Policy Article

Risk, resilience and recalibration in global value chains


Current global value chains are highly efficient, specialized and interconnected, but also highly vulnerable to global risks. The COVID-19 pandemic has been a stark demonstration of this point, causing supply-side disruptions in the first quarter of 2020, as China and other Asian economies were hit by the outbreak of the virus which eventually spread globally, leading to business closures around the world. The ensuing supply chain breakdown prompted policymakers in many countries to address the need for economic self-sufficiency, along with strategies to better deal with global risks, even at the expense of the efficiency and productivity gains that globalization has brought.