External Affairs Minister S Jaishankar outlined a set of mantras for businesses and policymakers in a world where geopolitical tensions are increasingly affecting trade and supply chains.
"De-risking would be my biggest mantra, as you called it. And the second would be to diversify," Jaishankar said at The Economic Times World Leaders Forum.
Countries and businesses must assume that somewhere new risks will arise and be ready for that, the minister said. "The just in time era is over; and the just in case era is clearly in place," he said during a fireside chat with ET's Pranab Dhal Samanta.
Conflicts and Choke Points
Jaishankar said diversification should form a key part of how businesses respond to a more uncertain global environment and this strategy should be built into the plans. "We are finding a very distorted energy market, a very distorted fertiliser market, very distorted shipping. Because the choke points are creating distortions, I would say distrust and diversify, which is to assume that things may not go right, build it into your plans," he said.
On uncertainties created by geopolitical tensions, he said two major conflicts were now going on in the world. "One is in its fifth year, and the other, for all the ups and downs, there isn't really light at the end of that tunnel," he said.
"This is a world increasingly characterised by choke points, and choke points mean a country or a set of countries have established dominance or what they think is dominance in a particular field. They're willing to deploy that dominance partly because they think it's usable. It will inflict pain, and that they themselves are insulated from it, so they can handle the consequences of it," the minister said.
