Economic security: A need for a renewed global effort
Among the tough lessons learnt by companies, nations and alliances from the pandemic has been the fragility of economies and supply chains in absorbing shocks.
Despite the significant private sector successes in keeping products supplied globally, a reassessment of preparedness has intertwined with the pre-existing sentiment of cautiousness towards external economic threats in the 21st century, heightened by the US-China trade war in 2018 and 2019.
This has led to the increasing appearance of national ‘economic security’ in the lexicon of global administrations, certain to be amplified by the impact of the ongoing war in Ukraine on trade and supply in key energy and agricultural sectors.
In the Asia-Pacific region, Japan’s new prime minister Fumio Kishida has established a dedicated Minister for Economic Security and is in the process of legislating a landmark Economic Security Bill.
Similarly, Australia has set up an Office of Supply Chain Resilience within their government infrastructure and a regional Supply Chain Resilience Initiative partnership with India and Japan to minimize supply chain vulnerabilities that could adversely impact their economic security.
However, this is now a truly global concern. The 2021 UK presidency of the G7 argued ‘for a step-change in global economic governance’ with a renewed focus on the collective management of economic and supply chain risks.
The concept of ‘economic security’ encompasses a broad set of interconnected issues and elements, such as investment screening, anti-coercion instruments research integrity, and supply chain resilience. Focusing on supply chain resilience, there are three fundamental issues to consider.
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