Bring manufacturing back home

After the pandemic, I see many countries will try to bring manufacturing back to their home countries. They will want to shorten the supply chain. It will be reverse of globalization that has happened during the past three decades. 

This move will be driven by two factors. One is the need to create jobs in the home country. The other is to have security in the supply of essential products.

There will be greater emphasis on the security of food supplies. Many countries will build their agriculture. Governments will create stockpiles for food staples that has to be grown in other countries.

Businesses will still reply on overseas supplies for some of their raw materials. They will have to build inventories of their raw materials to prevent a disruption of supplies. For essential products, a bigger inventory will be required.

Governments are also likely to create stockpiles of essential materials and food.

To make local manufacturing viable, countries will have to implement tariffs on imports. We will see a return to a higher level of protectionism. World trade will reduce to some extent, but not totally. 

In the new economic order, I see more protectionism, less globalization, building of stockpiles of essential products, less world trade. 

Singapore will be badly affected by these trends, as we provide logistic services and have a small home market. We will have to adjust to the changes ahead. 

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