In: Economics
Challenge: Single-country sourcing
Question: Effect of "Single-country sourcing" on Australian trade in the context of Covid-19 (500-550 words)
The Covid-19 pandemic challenges the single sourcing and single
supply chains of a country.The countries all over the world that
depends on lower supply chains are facing threat due to lower
availability of raw materials, and decline in supply chain.
Australia depends heavily on raw material and finished products
from China. The Covid 19 pandemic hard hits China and subsequent
political and economic restrictions and tension, because of China's
mishandling of pandemic. The Chinese products almost lost
confidence all over world, many MNCs and OECD nations began to
think beyond China. Australian production declines and trade
shrinks because of limited supply chains.
The single sourcing from low cost countries as in the case of
Australia results volatile foreign currency, reduction in quality
standards, decline in productions causes fall in employment.
The Australian government now adopt a policy of multiple supply
chains and moving towards other Asian low cost countries like
Indonesia, Vietnam, Cambodia , Bangladesh, India and several Latin
American Countries.
The economic policies of countries are drastically changing
after the pandemic. The Australian government introduced several
economic policies to restore the trade and extended ties with
several other countries for multiple supply chain. The threat of
decline in productivity due to supply chain problems along with
higher government expenditure in the wake of Covid-19propelled the
country to think beyond the traditional lines. The country began to
engage relations with other low cost trading countries so as to
insulate from bad economic situations.
Australian manufactured faced several problems due to decline in
supply chain transactions. It was a newer experience for the island
country. The international financial transactions will be
strengthening when multiple supply chains are there for a country.
The Australian prime minister called for a stabilization program
that aimed to maintain a sustained growth by incorporating various
supply chains keeping the growth targets live.
The COVID-19 crisis spotted the fragility and weakness of
Australian supply chains and also access to health care equipment
and related resources. The country was vulnerable to unexpected
shocks in supply chains that results from panic buying and the
prolonged pandemic related restrictions and lockdown all over the
country. In Australia, the demand was always for products and
services with the fast changing and trend setting consumer
behavior.
The one of the main problem of the country is that workforce in
supply chain, logistics and other distribution networks are ageing.
There is an urgent need to build resilience and changes in logistic
and supply chain work forces.
As a reaction to pandemic, closing large and main parts of
countries transactions, the interdependence and complementarily of
economies has created high level of disruptions to the supply
chains.
Australia is basically an import oriented and depends largely on
the global supply chain, and those products faces limits and
restrictions in terms of quality, time and cost during the time of
Covid-19 pandemic.
The country should adopt more in terms of strategies and planning
at the local and national levels to implement, create, design and
categorize our supply chains in order to prevent economy in
future.