RESOLUTION EC 322

FORUM: ECONOMIC COMMITTEE

QUESTION OF: The question of diversifying supply chains

SUBMITTED BY: Paraguay

CO-SUBMITTERS:Algeria, Angola, Bahrain, Bolivia, Chile, Colombia, Denmark, ITALY, Jordan, Morocco, Spain, New Zealand, Qatar, Turkmenistan, United Kingdom, WTO (Trade), Yemen.

STATUSApproved

THE ECONOMIC COMMITTEE,

 

Recognizing the lack of diversification in supply chains all around the world which will affect the trade market in foreseeable future,

 

Reminding the fact if a catastrophe happens in a supply chain the results can be difficult to overcome because of the lack of alternatives,

 

Fully alarmed by the effects of the COVID-19 pandemic and how it affected the world economy,

 

Considering that the pandemic slowed down the process of the supply chains for companies because of health concerns, 

 

Aware of the possibility of future pandemics or other such events that could have similar negative effects as Covid-19 on global economies,

 

Emphasizing the importance of diversity in supply chains especially now when there are many concerning situations about supply and demand,

 

Acknowledging that administering billions of doses of the COVID-19 vaccines to the entire global population efficiently will involve hugely complex logistical obstacles along the supply chain,

 

Affirming that the solution is a combination of changes in the private sector strategies of chasing the lowest cost at any risk and a change in government lack of actions and the “laissez-faire” policy.

 

  1. Urges all member states to engage in a series of quarterly conferences with any additional meetings if required, to be determined by the status of the pandemic, discussing the topic and creating new alternatives and solutions for the lack of diversity in supply chains, as well as:
    1. organizing a conference with all UN nations discussing the main topics that will be discussed before the biannual assembly
    2. forming an emergency plan in case the pandemic continues for an unknown amount of time
    3. proposing a system about the LEDCs’ economic issues by getting monetary support from MEDC’s, the World Bank, the IMF, and the WTO;
  2. Suggests a new formation of an agency called Pandemic Supply Chain Organization (PSCO) in cooperation with the World Bank that will:
    1. secure supply chains crucial to the pandemic
    2. cooperate with World Trade Organization for this NGO to be a more impactful solution
    3. hire professionals that will work for this organization that will be tasked with:
      1. inspecting the companies that are sending products worldwide
      2. taking steps to start the global production of equipment that could speed up the process of obtaining data regarding the diversification of supply chains
      3. inspect the vaccine’s supply chains, and ensure that these respect the necessary transportation measures for it to remain effective
      4. ensure that Less Economically Developed Countries (LEDCs) are financially supported and have access to effective cures;
  3. Encourages another meeting with companies that have an influence worldwide and have an international market with the minister of commerce of the country, to keep up with their actions about supply chains such as but not limited to:
    1. questioning their approach of marketing worldwide and also while in an economic crisis keeping their economic condition stable
    2. stating the problem of unemployment and finding solutions to increase the efficiency of human workers
    3. creating advanced ideas about diversifying supply chains and discussing a new approach to be prepared if a mistake happens in a current supply chain;
  4. Urges companies and governmental organizations that are related to the alleviation of the pandemic to regard building resilience in their supply chain as their priority by:
    1. mapping their supply chain to have more visibility on all their suppliers and identify the riskiest link in the chain to avoid surprises in case of disruptions
    2. adding alternative supply sources to reduce the over-reliance on one major supplier, while diversifying geopolitically the sources of supply and production to avoid over-dependence on one region, or regionalization of at least a share of their sources of production or supply to avoid a sudden interruption in the shipments from distant suppliers
    3. recognizing that the strategy of “just in time” which implies ordering products as the need arises to reduce the costs of stockpiling goods is extremely risky and the necessity of increasing “safety stocks”;
  5. Recommends governments to actively implement policies to reduce their country’s dependence in critical sectors such as pharmaceutical and medical equipment industries by:
    1. Making safety stocks mandatory for industries that produce vital products to prevent shortages and reduce the countries’ dependence on foreign producers for drugs and medical devices
    2. Encouraging companies to regionalize or localize at least a certain percentage of their production. For that, incentives such as taxes and subsidies should be given to the companies. These measures would ensure that crucial industries are protected in times of crisis
    3. Implementing an active industrial policy, for countries other than LEDCs to encourage the development of national pharmaceutical and medical equipment companies to avoid the dependence on multinationals for the country’s supply of medicines or vaccines.