Impact of Blockade and COVID-19 on the Supply Chain of Qatar
COVID-19 is spreading through the developing world. Many low- and middle-income countries are now reporting growing numbers of cases and imposing rigorous lockdown regulations in response, which impact all aspects of the economy. How will COVID-19 affect food-supply chains (FSCs) in developing countries?
Qatar’s efforts in response to the 2017 rift prepared the country particularly well, although we need to see that this diplomatic crisis, and the current coronavirus situation, have very different contexts. The blockade intended to isolate Qatar “outside-in”, and forcefully cut the country off from its neighbours. Today’s situation is seeing states choosing to isolate themselves “inside-out”, to decelerate the spread of Covid-19 and safeguard the well-being of populations globally. The effects of both events are, however, alike, especially from a logistics and supply chain perspective. Qatar handled the circumstances of the blockade extremely well, which has shaped the country as it stands today. First, Qatar now has a supply base that is more diversified than it used to be three years ago, while for instance, only four countries accounted for more than 90 percent of its milk and dairy product imports before June 2017. The next period saw the number increase to more than 24 countries making up the supply base. In the milk and dairy sector, Qatar meanwhile is overly self-sufficient, with the capacity to even export to customers abroad. Qatar is less dependent now on any single country to secure its supply. While in the pre-blockade years, one country could be the origin of much more than 30% of the imports of a needed product, the volumes today are strategically managed, ensuring that dependency on one supplying country always remains below 30%.
Generally speaking, in the aftermath of Covid-19, we will all have to question the resilience of our supply chains and cut them shorter, even if that means paying more at the till. While in Europe and the US we do not have the luxury of a rentier state heavily subsidising local production and consumer goods pricing, the case of Qatar still offers lessons for how supply chains can be diversified and localised - not least for products that are essential in a public health crisis such as this.