GLOBAL ECONOMY

A “Perfect Storm” Brewing in the Developing World

The coronavirus pandemic is causing misery all across the globe. But authorities are warning that in developing countries, the consequences will be especially dire and could even trigger a second public health crisis: widespread famine. 

The specifics

On Monday, the UN's World Food Program released an alarming report on the potential for extreme food shortages in developing countries. On Tuesday, Executive Director David Beasley pleaded with the UN Security Council to support those countries financially. 

• Lockdown restrictions have disrupted supply chains in developing countries, leading to drastic shortages. In Nairobi's largest slum, two people died in a stampede for flour and cooking oil.
• Beasley described the situation as a “perfect storm,” where a severe food shortage that existed before COVID-19 could nearly double from 135 million people at risk to 265 million by the end of the year. 

Developing countries are more vulnerable

Both to the virus and to the economic destruction it brings.  

First, many lack the medical resources necessary to treat people. According to the OECD, African countries’ health budgets average $12 per citizen/year, in contrast to the UK’s $4,000. Ten African countries have no ventilators. 

Plus, core revenue streams like tourism, taxation, and remittances (payments sent by migrant workers back to people in their home countries) are drying up. The World Bank estimates that remittances will sink by 20% this year—the biggest annual drop in recent history. 

• That loss of more than $100 billion will have major consequences for developing economies. Last year, remittances edged out foreign direct investment as the largest source of capital inflows to low- and middle-income countries, accounting for roughly 8.9% of GDP, the FT reports. 

Some experts are working on fixes. Oxford University professor of globalization and development Ian Goldin proposed “a global Marshall plan” where 1) $44 billion in debt owed by African countries in 2020 would be erased and 2) richer countries would divert at least $2.5 trillion to poor countries.

AVIATION

Turns Out It’s Bad For Airlines When No One Flies

Delta reported quarterly earnings yesterday and it’s worse than your first attempt at baking sourdough. A $607 million pretax loss—it’s first quarterly loss in five years—is ugly, but that’s just the beginning. The nation's biggest airline expects revenues to fall 90% in Q2.

Onwards and upwards?

Even as airlines hemorrhage money (Delta was burning through $100 million/day in late March), they are making preparations for when passengers return to the skies. 

Here’s what Emirates thinks an October flight to your buddy’s wedding could look like:

• Blocked off middle seats: You might have to shout to ask for your neighbor's pen to fill out the Sudoku. 
• No magazines: Turns out you won't even need that pen.
• Lots of gloves and masks: Flight personnel that come into contact with passengers, from boarding agents to cabin crew, will be required to wear personal protective equipment. 

Or you could just redesign the whole thing. An Italian manufacturer reimagined a more sanitary airplane cabin, complete with glass partitions and an extremely awkward, reversed middle seat.

EDUCATION

Harvard Succumbs to Perfidious Opprobrium

Yesterday, a reckoning came for the cash Harvard University was eligible to receive under last month’s coronavirus relief package. 

Roll the tape: The university paper reported last week that Harvard would get almost $9 million through the CARES Act. 

• Then on Tuesday, President Trump said at a press briefing that Harvard “shouldn’t be taking it.”
• Many other critics cracked their knuckles and got to tweeting about a school with a $40.9 billion endowment receiving support. 

Harvard came back with, “It’s more complicated than that. Let me explain.” In a tweet thread, the Harvard of eastern Massachusetts explained how the relief money would have come through a $14 billion higher education fund—not the Paycheck Protection Program, the fund for small businesses. 

But...the damage was done. Harvard announced yesterday it would not accept the funds.

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HOLIDAYS

Ramadan Mubarak

Just like Passover and Easter, Ramadan 2020 is moving to Zoom.

Ramadan, which starts tonight, is the holy month observed by Muslims around the world. Traditionally, it consists of daylong fasts, prayer, self-reflection, and donations to charity.

It’s also a marketing tsunami, with social media usage and consumer spending surging in the Middle East and parts of the Asia-Pacific region. Facebook publishes a series of guides for marketers focused on Ramadan, while Google even established an award for the best Ramadan-related YouTube ad campaign. 

