Governments are called upon to favor a “diversification of international supply”.
Relocating certain productions, as the United States or France wish to do since the Covid-19 disrupted global supply chains, could be counterproductive, underlines Tuesday in a report the IMF, which calls instead to diversify the country of supply.
Read alsoJean-Pierre Robin: “Faced with the energy shock, the solution of rationing resurfaces”
“Policy proposals to reduce dependence on foreign suppliers, especially in strategic sectors, have gained prominence, including in major markets such as Europe and the United States», Underlines the International Monetary Fund (IMF) in a chapter of its World Economic Outlook (WEO). “Such proposals could be premature or even misguided.“, say the authors of this report.
On the other hand, they call on governments to favor a “diversification of international supply and greater capacity for substitution in supply», that is to say the ease of replacing one product with another. Such an approach limits, according to them, the risks of a slowdown in growth in the event of a major event affecting production.
Shortage of semiconductors
“It is important to increase the resilience of the supply chain not only to health emergencies such as the pandemic, but also to other types of shocks such as the war in Ukraine, cyberattacks and extreme weather events linked to change. climatic“Alert these economists.
Read alsoThe relocation of suppliers, a priority for companies
“Dismantling global production chains is not the solution – more diversification, not less, improves resilience“, underline the three economists behind this report, Davide Malacrino, Adil Mohommad and Andrea Presbitero, in a blog post. They also argue for the reduction of trade costs and barriers other than customs duties – regulations, for example – to increase this diversification.
That “would provide a significant medium-term economic boost, especially in emerging markets and low-income developing countries“, they indicate. US President Joe Biden, for example, intends to repatriate part of the production of semiconductors in particular to the United States. The shortage of these electronic components essential to the manufacture of many products, including cars, has severely slowed automobile production and contributed to rising inflation.
This chapter of the WEO is published ahead of the Spring Meetings of the IMF and the World Bank, which will be held virtually from April 18-24. The IMF’s Global Economic Outlook will be released in full on April 19.