Global companies are mapping their supply chains in the wake of the Covid-19 pandemic to gauge their resilience and better prepare for black swan events in the future, according to a World Bank official.
Political and policy concerns are risks for the global supply chain, which “turned out to be somewhat more resilient than people had thought”, Caroline Freund, the World Bank’s director for trade, investment and competitiveness, told the online Global Manufacturing and Industrialisation Summit on Saturday.
She said companies were “thinking of building more redundancy into their supply chains to reduce risk. This is something we will see particularly in critical supply chains [such as] medicines and medical equipment. We have already seen that with food and fuels”.
There were serious questions posed on the strength and viability of the global value chain – the system of mapping people and activities involved in the production of goods and services and its supply and distribution – at the beginning of the pandemic, she said.
However, the initial supply concern was quickly overtaken by the demand shock as borders closed and people were confined to their homes in many parts of the world, leading to a sharp fall in consumption.
“It ended up being a much stronger shock [for businesses] than accessing goods from other countries,” she said. “Demand has become a real concern.”
The pandemic brought the global trade, travel and tourism sectors to a halt in the first half of the year, tipping the world’s economy into a recession that is expected to be the deepest since the Great Depression, according to the International Monetary Fund.
The multilateral lender forecast in June that global gross domestic product would shrink by 4.9 per cent this year.
Global trade is expected to decline by 27 per cent in the second quarter of this year, compared with the previous three months, according to data by the UN Conference on Trade and Development. Global production and manufacturing output are set to decline by 9 per cent, compared with a year ago, UNCTAD said in May.
There are signs of a bounce-back, however, and the recovery is better than what was registered during the global financial crisis, Ms Freund said.
Data from the global shipping industry as of mid-August showed that trade was returning to “normal” but the recovery remained uneven in some regions.
“The biggest rebounds are in East Asia and the Pacific ... similarly South Asia,” Ms Freund said. “North America and Latin America remain weaker than before.”
Despite a recovery in the trade of goods, the services sector took a hit from the slowdown in the travel and tourism sectors, she said.
Points to remember
- Debate the issue, don't attack the person
- Build the relationship and dialogue by seeking to find common ground
- Express passion for the issue but be aware of when you're losing control or when there's anger. If there is, pause and take some time out.
- Listen actively without interrupting
- Avoid assumptions, seek understanding, ask questions
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
AL%20BOOM
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Need to know
The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours.
The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.
When to go: You can climb Kili at any time of year, but the best months to ascend are January-February and September-October. Also good are July and August, if you’re tolerant of the colder weather that winter brings.
Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
