GLOBAL ISSUES

To the outsider, the supply chain can seem a bland, even mundane element of the modern world. It certainly doesn’t get the fanfare of other industries such as the arts, politics, or infrastructure. Yet to the insider, that is those who work on and within it, the supply chain comes alive both in its significance and its raw power.

We saw this on display during the Covid-19 pandemic, while the majority of the globe’s population merely thinks about the endpoint that they receive a product – being a shop, an e-store, or local market, suddenly, when the world went into lockdown the supply chain became front and centre of global news.

Why? Because when the supply chain buckles, everything shakes. We can understand this via the simple shock of seeing empty shelves in a supermarket, or via the vast abstract enigma of the global economy. When trade stops flowing, markets get spooked, meaning investment and borrowing ceases, meaning value spirals. When we understand the supply chain through this lens, rather than as a distant containership we see on the horizon at the coast, we understand it for what it really is – a plethora of vital veins and arteries in the vast network of human civilisation.

With this in mind, this piece looks at the big global issues affecting our times, which is so important because each will have a major impact on the supply chain, and if we can understand the impending challenges our world faces, the more we’ll be prepared to handle them when they arise.

1Sustainability: Regulation & Change

Recent years have seen a focus on climate change massively ramp up, with a series of meetings of global leaders and states in which new regulations have been drawn up. The next time we’ll get a very clear mandate for the future will be at COP28, which is being held here in Dubai. One of the key considerations for this will be the return of the implementation of the UN’s Sustainable Development Goals (SDGs).

The UN’s SDGs were a pre-pandemic measure of 17 areas in which sustainable working methods and strategies could be fostered, yet with the pandemic, they were blown off course. COP28 is likely to see the resurgence of these goals and a legal framework to ensure they’re implemented. Another key area of environmental development is the ongoing global stocktake, in which nations around the world can monitor their progress and build an idea of what demands will be needed in the future. COP27 in 2022 (held in Egypt) also saw the development of a “loss and damage” facility intended to provide support to countries already experiencing the consequences of climate change. This, combined with the launch of the Secretary-General’s Early Warnings for All initiative, represented important steps in 2022 to address the harms of climate change, which are disproportionately felt in developing countries.

2 Geopolitical Uncertainty (A New Global Order?)

2022 headlines have been dominated by the Russian invasion of Ukraine and the ramifications this has caused. The first and most obvious is the huge turbulence in the energy trade given Russia was a huge provider of gas to Europe. Given the West has collectively condemned Russia’s invasion, this has led to something of a stalemate which is in turn hiking prices in certain regions (while reducing them in others), causing great uncertainty in markets, and ultimately leading to a global recession.

While the human cost has been terrible, and the economic effects will have and are having a big impact on global trade flows, perhaps the most impactful, and least explored, angle on the current conflict is whether we’re experiencing a shift in the global power balance. With Russia’s invasion of Ukraine, and China and the US sparring over Taiwan, one could be forgiven for noticing how China, the world’s only other superpower along with the US, and Russia, a historic superpower with a vision to reestablish itself at the top table of global politics, feel emboldened enough to act in a more forthright manner.

For many decades now, the US has been so dominant that it’s effectively been able to take the role of a global policeman (much to the chagrin of many countries), yet Russia has hit back at the US and its Western allies for its “hypocrisy” in its condemnation of the Ukrainian invasion, referencing the invasions of Iraq and Afghanistan. This all points towards a shift in the power balance that could be on the cards.

In fact, President Putin recently said to Chinese Premier Xi Jinping “change is coming” during a filmed warm goodbye after a recent meeting with the leaders. What that change looks like is beyond the scope of this article, as is whether US power will lessen to such a level meaningful change will even occur; these are the questions we’ll see unfold. The point here is that the restructuring of the global power balance could be on the cards, and it’s worth closely monitoring to understand new ways of working, new markets to explore and new mandates that will fall upon nation-states.

3 Integration & Inclusion

As the world becomes increasingly globalised, with peoples and cultures intermingling, the importance of inclusion has grown in prominence to ensure equity in operational systems. Yet another, more political dimension of this, is integration.

Integration aims to ensure a dialogue across the global community, meaning peoples, countries and nation-states are all heard and respected. This will be a key focus of the UN’s Summit of the Future in 2024. There, nations will begin negotiating key elements as proposed in the UN Secretary-General’s ‘Our Common Agenda Report’, released in 2022. These include a new agenda for peace, a global digital compact, and a declaration on future generations.

A preparatory ministerial meeting at the UN General Assembly next year will offer leaders the chance to make a down payment on this ambitious set of proposals on the future of multilateralism. Beyond the UN, India plans to use its G20 presidency to focus on multilateral reform and Japan has similar plans for its G7 presidency. We should also expect to see more serious efforts to make the multilateral system more inclusive and responsive to 21st century challenges, including across the UN Security Council, World Bank, and IMF.

Making the most of the opportunity at hand in 2023 will require a clear and honest look at where the world is off track without becoming hopeless about the scale of the challenge. Without doubt, global cooperation will be tested in new ways in the year ahead, and the urgency required to meet the 2030 deadlines will be laid even more bare. As humanitarian, health, and climate crises rage on, the world’s leaders will need to choose solidarity and step up for people and planet in unprecedented ways before the clock runs out. Far too much is at stake to make any other choice.