World Supply Chain Was Fragile Even Before The Pandemic Or The Ukraine War

A minor jolt to the supply chain anywhere in the world can be disastrous

There’s a lot of talk about how fragile the supply chain is today, but it was never any different.

Our entire planet is integrated like a giant factory. Energy, resources, and products flow in all directions. Only through this frantic activity that the entire world participates in, we are able to have and keep our lifestyle and comforts today. From computers to food.

This is so because it's difficult to produce and maintain the products that we use. Even for the most simple product, a large part of the world’s industry and its supply chain must take part in order to bring that product to us and to make it affordable.

We have to have it this way because otherwise, we would have to go decades back in regard to our living standards, maybe fifty years or more, if we decided that every country should be entirely self-sufficient. And many, many countries would never be able to be entirely self-sufficient because it’s impossible to create and maintain some industries that are needed for some products - from high-tier electronics to heavy industry - if a country is smaller than a certain size.

So, in a ‘de-globalized’ world, the countries that decide to be entirely self-sufficient would need to accept going back 50 years, and many countries would have to accept going back, even more, maybe 100–150 years, losing certain technologies and amenities that we are used to today. Including life-saving ones.

This means that an entirely isolated world in which each isolated country maintains its own isolated industry is not possible. So the supply chain will need to keep existing, and it will be vulnerable.

But this doesn’t mean that it should be this vulnerable.

The current supply chain is so vulnerable that any war, catastrophe, or major crisis in any part of the world can easily break it. And if it doesn’t break the chain, it can hamper the chain so much and create an economic crisis anywhere in the world, and maybe the entire world.

Take the example of the tsunami that was caused by an earthquake in South East Asia a few years back: The tsunami destroyed half of one hard disk factory in the region and affected another. These two hard disk factories were manufacturing important parts that supplied the entire world’s hard disks that are used in every computer. The resulting supply shock caused not only a big rise in hard disk prices but also hampered the quality of the world’s hard disk supply. For 1–2 years, the hard disks become very unreliable and prone to failure, prompting a new market in refurbished drives which were at times even more expensive than brand new drives because refurbished disks had failed before and got their unreliable parts replaced. Therefore they could easily be more reliable than brand new disks.

Today its no different

The supply chain is still very fragile even without any pandemic or war. And it could be much worse:

Imagine a major earthquake offshore South China Sea or California. Imagine the resulting tsunami, or the earthquake itself, destroys Shenzen or San Francisco.

Or a major war. A pandemic. Even, an asteroid impact at such a place. Anything that you can imagine.

Not only the affected country would be crippled, but the entire rest of the world would immediately feel the lasting impact.

And we do know that some of these regions are past due for certain catastrophes too - like the regions that are earthquake-prone. We know that it will happen. But we just fool ourselves into thinking that it will not happen in our lifetime.

But it can happen anytime. And break the world supply chain even worse than the pandemic or the Ukrainian War.

This is not a sane state of affairs. Sitting on such a fragile supply chain and avoiding thinking that something may happen is not a reasonable and safe policy.

We must make the world’s supply chain more reliable

The world’s industry must be as distributed as much as possible. Any major concentration of industry that is critical to the functioning of the entire world, must be distributed to two or more regions. All of these regions must be able to produce and supply the same product or component that is needed for the functioning of the supply chain. Especially, the industry concentrations in natural disaster-prone regions must be divided and distributed to more regions that are not prone to get affected in a disaster that would affect those regions.

Each country must maintain inside the country the fundamental, critical industries that are needed for the well-being of its people. From health to food. Regions that are greatly integrated both economically and politically can share these industries. But countries that are not in such a structure must keep these industries on their own.

So that no country will be lacking even minor things like masks during a pandemic, just like what happened during the Covid pandemic. Which caused more of the world to get affected because many countries weren’t able to provide even masks to their people, leaving aside medical services or vaccines.

Lo and behold - even today, due to the crisis caused by the Ukraine War and the sanctions of the Anglo-American financial establishment that prevent African, or South American countries from buying grain from Russia, large parts of the world risk a potential famine. So much as kicking a country out of the international money transfer systems like SWIFT out of political motivations, can cripple the supply chain.

Things like this must not be possible. A minor disturbance, disaster, problem, or political whims of singular countries or a handful of countries must not be allowed to break the entire world’s supply chain and imperil everyone on the planet.

The world’s supply chain must be made a distributed, reliable system, providing both reliability to the supply chain and also jobs and economic activity to more regions than a few concentrated regions.

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