Published in El Pais, 11 September 2021.
When COVID-19 started, we were worrying about the sick and the deaths it was going to cause. Then there were more comments that the global economy was also going to be affected. To control the virus, measures such as quarantines, border closures and mandatory closures of companies such as restaurants and non-critical shops have been introduced. All to save lives. With so many interventions in an economy it was obvious that it was going to affect the global economy.
Those who have paid attention have noticed that the prices of imported products are rising and that other products are becoming very scarce in recent days. All of this is a result of COVID-19. In the first instance one may think that we can live without some things and that we are very spoiled, but it is already lasting longer and it is difficult to say how long it will last. What happened?
First, many companies around the world have lost production, simply because governments forced people to stay at home, or because there were really sick people that also resulted in less production. It is difficult to recover this production. On the other hand, in many countries governments have introduced measures so that people did not lose all their income by not going to work, so the demand did not change much.
Secondly, I doubt that you have recently tried to find a container to transport something in the world. In the case you tried, you have noticed that the price of transport per container has increased a sixfold in the last year. On the one hand it is because suddenly there is a lot of demand and on the other hand it is the result that the logistics system has not yet become normal. In other words, empty containers are in the wrong place. Needless to say, this greatly affects the prices of the products we buy every day.
All this results that many people and companies are thinking about whether being dependent on a supplier on the other side of the world is not very risky and if it is not better to look for something closer. Some factories have had to close for several weeks because the chips did not arrive from Asia. Having a supplier a few km away, might be worth it. Perhaps more expensive, but in the long run maybe cheaper when including the risks.
More than thirty years anti-globalists have shouted that all this international trade is bad, perhaps they had some reason, I just doubt that they thought that a global pandemic was the support they wanted to make their point.
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