By Rajpal Abeynayake
Boris Johnson engaged British troops last week to get petrol across to the fuel stations in the UK, and this writer is waiting for the domestic whinge brigade of assorted political writers and other culprits to say this was militarization.
The world is experiencing an enduring supply chain crisis as a result of repercussions from Covid, and it is because there is no supply to meet demand, which is of course a grand recipe for inflation. It is not as if we in Sri Lanka have been insulated from this crisis. However, in many ways we are not in the soup that some of the richer countries are in, even though it is acknowledged the current situation is a struggle for many people in this country as well, most importantly the daily wage earners.
However so far we have had fuel at the pump and a steady supply of essentials with a minimum of inconvenience despite the lockdown.
In the UK the truck driver shortage is not a result of a lockdown – at least not a direct outcome of it. But, the Covid shutdowns have a lot to do with it. Many truckers could not get their licences renewed and a lot of them did not want to, because they realized that with new regulations with regard to health and safety. It was not a rewarding experience to renew their papers and continue on the job. Brexit also had something to do with it, with drivers from the rest of Europe being unable to live and work in the UK.
But when long lines were being formed at the gas stations the Government blamed the people for panic buying, and creating a shortage. But the causative factor was the trucker crisis and to cut a long story short, Premier Boris Johnson had to deploy the military to drive the trucks.
UK fuel crisis
Earlier in a classic rich country reaction, the Government there started issuing special three month visas to Europeans in Romania, etc., to come over to Britain and drive the trucks until the crisis was dealt with. Nobody came. They did not want to mosey over and work for three months and go back to Rumania or wherever, and find they had lost their full time jobs in the process.
The question that begs an answer is whether Johnson is militarizing society by deploying the Army? The query is largely academic. The British PM seemed to have no other choice so he got the military to do the job until the truckers’ problems are sorted.
In Sri Lanka, it seems, we deployed the military in a lot of situations before the problem started happening. It is why we have had no major hiccups with the vaccination programme or the supply situation, despite the Covid crisis. The supply of essentials may have seen some hiccups with a momentary gas shortage for instance, but it never hit the proportions of the fuel crisis in the UK where drivers had to queue for long hours at the pump or had to face a situation in which they couldn’t find any fuel at all.
Los Angeles, California is facing food and water shortages and a teacher crisis to boot, with no personnel to fill classroom teaching jobs. The food shortage there is mostly stemming from a supply crisis in the aluminum industry which has given way to a shortage of certain canned foods.
Supply crisis
Since production lines in most countries are short-staffed due to Covid-related restrictions, there is a massive supply crisis facing countries both rich and poor which is why some of the most advanced economies are looking inward these days to manage with products made at home, because international supply chains have been severely disrupted.
When this country asks for more self-reliance however, the whinge brigade is up in arms saying we are going back in time. What is good for France must be good for us though, and what is good for other countries such as the UK must be good for us too. It’s just that we were ahead of the curve. The British began ‘militarizing’ by getting the Army to drive trucks much after we got the Army to help out during the pandemic, for instance. Reliance on domestic produce was a theme here at the beginning of the pandemic, though in Europe and the Americas they are waking up to a home produce alternative after discovering that they are faced with considerable supply chain dysfunction.
The result is what is already being termed in the West as a resurgence of ‘economic nationalism’. So those who whinge about going back to the Bandaranaike era of home produce, did not even know what they are talking about. A former Assistant Governor or some such high ranker
at the Central Bank of Sri Lanka has written that this Government is going back to policies that have failed. She must be enjoying eating a good deal of crow after discovering that economic nationalism is the rage everywhere these days, particularly in the West.
Production has been disrupted in China as well, and consumers all over the world are looking either for the domestic alternative or goods manufactured elsewhere such as in alternate manufacturing hubs such as Vietnam – and yes, even Sri Lanka. These markets have to be targeted with specific orders in mind, but that does not mean the supply crisis would go away anytime soon and that is where reliance on domestic produce for a large part has to be the policy relied on, while making sure there is no perception that there are shortages of any commodity.
“Every crisis contains great opportunities, and the Covid-19 pandemic is no different. It offers developing countries nothing less than the chance to reinvent and reboot their economies – and to shake off the disabling legacy of external aid dependency,” writes Syed Munir Khasru, Chairman of the Institute for Policy, Advocacy, and Governance (IPAG).
That does not mean that these supply chain disruptions are here to stay. Things would revert to the status quo ante or robust international trade, but until then self-reliance has become a norm and in this country we seem to have struck a right balance. There is self-reliance but the import sector is still robust.
Non-essential goods
Central Bank Governor Ajith Nivard Cabraal said the Government decided to remove all restrictions imposed by it on the importation of non-essential goods, for instance.
The cash deposit restrictions imposed by the Central Bank on the importation of non-essential items was removed.
That is a great policy, because there is no fixation on self-reliance, and the effort made by certain commentators to stick the ‘Bandaranaike Era’ label on this Government is therefore seen to be the big lie that it is. Nobody is advocating that the robust market system that animated the global trade policy antedating the pandemic, should be reversed. The self-reliance mantra is temporary for rich and poor nations alike.
This is not to say that domestic business that innovates now would be abandoned later. What is needed is a mix, and local entrepreneurs who innovate should be able to sustain their innovations post-Covid when the markets open up. This could be done if the authorities treat this period as something more than an interregnum. The policies to make local industries sustainable have been spelt out, but they should be made to work when the markets open up.
All the commentators say is “we don’t want to go back to the Bandaranaike era.” The magnitude of their disconnectedness is mind boggling. Economies did not improve by being resigned to a policy of being swamped indiscriminately by imports. The punditry should be encouraging innovation, and not asking for a virtual surrender to imports that disappeared due to supply chain and other issues during the pandemic. We have come to expect pundits to be one track and wooly headed – but this mentality of aloof disconnected elitism is particularly egregious.
Source: dailynews.lk