Wednesday, March 31, 2021
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Bloomberg: The world is more fragile than we think – politics – reports and translations


It only took a sandstorm that resulted in stopping the flow of cargo containers and global oil shipments. The vessel “Ever Giffen”, which ran aground in the Suez Canal last Tuesday, obstructed navigation in the waterway through which 10% of the world’s trade passes.

In a Bloomberg report, columnist Chris Bryant says the situation is partly due to simply unfortunate ones: Egypt has expanded portions of the canal to allow ships to pass together in both directions, and to accommodate large tankers. However, the giant tanker “Evergiven” ran aground and jammed into a still narrow part of the canal.

In fact, the accident also sends a message that any civilization in the world, even if it is advanced, suffers from severe weaknesses. In the field of strategy and military matters, such obstacles are also known as “choke points”, and are often not considered in public life, except when a problem arises.

System designers work diligently to avoid these weaknesses, so that the fields of transportation, energy and communication networks can withstand any attacks or misfortunes. Examples of flawed design accidents are the crashes of two Boeing 737 MAX aircraft in Indonesia, October 2018, and in Ethiopia, March 2019, as a result of a programming error that led to incorrect readings being sent to the aircraft’s autopilot system.

The advances in technology and globalization were supposed to make us less vulnerable to this kind of problem. For example, it is understood that the Internet is a decentralized system and it is extremely difficult to penetrate, as is the case with the cryptocurrency (Bitcoin).

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Global infrastructure continues to suffer from surprising weaknesses. This may be a difficult matter to remedy, as the development of backup options (back-up) is very expensive and is not compatible with achieving abundant production.

Industries more focused

In some cases, Bryant says, the problem is getting worse, as industries become more concentrated due to corporate acquisitions. Moreover, there are a handful of technology companies that control a large part of our lives: Nokia, Ericsson and Huawei control about 60% of the market for communication equipment. The upshot of this is that governments are now more aware of the political and economic power of those in control of the choke points.

On the other hand, the Suez Canal, the Panama Canal and the Strait of Hormuz are places where container ships and oil tankers are forced to sail through narrow lanes.

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For decades, these waterways were known for their great strategic importance and for being vulnerable to military or terrorist attacks. Iran has long used the Strait of Hormuz to put pressure on foreign powers. There have been long discussions about finding alternative methods, but nothing has been achieved yet.

Weaknesses

One might excuse the vulnerabilities of natural causes, Bryant adds, but we should be less receptive to the vulnerabilities over which we have more control.

As for the energy sector, Bryant explained that in order for Germany to get rid of one of the weaknesses in Europe – which is that the continent gets most of its natural gas imports through pipelines that pass through the territory of Ukraine – Berlin has resorted to the construction of the Nord Stream pipelines 1 and 2 to transport gas from Russia. To Germany under the waters of the Baltic Sea. In finance, trillions of dollars of financial instruments in London are linked to the dollar reference rate for interbank borrowing (LIBOR), a system that a small circle of banks found shockingly easy to manipulate, until it was exposed in the years following the financial crisis in 2008. It is scheduled to expire this mechanism in June 2023, after it was scheduled for the end of 2021, but was postponed 18 months.

Likewise, Europe has long relied on the system of secure exchange of information and payments between banks, “SWIFT”, and on the US dollar, but the matter has become a subject of discussion in the wake of the disagreements between America and Europe over the backdrop of sanctions against Iran.

In the field of technology, there have been warnings over the years that the United States needs a “back-up” for the Global Positioning System (GPS), as it can be simulated or disabled. An alternative system has to be developed.

Weaknesses are clearly evident in the semiconductor field. The shortage of computer chips amid the “Covid-19” pandemic forced car companies to halt their production plans, a temporary stalemate, but belies the fact that very few companies can produce more chips or chips. Developed, due to technological challenges, and the huge costs of establishing foundries. The most important of these is the “Taiwanese semiconductor manufacturer”, which is located on an island under constant threat of invasion by Beijing.

The Dutch company, ASML Holding N.V., has a monopoly on machines used to make the chips. China’s inability to purchase the latest equipment from the company limits Beijing’s ambitions in the semiconductor industry.

None of these choke-point problems are easy to solve, and it is not just about geographical ambitions, but there are usually trade-offs between building more flexibility and efficiency.

• A handful of technology companies control a large portion of our lives. Nokia, Ericsson and Huawei each control about 60% of the communication equipment market. The upshot is that governments are becoming more aware of the political and economic power of those who control the choke points.

• For decades, these waterways were known for their great strategic importance and for being vulnerable to military or terrorist attacks. Iran has always used the Strait of Hormuz to put pressure on foreign powers. There have been long discussions about finding alternative methods, but nothing has been achieved yet.

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