Coronavirus crisis shows a need to track donation dollars. Here’s how China’s tech industry, through blockchain and AI, can help

History repeats itself with a scandal over the handling of public donations, this time amid a deadly virus outbreak in China, damaging public confidence
Crisis relief operations are time-sensitive and complex, but the technology to improve them is available and should be deployed

Syren Johnstone

Published: 1:00am, 5 Feb 2020

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Much anger has been directed at the Hubei Red Cross for its handling of donations intended for the Wuhan coronavirus crisis. After Beijing ordered all public donations to be funnelled through five government-backed charity organisations, there was widespread concern that donations were not being put to use where needed.

So, how can we do better in delivering supplies to people in need and instilling confidence in the organisations charged with managing humanitarian crises? Doing better may depend on the modernisation of charities through technology.

“One of the lessons learned was that emergency response must be better developed at the local level.” This was what the Red Cross said on the 10th anniversary of the deadly 2008 earthquake in Sichuan. Billions of dollars that had been donated after the disaster were mishandled. But what has been learned?

In the current crisis, private industry has had to come to the fore to solve the problem. While Cainiao, a logistics company in the Alibaba Group, and SF Express have coordinated delivery logistics, Jiuzhou Tong, a company listed in Shanghai, has been assisting the Red Cross to more efficiently receive and distribute donations. Yet these are a stopgap fix. An enduring solution is still needed that can fundamentally change how such crises are handled.

A 13-day-old baby survivor of the May 12, 2008, earthquake in Wenchuan, Sichuan, receives treatment five days later. Billions of dollars that had been donated after the disaster were mishandled, but has the lesson been learned? Photo: AFP

After all, charities should be prepared to deal with crises. By their nature, crises are large-scale, happen quickly and unexpectedly, and become increasingly serious the longer it takes for an effective response to emerge.

A striking concern is transparency: charities receiving donations have a fiduciary and moral duty to apply them effectively and for the purposes intended, and their work must stand up to scrutiny. This affects the willingness of the public to donate.

Problems involving post-disaster relief are not unique to China. Donations for the survivors of Hurricane Maria, which struck Puerto Rico in 2017, were found rotting in a car park a year later. And from penicillin being stolen and faked in the aftermath of World War II through to today, fake medicine remains a problem in many parts of the world.

Why be scared of blockchain when we can manage and grow it?

The present crisis should be seen as a call to arms for China’s tech industry, which has the know-how and resources to radically change the landscape of crisis response and the management of donations through the implementation and use of blockchain and artificial intelligence, both of which are already in common commercial use.

Blockchain is a superior tool for tracking and verifying the origin, journey and use-destination of pretty much anything. It can be applied to donation dollars or N95 masks. The records it creates, such as when a box of masks is placed on a plane, when it arrives at the receiving warehouse and when it is delivered to a hospital, can be securely stored.

Importantly, while writing to the blockchain can be strictly controlled – thus creating clear points of accountability – it can also be given public visibility, providing transparency to all stakeholders, including donors and receivers, as well as public oversight bodies. Anyone could track the progress and use of their donation.

Workers unload boxes of protective suits from a cargo plane at Tianhe International Airport in Wuhan, Hubei, the epicentre of a coronavirus outbreak. Blockchain can be used to track and verify the origin, journey and use-destination of donated goods. Photo: Xinhua

When responding to a crisis, charities also face logistical problems involving complex, data-dependent questions requiring expert judgments. Considerable amounts of data must be integrated that, so far as infection data is concerned, it is not only subject to rapid change but becomes quickly out of date. Deciding where and when limited resources can be most effectively spent is a difficult, complicated task.

This is where AI can be employed to facilitate optimal outcomes. In the context of blockchain-based donations, outcomes would not only be based on models developed by epidemiologists but also by the current and forecast supply and utilisation of limited resources. Importantly, there would be visibility of process, which is critical to restoring public trust in the system.

AI applications surge as China battles coronavirus outbreak

These technologies are already in widespread use, such as by the likes of Alibaba, SF Express and Apple, so why not charities? In China, President Xi Jinping has said that opportunities presented by blockchain technology must be seized, adding that the technology could be applied to support an array of basic needs, such as food and medicine safety.

The hand of private industry is needed here. Public-private and mixed ownership reforms in China testify to the reality that centrally controlled organisations, be it a state-owned enterprise or a government-backed charity, have not developed management systems or innovated solutions to problems as quickly as private enterprise has.

If China can build a hospital in under 10 days, can the combined efforts of tech giants develop a blockchain and AI system in a short time?

We must be more ambitious. Fundamental changes are needed to the structure and method of how such crises are handled. Common standards for dealing with problems such as the process for acquiring, managing and sharing quality data require the collaboration of global technologists.

The time to develop borderless solutions based on fit-for-purpose technologies is now. Let us not wait and find ourselves in the future again talking sentimentally about “lessons that were learned”.

Syren Johnstone is executive director of the LLM (compliance and regulation) programme at the University of Hong Kong. This article is an abridged and edited version of one published on SSRN, titled “A viral warning for change. The Wuhan coronavirus versus the Red Cross: better solutions via blockchain and artificial intelligence”

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