The Alphen Group Geopolitics, Strategy and Innovation

TAG PREMIUM BLOG: Dealing with Risks

By Holger Mey

Those who were surprised by the outbreak and world-wide spread of the Corona virus/COVID-19 had either no understanding of biology or history or both.  Everything that happened in recent months was foreseeable and foreseen as well as predictable and, indeed, has been predicted.  Experts had for many years warned that a pandemic comparable to the so-called “Spanish Flu” of 1918 was about to happen sooner or later.  Even some politicians, such as President Obama, some years ago made alarming public statements to that effect.

Unfortunately, policymakers do not usually act in anticipation of challenges or threats, but rather re-act to events.  This is, on the one hand, understandable because the political agenda is comprehensive and requires constant adjustments and re-prioritization, and to take measures to prepare for contingencies that seem less likely are inevitably put lower down the to-do list.  That’s the nice interpretation.  On the other hand, and this is the not so nice interpretation, politicians in non-crisis situations prefer to promise good things to their respective peoples rather than confront them with harsh reality, such as a possible pandemic.  Shying away from confronting people with unpleasant reality and the need for appropriate funding and measures inevitably leads to inadequate societal preparation for the next crisis.

To some extent, the lack of precautionary measures, planning, and exercising in the area of civil defense, health care, disaster relief, protection of critical infrastructure, etc. is comparable to the lack of defense spending and military preparation during peacetime.  Historically, the result all too typically has been that societies later pay with both blood and money.

However, even among military planners there is a tendency to plan for only those scenarios that one would hope could just about be coped with.  The prevailing assumption tends to be that the opponent is either incompetent or cooperative, or both.  No more worst-case analyses, but rather best-case assumptions.  Little planning was “threat driven”, but rather “budget driven”.  Budget constraints led to a situation where it was more about making the Armed Forces efficient for peacetime rather than effective for wartime.

Much of life is about assessing likelihood.  As the physicist James Clerk Maxwell put it, “The true logic of this world is in the calculus of probabilities”.  There is a caveat. When it comes to security and defense (and insurances in day-to-day life) another factor comes into play: the level of possible or expected damage.  To put it simply, whilst “threat” is the product of “capability” multiplied by “intention”, “risk” is the product of “likelihood” multiplied by “level of damage”.  Military capabilities without any intension to use them do not pose any threat.  However, intentions change, which is why people speak of “potential threat”.  Risk, in contrast, is ‘intention agnostic’.  There may or may not be an intension, but a technical failure, human error, or a natural disaster, including a pandemic, can still present a severe risk.

Consequently, even a highly unlikely event can pose a significant risk if the damage it would inflict would be very high.  These are low-probability/high-impact scenarios’ and are precisely the kind of scenarios that cannot be neglected. Preparing for the worst reduces the likelihood that events that happen despite their low probability turn out to be extremely severe.  Resiliency requires an ‘architecture’ which demands hardening, immunization, emergency procedures, exercises and training, decentralization, diversification, autonomization of small entities, subsidiarity, an extremely competent research and development environment, a competitive industrial base, an effective and comprehensive health system, technical relief personnel, police, firefighters, etc. in sufficient numbers and sufficiently reinforceable.  That places a particular premium on flexible reserve force (stocks and people), and preparations for fast recovery, as well as the ability to mobilize civil society through effective civil defense. Thankfully, there are many ways to mitigate risk by preparing a society for the worse.  Moreover, there will be many positive effects for society, such as an improved and more robust health system, even if the worst case does not happen – or, at least, not happen soon.

There is still a small chance that this time policy-makers will learn from their past mistakes and their failure to prepare for a pandemic that was both predictable and predicted.  After the pandemic will be before the pandemic.  There are also many similarities with regard to war and military preparedness.  The difference is that preparing for the next pandemic mostly reduces its fatal consequences, whilst preparing for a strong defense not only reduces the fatal consequences of any future war, but also significantly lowers the likelihood that such a war would break out in the first place.  Can there be any better investment into the future?

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