• We’re not McKinsey, but we’re guessing social media use will increase even more this year.

Also different this year: The production schedules of wildly popular soap operas that entertain families in between fasts. Egypt’s TV industry can produce 80 serials for the month of Ramadan, CNN reports, but crews have been restricted from shooting by government lockdown measures.

Which means the soap slate could be emptier this year. As of April 15, only a “handful” of shows were ready to air, per Al-Monitor.

SOCIAL MEDIA

Happy 15th, YouTube

It’s been 15 years to the day since YouTube cofounder Jawed Karim uploaded the platform's first-ever video, 18 seconds of him pontificating about elephant trunks at the San Diego Zoo. Here’s a brief timeline on what’s happened since:

2005: YouTube launches its public beta in May, and with $3.5 million from Sequoia Capital it goes beyond beta by the end of the year. 

2006: Google acquires YouTube for $1.7 billion.

2007: "Charlie bit my finger” becomes the first viral video, proving babies are cuter than cats, and YouTube goes mobile-friendly the same month the first iPhone hits stores. 

2008: "Evolution of Dance" gets a record-breaking 100 million views.

2009: Justin Bieber. Vevo. The music world is never the same. 

2012: Psy’s “Gangnam Style” gets a historic 1 billion views.

2014: Susan Wojcicki becomes YouTube’s third CEO.

2017: The “Adpocalypse” and “Elsagate” throw the platform under public scrutiny.

As of last year, 500 hours of video is uploaded to YouTube...every minute. There’s no sign of that number going down, especially amid COVID-19.

WHAT ELSE IS BREWING

• Las Vegas Mayor Carolyn Goodman told CNN she wanted the city's businesses to reopen. Of the health risks, she said companies "better figure it out. That's their job. That's not the mayor's job."
• PE firm Sycamore Partners immediately regrets its decision to take Victoria’s Secret private and wants to nix the deal.
• Magic Leap, the well-funded augmented reality startup, is laying off about half its workforce and abandoning its consumer business, Bloomberg reports.
• The new iPhone SE, reviewed.
• PG&E’s CEO Bill Johnson will step down on June 30. He had been hired just over a year ago to help fix the culture at the California utility.

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BREW'S BETS

Sports fans: Whether you miss the agony of rooting for your team or the cathartic screaming that accompanies it, we’ve got you covered.

For agony, get into the trick shot game and learn the meaning of patience. You could be rewarded—ESPN is partnering with Facebook to produce a weekly show featuring the best fan-submitted videos. And each Wednesday, they'll throw one in SportsCenter's "Top 10." 

If screaming is more your thing, Bud Light is encouraging you to support coronavirus relief efforts by booing NFL commissioner Roger Goodell on Twitter during tonight's draft. And finally, to combine agony and screaming, check out the "NFL Draft Boo Meter" built by a bored college student. It will pull Reddit comments to measure fanbase sentiment over the course of the night. 

FROM THE CREW

Brew's Bookshelf

Every other Thursday, we're bringing you a few of the Brew's favorite business-related reads.

1. Inside story: No Filter by Sarah Frier is a behind-the-scenes look at how Kevin Systrom and Mike Krieger built Instagram. Sarah was a guest on our Business Casual podcast, and we can personally vouch for her whip-smart reporting and original storytelling. 
2. Personal finance: Rich Dad, Poor Dad by Robert Kiyosaki and Sharon Lechter is one of the best-selling personal finance books of all time, told through the stories of, you guessed it, a rich dad and a poor dad. If you're looking to boost your financial literacy, start here. 

Normally we'd list a third book rec, but today we've got a surprise. So many of you were interested in personal development books, we jumped the gun and compiled our favorites. .

YOUTUBE TRIVIA

To celebrate the 15th anniversary of the first video uploaded to YouTube, we created an online quiz to test your knowledge of the platform. But we'll also give you a little teaser right here before you play.

What is currently the most viewed video on YouTube? 

YOUTUBE TRIVIA ANSWER

"Despacito." Now you can take the quiz.