What is it about?
Recent world events like Covid-19 and Russian aggression on Ukraine has called into question the reliance of many countries on global trade networks for critical medical products, energy and food grains. Many countries resorted to trade restrictions as a strategy to improve self-sufficiency. We provide a network vulnerability centrality measure to quantify if trade restrictions when practiced by many countries do in fact reduce their import vulnerability.
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Why is it important?
Severe shortages in critical medical products in the fight against Covid 19 pandemic was experienced by many Western countries such as EU 27. This was due to their over reliance on imports of these products from countries where low cost production was an objective pursued during the globalization of supply chains. Export restrictions in these products was a strategy for self-sufficiency. However, unless there is methodology by which changes in export strategies of trading partners is quantified for the system as a whole, it is not possible to assess whether such strategies work. Our network vulnerability centrality measure is useful to assess this and can be used to quantify the extent to which countries need to hold stockpiles of critical products.
Perspectives
Writing this article was a learning curve as a method I helped develop in the analysis of financial contagion and the assessment of the adequacy of capital buffers used by financial institutions to protect themselves from deleterious actions of counterparties has important lessons for vulnerability of countries in trade networks. We were able to extend the use of cascade models for trade networks in a new direction that is able to quantify the import vulnerability of countries and to assess adequacy of buffers/stockpiles of critical products. We hope this methodology will catch on.
Sheri Markose
University of Essex
Read the Original
This page is a summary of: EU27 regional trade networks for medical products in fight against Covid-19 pandemic: Quantifying vulnerability and self sufficiency in critical inputs, PLoS ONE, February 2024, PLOS,
DOI: 10.1371/journal.pone.0297748.
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