The global economy is awaiting the recovery of supply chains - Al -Ittihad newspaper

Atef Abdullah (Abu Dhabi)

Global supply chains are still suffering from unprecedented deficiency levels, starting from raw materials through food commodities, to cars, as a result of the Kofid-19 pandemic..Despite the slight improvement that affected some of its aspects during 2021, suppliers and consumers around the world face a delay in delivery operations and increases in the prices of many commodities, with the entry of the pandem.Besides the Corona Virus Museums, the problem of continued bottlenecks in the manufacturing supply chains has cast a shadow over the global economy, as it increased inflationary pressures at a time when the central banks are struggling to curb inflation.Supply chains' disorders are due to early 2020 during the early stages of the pandemic, as factories in parts of the world were damaged by the Corona virus outbreak in major manufacturing centers in places such as China, South Korea, Taiwan, Vietnam, and European industry giants such as Germany and France.As a result, many factories were closed and production decreased due to the closures that were done or workers injuries, while shipping companies reduced their schedules in anticipation of the low demand for transporting goods around the world.The pandemic also caused a defect in the traditional global production structure, as it led to pressure on products that there was no great demand for, and at the same time the services and products that were facing pressure in normal circumstances were disrupted..The demand was presented to some things that were witnessing usual, such as restaurant meals, trips, tourism activities and health resorts services, to a severe decline, and in return, the money was directed to buying home commodities according to the requirements for staying in homes, working and education from a distance.

The features of the era of globalization, and supply chains mean the flow of goods, data and funds related to products or services, from the purchase of raw materials to the delivery of the product to the final user.The supply chains are one of the distinctive features of the era of globalization and dependent on a complex set of international value chains, which link producers across multiple countries, and producers often use intermediate goods, whether they are raw materials, highly specialized goods or inputs produced by external suppliers, to develop the product to reach itTo its final form.For example, a computer that is assembled in China, for example, may require electronic chips made in Taiwan, a flat display from South Korea, and dozens of other electronic devices taken from all over the world, as well as the need for specialized metal materials from other parts of China orEurope, and any shortage of any of these components may lead to the failure of production.

Shipping prices on the other side, the rise in shipping prices to the highest levels in several years exacerbated the problem of supply chains, as the current price of a 40 -footed stereotype from China to the United States jumped 348% compared to the average price before the pandemic, according to the report of the United Nations Conference Organization.For Trade and Development (UNCTAD).The organization warned that the high shipping price will lead to an increase of 1.5% in global consumer prices in 2023, with the possibility that the smaller countries dependent on trade are the most suffering.Some consumer products heading to North America and Europe from Asia, such as computers, electronics and optical products, are also witnessing prices higher than others, and consumers can witness an increase of 10% in the prices of imported low -value commodities such as furniture, textiles, clothes and leather goods, according to the report.On the other hand, the air freight prices also increased to $ 14 per kilo on the Shanghai USA line last December, up from $ 8 by the end of August, which is higher than the previous record of $ 12, and registered when Corona hit supply chains for the first time the beginning of the former year.According to the data of the International Air Transport Federation, "IATA", the total number of shipments increased by about 8.7% during the period from August to October 2021, compared to the same period in 2019.A report prepared by the Cettelgence Consulting Foundation for marine data concluded that the shipping prices, which have harmed manufacturers and merchants alike, may take more than two years to return to normal levels.In parallel, a report of the International Navigation Chamber warned that the current supply chains disorders will be more severe for the global economy, compared to what happened in the first half of the former year, when the epidemic began to spread globally, when the epidemic swept Europe, the United States and emerging economies, I had Governments and companies are a reserve stock of almost all types of commodities, and a large part of this stock used the markets to extend their needs, and to overcome the turmoil, which occurred in the shipping and sudden stops of factories in China and Asia from production, and despite this there were empty shelves in many stores Commercial in advanced economies.

Challenges for global growth have sparkled the problem of supply chains in a dark shadow over the global economy and may limit its ability to recover from the pandemic, according to the World Economic Prospects Report issued by the World Bank.The bank warned that the obstacles to supply chains and dismantling of motivation, with the strongest inflation in the period of 80 years, are risks.In his latest expectations, the World Bank reduced its expectations for global growth to 4.1% this year, from 5.5% in 2021.The decline in the second half of the year 2021 was already greater than what the bank believed in its expectations for the month of June, due to the spread of the omekron and Delta intercourse.It is expected a "clear decline" this year, as well as the decline in global growth in 2023 to 3.a%.For his part, a report to the International Monetary Fund said that the continuous global recovery faces multiple challenges, including the rapid spread of the omekron breed, which caused many countries to return to imposing restrictions on the movement and resulted in increased employment and decline in production..The Fund's latest report believes that supply chains' interruptions are still a burden on activities and contribute to raising inflation rates, which increases the pressure from the strength of demand and the high energy prices..

Climate phenomena, unlike the pandemic, and the cause of reducing the supply of goods and goods, the supply chains face a more sustainable challenge, which is climate change, which led to hurricanes and floods that disrupted production facilities and damaged the agricultural sector in separate places around the world.The Bloomberg News Agency said that global trade is fighting to deal with what is much more than just a health crisis, in light of the high temperatures, the nature is likely to be the most powerful, random and repeated factor in provoking economic turmoil.Companies can follow a first step to combat the effects of extremist climatic phenomena, which are to identify or draw a special supply chains map, in order to better understand where the risks lie exactly, whether it is an exposed to hurricanes on the American Gulf coast, or a referral center as a flood exhibition.She warned that government policies designed to combat climate change may lead to the creation of additional costs in the short term, including legislation, which require companies to implement the necessary endeavors to protect the environment over their supply chains..Global supply chains are likely to need $ 100 trillion investments to reach the goal of clear zero carbon emissions over the next three decades, according to a report issued by HSBC Holdings and Boston Consting Group Group.It is possible that the relentless endeavors to reduce greenhouse gas emissions cause unexpected disorders.China can be seen a few months ago as an example of this, as the closure of coal stations led to an energy crisis, forcing the factories to close or reduce their time schedules.