A world in which every country compounded its own medicines and manufactured its own phones would evidently delight nativists and nationalists the world over. But it would equally disadvantage countries without an industrial base. They would not only be the source of the world’s new poor. They would just as well redefine the conditions for poverty.


The current global pandemic is challenging both thinking and practice across the world. Besides showing up unclothed emperors ― the response by the U.S.’ healthcare sector (the world’s most sophisticated and expensive) to the crisis has been everything but ― it has asked questions about the utility of large headquarters buildings and the future of the airline, hospitality, and automobile industries. While at these, it is suggesting completely new ways of working. In high science, it is inviting new collaborative techniques that may well abridge the time it takes new ideas to diffuse through the scientific community, democratise access to these ideas, and shrink the time-to-market for new medicines.

Still, it would appear that by far the bigger contribution of the pandemic is to the global economy’s medium- to long-term outcomes. Here, the salient question revolves round what these concepts ― “Strategic industries”. “Domestic resilience”. “Reshoring”. ― will come to mean. Meanwhile, the U.S. has designated its meat-packing industry a “strategic” one. As meatpackers succumbed to the SARS-COV-19 virus in that country, the industry’s supply infrastructure became threatened, even as shrinking demand has meant a build up of inventory across the chains. By designating the industry as strategic, the Trump administration is offering protection to businesses there, including from being sued by workers who fall sick from having to come to work, and working in conditions that make physical distancing impossible.

Ultimately, though, the Trump administration’s contemplation of the possibility of imposing punitive taxes on companies that continue to source their parts and raw materials from outside the U.S. promises a broadening of the concept of “strategic industries”. Globalisation had turned the world into a cat’s cradle of suppliers and logistics and freight managers. The off-shoring of supply chains to locations across the world where parts and raw materials could be produced at its cheapest was a boon for managing the global poor. On one hand, ensuring that communities in the developed world could afford the gewgaws that are the landmarks of our civilisation. While, on the other hand, keeping the poor in developing and emerging economies in employment that also allowed them higher levels of cultural and material consumption.

That was before COVID-19 showed up how dependent the world is on Chinese supplies. Not just of iPhone parts. But for face masks, personal protective equipment (China supplied almost half of the global market for this two years ago), and medicine compounds as well. If strategic industries are to have any meaning, therefore, as the emerging consensus amongst policy planners in the West seems to suggest, then it must be within the context of “domestic resilience”. Not autarky. But more the ability of an economy confronting a crisis as severe as the current pandemic to offer effective domestic responses.

The post-COVID-19 world would on this basis be a poorer one. Not only because the virus will final hurt demand and constrain supply responses. But even more so because of the policy responses to it. Over a longer term horizon, though, the market’s search for new efficiencies will dominate. It will matter then that the policy environment is able to channel the new animal spirits in a more egalitarian direction.


As part of this process, even Apple might have to return its production facilities to mainland U.S.A. The unwinding of globalisation was underway long before COVID-19, though. But this reshoring will lend it a wicked kick.

A world in which every country compounded its own medicines and manufactured its own phones would evidently delight nativists and nationalists the world over. But it would equally disadvantage countries without an industrial base. They would not only be the source of the world’s new poor. They would just as well redefine the conditions for poverty. For by reshoring, most companies will shun the cost gains from the previous round of offshoring and push the unit cost of most products beyond the purchasing power of most of their citizens. Especially if companies in the West automate their processes to walk around relatively high domestic labour costs.

The post-COVID-19 world would on this basis be a poorer one. Not only because the virus will final hurt demand and constrain supply responses. But even more so because of the policy responses to it. Over a longer term horizon, though, the market’s search for new efficiencies will dominate. It will matter then that the policy environment is able to channel the new animal spirits in a more egalitarian direction.

Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.

Image credit: American Institute for Economic Research.