Shortages in essential goods: Are global value chains part of the problem or the solution?
Résumé
Supply chain disruptions did not cause the shortages of personal protective equipment (PPE) and other essential goods that the world experienced in the early months of the COVID-19 pandemic. Rather, the cause was manufacturers’ inability to step up production of PPEs to meet the demands of the crisis. The accepted wisdom that the pandemic exposed serious structural problems in international supply chains, such as an over-dependence on China, and that it would be better for countries to source supplies domestically, is inaccurate.
The companies that produced PPEs and other essential goods were experienced when it came to developing risk-management strategies. Manufacturers have understood the risks related to international supply chain shocks at least since 2008’s global recession and have long since responded by diversifying supplier bases, increasing manufacturing capacity and creating stockpiles. Many firms also relied on the China Plus One strategy as a buffer, which entailed duplicating production in China and at least one other country to protect against supply chain disruption and currency fluctuation.
Far from exposing a weakness in global value chains, the pandemic instead revealed their resilience. So well did the face-mask industry rebound from its initial shortage in fact, that industry revenues grew by 450 per cent from 2019 to 2021. Rather, the shortages arose because of limited stockpiles, governments’ lack of preparedness and constrained production, such as the difficulty in accelerating the melt-blowing process that creates the masks’ non-woven fabric. Exacerbating the situation – but only temporarily – were export bans of the type the Trump administration imposed on manufacturers, which required them to obtain federal approval before exporting PPE.
COVID-19 will not be the last pandemic the world experiences. Governments can prepare for the next one by establishing stress tests that assess a country’s ability to deal with demand spikes and other disruptions. The tests should consider the government’s level of stockpiling, the speed with which domestic and foreign production can be ramped up, the diversification of import sources and the limitations created by foreign export restrictions. If the market fails to pass these stress tests, then government must design policy tools to deal with the shortcomings the tests reveal. Limiting export restrictions to strengthen resilience, conducting joint procurement and drafting agreements to share essential goods are ways countries can work together to promote resilience.
Self-sufficiency, which looked to be the solution in the early days of pandemic shortages, only increases vulnerability to local disasters that can curtail domestic production. It also creates higher production costs and reduces the ability to ramp up production. Self-sufficiency forces countries to absorb the shocks themselves, resulting in large price swings and production changes.
It is now up to governments to learn the hard lessons that COVID-19 taught and improve preparedness for future pandemics.
Téléchargements
Publié-e
Numéro
Rubrique
Licence
The following is the copyright statement of SPPP.
Copyright © <Author name> <year>. This is an open-access paper distributed under the terms of the Creative Commons license CC BY-NC 4.0, which allows non-commercial sharing and redistribution so long as the original author and publisher are credited.
Publication Copyright and Licensing
The following guidelines and information, provided in six sections, are intended for authors (the “Author”) who are invited to write a paper (the “Work”) for The School of Public Policy Publications (the “Publisher”). The rights and responsibilities conveyed in the SPP Author Agreement will only apply once your paper is accepted for publication. At that point in the publication process, you will be asked to download the form and return a signed copy via e-mail to spppublications@ucalgary.ca. Please review the below information to ensure agreement with SPPP policies.
Section 1: Author’s Grant of Rights
In consideration of the Publisher’s agreeing to publish the Work in The School of Public Policy Publications, the Author hereby grants to the Publisher the following:
1.1 The irrevocable, royalty-free right to publish, reproduce, publicly display, publicly perform and distribute the Work in perpetuity throughout the world in all means of expression by any method or media now known or hereafter developed, including electronic format;
1.2 The irrevocable, royalty-free right to use the Author’s name and likeness in association with the Work in published form and in advertising and promotional materials related to the Work; and
1.3 The irrevocable, royalty-free right to license others to do any or all of the above.
Section 2: Prior Publication & Publication by Others
2.1 The Author agrees not to publish the Work, or authorize any third party to publish the Work, either in print or electronically, prior to publication of the Work by the Publisher.
