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the big grain of sand of globalization

The giant freighter blocking the Suez Canal threatens to disrupt trade between Europe and Asia. Nicolas Barré takes stock of a current economic issue.

It will take days, perhaps weeks, to clear the giant cargo ship blocking the Suez Canal and threatening to disrupt trade between Europe and Asia.

Perhaps you have seen these maritime charts in real time where one sees forming a formidable traffic jam of hundreds of ships which congregate at the northern and southern entrances of the canal. The blockage of the Suez Canal, we can see it live, it is a very large grain of sand in globalization. With each passing day the economic cost of this unlikely event increases. Imagine: blocking the canal costs $ 400 million per hour, according to Lloyd’s List, a specialized maritime publication. And, incidentally, deprives Egypt of one of its main sources of foreign currency: the canal brings it five billion dollars, three times more than American military aid.

It is no exaggeration to say that this blockage has planetary consequences.

Every day, nearly $ 10 billion of goods pass through the canal, about five billion each way. It is the main artery of trade between Europe and Asia. To cut it is to disrupt all the irrigation of trade flows between the two largest economic and commercial zones on the planet. We have to redirect the flows, make a huge diversion of several thousand kilometers around Africa. Every day, two million barrels of oil, mostly Russian, flow through the canal to supply fuel to Asian economies. A vital link for these countries.

This event also shows that it doesn’t take much to disrupt the entire economy.

We saw it with the virus which, in a few months, destroyed all the savings on the planet and cost trillions of dollars. There, it was a simple gust of wind that rocked this huge cargo ship. A gust of wind that costs billions every day. Irony of the story: to get by, we count on another natural event, the tide, because there will be high tides on Sunday and Monday, hoping that it will allow to free the cargo ship from the sand in which it is. retained. You can see that makes it modest: it doesn’t take much to derail this extraordinary precision mechanism that the global economy has become. A disruption at one point in the chain, missing components, a delay in the tight flow of parts and raw materials, and the whole system crashes. The more complex it is, the more the risks are multiple and unpredictable. Like a gust of wind …

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