishCoronavirus team norms COVID that-19 provide the underpinnings of a healthy team culture.Group Second, CMT Briefing employees must address how they can still feel like a team without interacting face-to-face at the office. 17 IF YOU WOULD LIKE TO KNOW MORE ABOUT HOW WE ARE MANAGING THE COVID-19 CRISIS VISIT HKA.COM

Coronavirus COVID-19 Group CMT Briefing 20