Admittedly, the global supply chain is a mess as Cameron Bagrie, Chief economist of Bagrie Economics, remarks.
With countries having to close borders and restrict normal inbound and outbound movements, delays in supply ought to be expected and have occurred.
Hence, a push by governments to promote buying locally to both support local business - to fill the gap in some of those supply shortages - and release pent-up consumption demand. With loose monetary and expansionary fiscal policy as well, the NZ government is doing its best to prop-up aggregate demand through government spending and encouraging firms to borrow to spend in the local economy.
However, this domestic focus does not mean a death knell for Globalisation and the benefits of cheaper prices through comparative advantage. While imports might be seen as a drain on the economy, those that give manufacturing, infrastructure and logistical output adds to our country’s ability to make, build and shift things - providing a return beyond the cost of those initial import payments through real growth in GDP, jobs and income. Moreover, outbound goods create export receipts which provide business and job security as well as tax revenue. A post haste recovery of the global supply chain is good for government coffers all over the world.
Consequently, Globalisation and its economic mechanism is far from dead. Though definitely on the mat, this is only short term and will rise again in the best interests of all countries, not just NZ. For more on this, click through to: https://www.newshub.co.nz/home/money/2020/06/coronavirus-global-supply-chain-s-absolute-mess-could-take-six-months-to-begin-operating-economist.html
