Is This a New Era or Some Global Crisis? — Photo by Patrick Assalé on Unsplash

“If we apply our minds directly and competently to the needs of the earth, then we will have begun to make fundamental and necessary changes in our minds. We will begin to understand and to mistrust and to change our wasteful economy, which markets not just the produce of the earth, but also the earth’s ability to produce.”Wendell Berry

The lockdowns

Whether we like it or not, the (post) covid-19 period is going to be a new era. Perhaps, it sounds like I am sailing against the wind when everything seems to be “normal” once again. However, most institutions and systems we have been depending on for our survival and expansion are whispering for a change. The global supply chain(s) is of course one of those systems that will need some restructuration.

All over the world there are people complaining over critical price increase for most commodities. Most manufacturers, importers, exporters, and distributors are facing insecurities over freight costs and delay, as well as labor shortage, and raw materials scarcity.

Although the causes are complex, some major events have played a huge part into the global chain supply disruption:

The Covid-19 lockdown have helped increase demands for many products, like electronic gadgets, household cleaning products, disinfectants, hygiene products, etc.
Due to covid-19 related complications, there have been some drastic worker shortages within each step of the supply chain, which is another factor that has enhanced the financial crisis in slightly every part of the world and has created a breach in the global economic system that is still left unfulfilled.

The wars

The Russia-Ukraine war has worsened the economic disruptions, by leaving many countries with little capacity to acquire various products including grains, vegetable oil, metals (like nickel, platinum, palladium, rhodium, aluminum, cooper, etc.), crude oil and natural gas, and so on.

And yet the global economic system has already had its fracture even before the covid-19 crisis. The US-China trade war has contributed to the price increase of many goods because each country has applied some export restrictions to the other.

The microchip shortage

The microchip shortage is in some way affected by the USA-China economic war, although the main reasons seem to lie in the demand and supply disruption as well:

1) These last couple of years the demand for electronics have highly increased because of online working, online learning, home nesting and so on.

2) The need to adjust microchips to the new 5G trend has also affected the tech industry.

3) Many countries are involved in the chips making process, and under this circumstance it’s hard to maintain business as always when there have been lockdowns in most countries. And yet the worst thing is that the reliance of one country to another makes it even more difficult to rebuild the puzzle.

4) The electronification and automatization of cars have also played a part into the chip shortage.

Poverty

The poorest countries are the most affected by the present economic crisis because of their dependence upon the international community, and their structural and institutional vulnerability.

In developed countries there are a quite similar scenario, in which the poorest and most vulnerable people are the ones who suffer most from the consequences of the various disruptions that are occurring within the global supply system.

Global high demand and low supply for most commodities, when most people are affected by a pandemic and, consequently, have little (or no) resources to acquire the goods that they need, is a perfect scenario for economic collapse. The more shortages people are going to face, the poorer they are going to be, because commodities prices are getting higher.

No system is greater with more poor people, including Capitalism. Capitalism is about consumption, if there is a very reduced amount of people consuming in a given country, there will be some sort of debacle.

Even though it can be very difficult for many countries to handle this (post) Covid-19 multifaceted crises because of their own economic, historical and geopolitical conditions, sincere collaborative actions towards helping people figure out ways to fulfill their basic needs can be effective and will eventually have positive consequences on the larger scale of the economy.

Conclusion

There are still too many human and natural resources for us to resign. But we are in a point where we should realize that there is no reason to think that the others are less than us only because they are suffering, or because they don’t have that much as we do.

1) Covid-19 started in China, but within some months it was everywhere.

2) The Russia-Ukraine war is just in a spot of Eastern Europe, but many people in Western Europe (or even in some other parts of the world) are affected economically by it.

These two events are among thousands of facts that prove how interdependent we are. That doesn’t mean that we should manage to be totally dependent, either way it still remains a ratter impossible task, because we have too many resources to share together. However, we can make the links that tie us together become stronger and more resistant.

https://medium.com/illumination/how-the-post-covid-19-crises-are-changing-the-world-economically-25896656bce

Is This a New Era or Some Global Crisis?