Weak links in finance and supply chains are easily weaponized

A sign in Moscow displays currency exchange rates. Unpredictable economic consequences followed Russia’s invasion of Ukraine in February.Credit: Andrey Rudakov/Bloomberg via Getty

When Russia invaded Ukraine on 24 February, nobody expected that the United States, the European Union, the United Kingdom, Japan, Canada and other nations would isolate Russia from the global economy in retaliation. Instead of limited and largely symbolic sanctions, which were all Russia faced when it annexed Crimea and occupied eastern parts of Ukraine in 2014, this latest response has had devastating ripple effects.

Key Russian banks have been denied access to the US dollar, foreign reserves and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system, which banks use to relay financial information to each other. The United States and its allies blocked the export of high-end semiconductors to Russia’s technology and defence sectors, as well as software, oil- and gas-refining equipment and other items. As one US law firm put it, it is now illegal to knowingly supply a toothbrush to a company that occasionally helps to repair Russian military equipment.

Russia’s economy is reeling. The value of Ukraine’s currency, the hryvnia, has been knocked flat by the war. No one knows what will unfold.

The biggest surprise is how this has been done — by weaponizing the networks that bind the global economy together. Financial and supply networks have chokepoints, which powerful states can use to punish individuals, businesses and even nations. Some of these points are known; many have yet to be identified.

There has been too little academic study of these pressure points, however. Policymakers lack the necessary data to make informed decisions. Companies hold information on supply chains close; governments and the public don’t have an overview. Data on financial and information networks and their vulnerabilities are similarly patchy.

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EU to suggest eco-friendly expense label for fuel and nuclear vitality, supply claims

BRUSSELS, Feb 1 (Reuters) – The European Commission is set to propose policies on Wednesday to allow for some gas and nuclear power vegetation to be labelled as environmentally friendly investments, with small modifications to a previous draft proposal, a Commission supply told Reuters.

Brussels has been trying for extra than a yr to settle no matter if gas and nuclear vitality ought to be labelled as eco-friendly in the EU’s taxonomy, a rulebook that defines which investments can be promoted as local climate-friendly.

In closing principles thanks to be printed on Wednesday, the Fee will validate programs to label the two fuel and nuclear electricity plants as sustainable investments, provided they meet specified standards, a Fee resource mentioned on problem of anonymity.

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A Commission spokesperson declined to comment.

The criteria are envisioned to involve slight modifications that could make it easier for some gas vegetation to get paid a green financial commitment label in contrast with the past draft.

The draft would have granted fuel crops a eco-friendly label till 2030 if they meet up with conditions which include emissions boundaries, and a prerequisite to progressively burn off a lot more small-carbon gases, starting in 2026 and inevitably switching to 100% reduced-carbon gasoline in 2035.

The last principles will include the 2035 minimal-carbon gas requirement, but not the 2026 rule, the supply explained.

A draft rule that new gas vegetation replace a a lot more-polluting facility and outcome in a 55% emissions reduction for every kWh of output power, will alternatively use the 55% reduction to the plant’s overall life span, they mentioned.

The rules have not but been adopted by the Commission and could adjust ahead of they are thanks to be posted on Wednesday.

The prepare has

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Big Business Games the Supply Chain

This article appears in The American Prospect magazine’s February 2022 special issue, “How We Broke the Supply Chain.” Subscribe here.

Grocery store owner Jimmy Wright spent months stocking up for the holiday season. Since the beginning of the pandemic, he had struggled to maintain inventory at his sprawling store in east Alabama, and as the holidays approached, he anticipated that annual favorites—hams, gingerbread men, pies—would be in short supply. To prepare for the shortages, he began stockpiling products in early November, spending $70,000 on top of the $250,000 he usually devotes to inventory. The investment paid off: Wright’s Market entered the holiday season with goods that were sold out elsewhere, like cream cheese and cranberry sauce.

But this was a bright spot in an otherwise bleak couple of years. Since the pandemic began, manufacturing slowdowns, worker shortages, and volatile demand have dogged the grocery industry, forcing grocers to find new ways to stock their shelves. “We’ve just had to be creative,” Wright said. “When a product was there, we’ve had to try to buy all we could buy.”

Customers still frequent Wright’s Market, which is located five minutes outside of downtown Opelika, a small city of 30,000 that borders Auburn University. But Wright, who has run the market since 1997, said it’s never been so hard to stock up on inventory, and that the process of simply getting supplies overwhelms his employees. “My meat department man will start at about 3:00 every afternoon on the phone, and it takes him until 6:00 each night to call suppliers and see who’s got this, who’s got that,” Wright said. “It takes him about three hours every day, when it used to be maybe 30 minutes before.”

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