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Shoe molds and scuba divers: How natural disasters affect our supply chains

Thomas Farole's picture
Photo courtesy of ianmyles through a Creative Commons license

Available in ภาษาไทย

Like the massive earthquake in Japan earlier this year, the floods in Thailand are again exposing the vulnerabilities of fragmented global supply chains.

Last month, a team of economists from the World Bank’s International Trade Department encountered some flooding side-effects during a visit to the Indonesian production site for ECCO, a Danish company that manufactures footwear. In order to transfer production to the factory in Indonesia, the workers needed the specific shoe molds used in the Thai factory. But there was a problem: The Thai factory was under three meters of water.

Shoe molds and scuba divers: How natural disasters affect our supply chains

Thomas Farole's picture

A scuba diver in Mexico. Source: http://www.flickr.com/photos/akumaldiveshop/5824559898/sizes/m/in/photostream/Like the massive earthquake in Japan earlier this year, the floods in Thailand are again exposing the vulnerabilities of fragmented global supply chains.

Last month, a team of economists from PREM's International Trade Department encountered some flooding side-effects during a visit to the Indonesian production site for ECCO, a Danish company that manufactures footwear. The news from Thailand: the ECCO production site there was under three meters of water, a problem for shoe-making. In order to transfer production to the factory in Indonesia, the workers needed the specific shoe molds used in the Thai factory. These specialized molds would have taken several weeks to manufacture, which would have further delayed production. So ECCO hired scuba divers to enter the Thai factory and recover the molds. They then shipped them via air to other factories around the region, including ECCO Indonesia.

Shoe Molds and Scuba Divers: How Natural Disasters Affect Our Supply Chains

Thomas Farole's picture

Like the massive earthquake in Japan earlier this year, the floods in Thailand are again exposing the vulerabilities of fragmented global supply chains.

Last month, a team of economists from PREM’s International Trade Department encountered some flooding side-effects during a visit to the Indonesian production site for ECCO, a Danish company that manufactures footwear. In order to transfer production to the factory in Indonesia, the workers needed the specific shoe molds used in the Thai factory. But there was a problem: The Thai factory was under three meters of water.

These specialized molds manufactured in the Thai factory would have taken several weeks to manufacture, which would have further delayed production. So ECCO hired scuba divers to enter the Thai factory and recover the molds. They then shipped them via air to other factories around the region, including ECCO Indonesia.

Shoemakers are not the only businesses with drowned components. Automotive producers are also hiring divers to rescue molds from underwater Thai factories, according to the Financial Times. Honda, for one, has said it will cut worldwide production by 50 percent because of a shortage of specialty parts. Reuters reports that computer hard drive prices have

Prospects Weekly: Data releases suggests that capital good orders appear to be holding firm

Global Macroeconomics Team's picture
Recent data releases suggests  that capital good orders from developing countries  appear to be holding firm, despite heightened  uncertainty in the global economy. Sovereign bond spreads for emerging markets have narrowed recently, amid bolder attempts to address the eurozone debt crisis. While the decline in spreads is welcome, their sensitivity to events in Europe is worrisome.

Inflation Invasion? Thailand takes on higher global food and fuel prices

Frederico Gil Sander's picture

Higher prices have been making headlines in Thailand. Although wages and farm incomes are up, so are the prices of eggs, milk and fried rice. I am definitely feeling the pinch: the price of my favorite beverage—coconut water—has surged following a beetle infestation.

As prices go up, so does the pressure on the government to reign in the spiraling cost of living. But as we discussed in the recently released Thailand Economic Monitor - April 2011, the current inflation challenge is especially tough to tackle.

Jomtien, 20 Years Later: Global Education for All Partners Must Renew Commitment to Learning

Elizabeth King's picture

Twenty years ago when I was a relatively new economist at the World Bank, I was part of the Bank’s delegation to Jomtien, Thailand, where the heads of several multilateral development agencies, bilateral aid agencies, and leaders of 155 developing countries came together to declare their commitment to universal primary education.

I remember that the mood was upbeat—and not only because the venue was set along Thailand's sunny coast. There was a strong shared feeling that it was time to recommit to education as a basic human right, as highlighted by James Grant, the Executive Director of UNICEF at the time, and as a powerful instrument for reducing poverty and promoting development, as outlined by Barber Conable, World Bank President at the time. 

Educating 1+ Billion Girls Will Make the Difference for Women’s Equality

Elizabeth King's picture

The following piece is cross-posted at USAID's IMPACTblog, where World Bank Education Director Elizabeth King is a special guest blogger for International Women's Day.

This week we celebrate International Women’s Day and it’s as good a time as any to remind ourselves of the remarkable accomplishments toward achieving gender equality—and of the challenges that remain to ensuring that the 3.4 billion girls and women on our planet have the same chances as boys and men to lead healthy and satisfying lives.

This year’s International Women’s Day theme, “equal access to education, training, and science and technology,” is a powerful affirmation of the many benefits of educating girls, which come from improving women’s well-being, such as through better maternal health and greater economic empowerment.


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