2021: In Which We Rise from the Ashes of the Pandemic - Goodbye, Annus Horribilis?
If anyone had told you that 2020 would be a year in which you are virtually guaranteed a lie-flat bed in economy class, businesses instructed employees not to come into the office, and budget supermarket Sheng Siong’s shares outperformed bank blue chip DBS’s, you would have sent the chap to have his head checked.
But as the new coronavirus spread worldwide, the ensuing Covid-19 pandemic forced billions into lockdown. Passenger numbers were devastated, but massive amounts of cargo still kept planes flying, leading to post-apocalyptical scenes of cabins populated by a mere handful of travellers. As people carved out workspaces on their dining tables, leisure time gained from cutting the commute was spent on rekindling long neglected hobbies such as cooking and baking.
The discovery of several vaccines promises a return to normal, but we are not out of the woods yet: the antidote rollout will be unbalanced across the globe, favouring rich nations with the wherewithal to order and stockpile supplies.
Even then, it would be too late for many businesses that could not pivot to the new reality, but a silver lining: the pandemic has accelerated technological innovations that will place surviving companies in good stead to flourish in the digital economy after the dust has settled.
While exercises in predictions are always fraught with inaccuracies, we persevere – not so much to get things exactly right, but in the hope that things will get better. In that light, here are our partners’ projections for 2021.
Thio Shen Yi, SC (Disputes)
Wirecard in Europe. Hin Leong at home. What is past is prologue; more corporate scandals are to be expected. Companies will face pressure to restructure debt, and in that process, misfeasance and negligence are more likely to come to light. Demands for accountability will lead to more regulatory action or civil claims against the boards of directors and auditors for negligence and breach of duties. While this corporate purge will be painful, the hope is that it will lead to a more sustainable ecosystem, where proper corporate behaviour is internalised, even while regulatory oversight becomes more intelligent.
Stefanie Yuen Thio (Corporate and M&A)
China continues to flex its global political and economic muscle. While Hong Kong remains a capital markets powerhouse, its vibrancy as an economy wanes. The exodus of native Hong Kongers is made up for by a flood of immigrants from the Mainland. Singapore is the unintended beneficiary, with more international corporates and family offices setting up regional HQs here. The SGX allows SPACs listings ahead of Hong Kong to much handwringing from armchair critics who bewail the slow death of corporate governance and transparency. Activity returns to malls, now augmented by artificial intelligence, and Covid-19 becomes a dim and distant memory.
Adrian Tan (IP & TMT)
For traditional banking, 2021 will signal the beginning of the end. The pandemic showed the world that we could survive without anyone ever needing to queue up at a brick-and-mortar bank branch, or meet a human relationship manager in the flesh, or even sign a paper form. Banks could no longer justify wasting resources hiring tellers, or paying rent to operate branches. Even ATMs will become obsolete, as we start to give up using old-school cash. Singapore will be seeing half a dozen new digital banks soon, and long-established banking brands will be reinventing themselves for the post-Covid-19 world.
Ian Lim (Employment & Labour)
As the true economic effects of the pandemic start to bite and government support dries up, 2021 is likely to see more of the good, bad and ugly from 2020 on the employment front. Which is to say, more terminations and retrenchments, but also more M&A with the resultant large-scale employee transfers, as corporates with dry powder reserves continue to snap up bargains. The WFH revolution is also here to stay, with most large employers allowing the arrangement at least partially even after the vaccine becomes available – and speaking of which, expect to see at least some employers making Covid-19 vaccinations compulsory.
Jennifer Chia (Banking & Finance and Corporate Real Estate)
In a post-pandemic landscape, where work-from-home (WFH) is the norm, our abodes will become the centre for our entire lifestyle. Private home sales will primarily be driven by larger (and pricier) homes as Singaporeans increasingly demand a more spacious sanctuary. Watch for the beginnings of the next en bloc fever as developers’ land banks are depleted, coupled with homeowners learning from the last season that the collective sale process must start when the economy is down, in order to catch the upswing for the best deals.
Melvin Chan (Disputes and Construction)
The new year brings new hopes and false dawns. 2021 will be a year of contradictions. The full impact of Covid-19 will hit home, sans government handouts, yet the euphoria of an available cure and interest rates so low they beggar belief will give an illusion of normality. While activity in the property market continues to defy expectations (and logic), private sector construction activity is likely to remain muted, still reeling from the double whammy of labour shortages and increased costs. The public sector, long the key demand driver here, will continue to prop up the industry with ongoing, albeit delayed, civil work and public projects. And perhaps that is all 2021 can aspire to be – a crutch to lean on for one not quite out of the woods, but enough to sustain us, as we expectantly await the vaccine to the economy.
Kelvin Koh (Disputes, Private Wealth and Trust)
Endorsement of cryptocurrency by institutional investors. Digital banks coming online in Singapore. Covid lockdowns spurring digitisation of global economy. The new generation of crypto- and tech-rich will seek wealth protection and management. Capitalising on its tax efficiency and its neutrality in the rising East-West tensions, Singapore is well poised to tap on new opportunities to grow its wealth management hub. With increasing regulatory acceptance of digital KYC, trust companies and wealth management services in Singapore will ride the new wave of digitisation.
Ong Pei Ching (IP & TMT)
What was old would be new again, supported by technology. Lockdowns sparked the now oft-repeated half-joke of a flurry of sourdough baking, made possible with online recipes and tutorials. Craft sets and traditional board games saved many a working (from home) parent, all ordered online and delivered to the doorstep of course. Yet, underpinning the seeming first-world frivolity in the face of a pandemic was a genuine paradigm shift in the way we work and live. The likes of old-school games and hands-on hobbies are enjoying a revival which will continue into 2021 because people seek a sense of control and the familiar in changing times. WFH was the norm for seamstresses in the 19th century who made shirts and gowns out of textiles sent to their homes. It will once again be commonplace for many workers in 2021 and beyond. The lines between work and home have already been blurred for many years with the advent of the internet and the email, such that this is a natural progression, albeit accelerated by pandemic-induced need. What sets us apart from those distressed seamstresses two centuries ago is our embrace of the flexibility that comes with en masse remote working arrangements, the support of enabling technology, and hopefully, the absence of Dickensian conditions.
Derek Loh (Disputes and Construction)
Raw material prices for construction increase due to a combination of speculative easy money inflows into commodities and a demand rise as the United States embarks on a construction boom to replace, renew and improve its infrastructure. This in turn affects construction projects around the world, including the Belt and Road Initiative. The word “propaganda” returns to use after a four-year hiatus, with the departure of President Donald Trump and his “fake news” catchphrase.
June Ho (Corporate and M&A)
In other news, Chanel goes completely online and delivers the same day to your home… good things never wait.