Globalization suffers a bad week.
Globalization was called into question again this week, as both the Suez Canal and export of coronavirus vaccines became blocked.
The Ever Given, a 224,000-ton vessel that was en route to Rotterdam, Netherlands, got stuck in the Suez Canal and effectively stopped traffic both ways. Up to 20,000 cubic meters of sand, or approximately eight Olympic swimming pools, would need to be removed to free the container ship.
This is not the first time the Suez Canal has been blocked. The last blockage lasted eight years, as a war with Israel led to the Egyptians closing the canal between 1967 and 1975. But back then, trade volume passing through the canal was about 0.18 billion net tonnages. Today, with the increase in global trades, 1.17 billion net tonnages, or about 12% of world trade volume, pass through the canal annually.
With each passing day, there is an increased risk of shortages which may significantly hurt the supply chains of some global corporates, especially those who are reliant on the just-in-time inventory system.
Besides corporates, some countries are now left in a disadvantageous position as a result of some pharmaceutical companies’ global supply chains.
As the world is facing shortages in COVID-19 vaccines, European Commission President Ursula von der Leyen has now mandated AstraZeneca to "catch up" on deliveries to the EU before exporting doses elsewhere. In India, where the number of coronavirus cases has been surging, a temporary export ban has also been placed on the Oxford-AstraZeneca vaccine.
Globally, China has produced the most number of COVID-19 vaccines at 142 million, followed by the US at 103 million and Germany / Belgium at 71 million.
This week will surely lead to further reflections on whether globalization will be sustainable going forward. While it is not important for the pair of Lesotho-manufactured jeans to arrive on time, it is much more crucial when it comes to vaccines or food.
In addition, today’s globalized world has been, for the most part, built on rules that have been developed by the west. China is trying to change that, through the One Belt One Road initiative, building its own internet, or even the use of virtual currency in order to decouple from the U.S. dollar. This decoupling process surely will further increase hostility between the United States and China.
Companies would be wise to take this opportunity to reconsider strategies such as near-shoring to reduce the even larger shocks that have yet to come.
Spotlight on Ethnic Cleansing in Ethiopia and China.
This week saw the UN providing further evidence that ethnic cleansing has taken place in Ethiopia’s Tigray region.
A war first broke out in the region on November 4, 2020, between government forces and the Tigray People’s Liberation Front (TPLF), the former ruling party. Between 1991 and 2018, TPLF ruled Ethiopia with an iron fist that resembled an authoritarian regime. Since being ousted, they have come into conflict with the new government and neighbouring Eritrea, which held a poor relationship with the TPLF when it was in power.
Foreign media have long reported that rape was used as a weapon of war against women in the region and this has been confirmed by the UN. At least 500 cases of rape have been reported, including cases where men were forced to rape their own family members under the threat of violence. The US has also called the war an act of ethnic cleansing, with the Tigrayans being targeted by those from the Amhara region. Some Tigrayan villages and towns have been completely erased.
But the Ethiopian government proclaimed these accusations as fake news and it has been mobilizing pro-government groups to push their version of the narrative. The TPLF is also mobilizing its people to produce disinformation and misinformation.
Social media warfare is not only being used in Ethiopia. China is now using its social media network to mobilize citizens to boycott Western brands that have spoken out against the alleged use of forced labours in Xinjiang. H&M, Nike, Adidas, and other brands have all been targeted, and their goods are being removed from many of the country’s online platforms. Chinese celebrities are terminating their relationships with the brands.
China had a long history of utilizing patriotism as a tool to wield economic pressure on foreign companies, and social media is now providing a powerful platform for mobilization. Historically, Japanese companies have always been targeted when China needed to stir up a nationalistic narrative. More recently, Korean companies were targeted when South Korea deployed a missile defense system.
Social media is quickly developing into a tool for many governments to drive their own narrative, as well as a tool for governments to impose their own rules of trade and commerce.
Turkey raised the issue of Xinjiang and the Uighurs in a meeting with China this week. This move was historical as few, if any, Muslim countries have even dared to discuss this issue in front of China. In fact, in 2020, a letter endorsing China’s concentration camps included Egypt, Pakistan, Iran, and Saudi Arabia amongst other Muslim countries as signatories.
Either they know something that the West doesn't, or that even God can be sold at the right price.
A pivotal week for the future of the United Kingdom?
Decades from now, we may look back at this week as the historical moment that decided the future of the United Kingdom.
The week started with Nicola Sturgeon, Scotland’s first minister, being cleared of charges that she had breached the minister code and misled the Parliament in a briefing.
The issue related to a meeting dating back to March 29, 2018, when Sturgeon was first informed of sexual charges against Alex Salmond, Sturgeon’s mentor and former first minister. Later, when briefing the Scottish Parliament, Sturgeon indicated that she was not aware of any claims against Salmond until April. Now, an investigation cleared her of any wrongdoing and accepted her version that “she had simply forgotten about the March 29th meeting”.
Salmond announced that he is forming a new pro-independence party to challenge for seats in the upcoming 2021 Scottish Parliament election. But Sturgeon’s Scottish National Party has already stated that they will seek another referendum if they win. The Green Party also has thrown its support behind independence. So what happens now?
The Conservative and Labour parties are hoping that this move would split the pro-independence faction. This remains a possibility. But they should also be aware that a new party could throw everything into disarray. In 2014, Nigel Farage led the UKIP party to mainstream status. This forced David Cameron to counter by shifting the Conservative party’s policy to include a referendum that ultimately led to Brexit.
Whether Scotland’s pro-independence faction will win the majority may eventually come down to the drama featuring these key personalities: Nicola Sturgeon, Alex Salmond, and of course, Boris Johnson, the UK Prime Minister.
Most people distrust politicians, and yet, ironically, it may be our perception of a few politicians that may shape the future of one country.
This article is part of the Making History This Week series.