It only took a sandstorm that resulted in stopping the flow of cargo containers and international oil shipments. The "Evergiven" ship, which ran aground in the Suez Canal last Tuesday, obstructed navigation in the waterway that 10% of the world´s trade passes through it.
Journalist Chris Bryant says in a report published by Bloomberg that the situation is due in part to simply unfortunate ones: Egypt has expanded portions of the canal to allow ships to pass together in both directions, and to accommodate large tankers. But the supertanker "Ever Giffen" ran aground and jammed into a still-narrow part of the canal.
In fact, the accident also sends a message that any civilization in the world, even if it is advanced, suffers from severe weaknesses. In the field of strategy and military matters, such obstacles are also known as "choke points," and are often not considered in public life, except when a problem arises.
System designers work diligently to avoid these weaknesses, so that the transportation, energy and communication networks can withstand any attacks or misfortunes. Examples of flawed design accidents are the crashes of two Boeing 737 MAX aircraft in Indonesia, October 2018, and in Ethiopia, March 2019, as a result of a programming error that led to incorrect readings being sent to the aircraft´s automated flight system.
The advances in technology and globalization were supposed to make us less vulnerable to this kind of problem. For example, it is understood that the Internet is a decentralized system and it is extremely difficult to penetrate, as is the case with cryptocurrency (Bitcoin).
Global infrastructure continues to suffer from surprising weaknesses. This may be a difficult matter to remedy, as the development of backup options is extremely costly and incompatible with the achievement of abundant production.
In some cases, Bryant says, the problem gets worse, as industries become more concentrated due to corporate acquisitions. Moreover, there are a handful of technology companies that control a large part of our lives: Nokia, Ericsson and Huawei of China control about 60% of the communication equipment market. The upshot of this is that governments are now more aware of the political and economic power of those who control the choke points.
This is one of the reasons behind the great concerns in the United States about Huawei’s participation in building 5G networks.
On the other hand, the Suez Canal, the Panama Canal and the Strait of Hormuz are places where container ships and oil tankers are forced to sail through narrow lanes, and the alternative is to travel much longer distances, or resort to air freight at its exorbitant cost.
For decades, these waterways were known for their great strategic importance and for being vulnerable to military or terrorist attacks. Iran has long used the Strait of Hormuz to put pressure on foreign powers. There were long discussions about finding alternative methods, but none of that has yet been achieved: there is a proposal to split the Nicaragua Canal linking the Pacific and the Caribbean, but the huge cost of $ 50 billion prevented implementation.
One might excuse the vulnerabilities caused by natural causes, Bryant adds, but we should be less receptive to the vulnerabilities over which we have more control.
As for the energy sector, Bryant explained that in order for Germany to get rid of one of the weaknesses in Europe - which is that the continent gets most of its natural gas imports through pipelines that pass through the territory of Ukraine - Berlin has resorted to the construction of the Nord Stream pipelines 1 and 2 to transport gas from Russia. To Germany under the waters of the Baltic Sea. The United States fears that this will weaken eastern Europe, and increase Germany´s dependence on Russia.
In finance, trillions of dollars of financial instruments in London are linked to the interbank reference rate (LIBOR) in dollars, a system that a small circle of banks found shockingly easy to tamper with, until it was exposed in the years following the 2008 financial crisis. It is scheduled to complete this mechanism in June 2023, after it was scheduled for the end of 2021, but was postponed 18 months.
Likewise, Europe has long relied on the system of secure exchange of information and payments between banks, "SWIFT", and on the US dollar, but the matter has become a subject of discussion in the wake of the disagreements between America and Europe over the backdrop of sanctions against Iran.
In the field of technology, there have been warnings over the years that the United States needs a "back-up" of the Global Positioning System (GPS), which can be simulated or disabled. An alternative system has to be developed.
Weaknesses are clearly evident in the semiconductor field. The shortage of computer chips amid the Covid-19 pandemic has forced car companies to halt their production plans, which is a temporary stalemate, but belies the fact that very few companies can produce the most advanced chips or chips. Because of the technological challenges and the huge costs of setting up foundries. The most important of these, the "Taiwanese semiconductor manufacturer", is located on an island under constant threat of invasion from Beijing.
The Dutch company, ASML Holding N.V., has a monopoly over the machinery used to make the chips. China´s inability to purchase the latest equipment from the company limits Beijing´s ambitions in the semiconductor industry.
None of these choke-point problems are easy to solve, and it is not just about geographic ambitions, but there are usually trade-offs between building more flexibility and efficiency. And strengthening supply chains is costly. But because the existence of reserve subsidies provides protection - and therefore it is a public good - there are those who believe that governments should play a role in providing it. For example, anti-monopoly policy can be employed against monopolistic practices and to promote competition.
Bryant concluded his report by saying that what we are witnessing about the "Ever Giffen" obstruction of navigation in the Suez Canal confirms that it is very beneficial to have backup support.