2.2 The Author agrees not to publish the Work in any publication outlet which is substantially similar to The School of Public Policy Publications for a period of six (6) months after publication of the Work in The School of Public Policy Publications. Substantially similar is defined as a non-subscription, open-access publication outlet with a similar mandate/vision and intended audience.
2.3 Should the Author publish or distribute the Work elsewhere at any time or in any alternate format, the Author agrees to contact The School of Public Policy Publications to inform them of the subsequent publication.
2.4 Should the Author publish or distribute the Work elsewhere at any time or in any alternate format, the Author agrees to make reasonable efforts to ensure that any such additional publication cites the publication in The School of Public Policy Publications by author, title, and publisher, through a tagline, author bibliography, or similar means. A sample acknowledgement would be:
“Reprinted with permission from the author. Originally published in the The School of Public Policy Publications, http://www.policyschool.ca/publications/.”
Section 3: Editing and Formatting
The Author authorizes the Publisher to edit the Work and to make such modifications as are technically necessary or desirable to exercise the rights in Section 1 in differing media and formats. The Publisher will make no material modification to the content of the Work without the Author’s consent.
Section 4: Author’s Ownership of Copyright and Reservation of Rights
4.1 Nothing in this agreement constitutes a transfer of the copyright by the Author, and the copyright in the Work is subject to the rights granted by this agreement.
4.2 The Author retains the following rights, including but not limited to, the right:
4.2.1 To reproduce and distribute the Work, and to authorize others to reproduce and distribute the Work, in any format;
4.2.2 To post a version of the Work in an institutional repository or the Author’s personal or departmental web page so long as The School of Public Policy Publications is cited as the source of first publication of the Work (see sample acknowledgement above).
4.2.3 To include the Work, in whole or in part, in another work, subject to Section 2 above and provided that The School of Public Policy Publications is cited as the source of first publication of the Work (see sample acknowledgement above).
4.3 The Editors and Editorial Board of The School of Public Policy Publications requires authors to publish the Work under a Creative Commons Attribution-NonCommercial 4.0 International licence (CC BY-NC 4.0). This license allows others to distribute, remix, tweak, and build upon the Work for noncommercial purposes, and ensures the Author is credited for the original creation. This onward licensing is subject to section 2.4 of this agreement, which further ensures that the original publisher is credited.
Section 5: Author’s Warranties and Undertakings
The Author warrants that:
5.1 The Author is the sole author of the Work, or if a joint author, the Author has identified within the Work the other authors, and holds the copyright, either solely or jointly, and has the power to convey the rights granted in this agreement.
5.2 The Work has not previously been published, in whole or in part, except as follows:
5.3 Any textual, graphic or multimedia material included in the Work that is the property or work of another is either explicitly identified by source and cited in the Work or is otherwise identified as follows:
5.4 To the best of the Author’s knowledge, the Work does not contain matter that is obscene, libelous, or defamatory; it does not violate another’s civil right, right of privacy, right of publicity, or other legal right; and it is otherwise not unlawful.
5.5 To the best of the Author’s knowledge, the Work does not infringe the copyright or other intellectual property or literary rights of another.
5.6 The Author will indemnify and hold Publisher harmless against loss, damages, expenses, awards, and judgments arising from breach of any such warranties.
Section 6: The Reuse of Third-Party Works
The Publisher requires that the Author determine, prior to publication, whether it is necessary to obtain permissions from any third party who holds rights with respect to any photographs, illustrations, drawings, text, or any other material (“third-party work”) to be published with or in connection with your Work. Copyright permission will not be necessary if the use is determined to be fair dealing, if the work is in the public domain, or if the rights-holder has granted a Creative Commons or other licence. If either the Author or Publisher determines for any reason that permission is required to include any thirdparty work, the Author will obtain written permission from the rightsholder.
