World Grain - June 2022 - 72

FEATURE: GLOBAL PRODUCTION AND TRADE FLOW DISRUPTION
high food subsidies when public finances are already
severely stretched. "
Looking back into recent history, Stephens noted that
the last significant spike in food and fuel price inflation,
in 2008, triggered protests across the developing world,
culminating in the " Arab spring " and the removal of
leaders in Tunisia, Egypt and Libya.
" Ironically, those leaders who actively or tacitly support
Russia's actions in Ukraine are the most likely to
be negatively impacted by the supply chain disruption
and food and fuel shortages that Putin's war has unleashed, "
she said.
Climate change's impact
Climate change also has emerged as a destabilizing
force in recent years. The geopolitics of decelerating
climate change through a cut in fossil fuel emissions
already is being felt. Russia is a declining power by every
metric (diplomatic, economic, demographic). And
as Stephens pointed out, " the strategic and economic
value of its oil and gas reserves are being downgraded
by the global pursuit of net zero. "
Russia has attempted to reverse its decline and increase
its strategic relevance by resorting to land grabs
in Georgia, Moldova, Ukraine's Crimea - and now
with the attacks against all of Ukraine. The stage is being
set for an intensification of great power rivalry and
geopolitical competition.
Stephens' judgement is straightforward: " We can
expect to see more military incursions and conflict as
states that are economically reliant on fossil fuels try to
assert themselves before consumption declines. "
China's heavy clean-tech investments over the past
72
decade has made it hard on the United States, which is
arriving late to the dance. Stephens said the Chinese do
not see climate action as saving the ice caps, but rather
as an opportunity for Beijing to dominate the post-carbon
energy environment.
" In the world of clean energy, a new set of winners
and losers will emerge, engendered by competition for
raw materials and the control of supply chains, " she
said.
Translating geopolitical insight into business foresight
creates a competitive advantage for corporations.
To achieve this, Stephens reminded her clients that
" geopolitical risk should not be viewed as a standalone
risk, but one that impacts a wide-range of other
business-critical risks, which requires an integrated approach
to risk management. "
For example, if an internal audit function is auditing
supply chains, you would expect geopolitical risk factors
to be integrated into that audit. The same can be
said for cybersecurity, reputation, business continuity
and financial stability audits.
Stephens concluded that the corporate world increasingly
realizes the profound effect that geopolitics has
on business resilience and corporations are increasingly
seeking to manage these issues through the integration
of geopolitical risk into their enterprise risk
management frameworks.
Gordon Feller is a Global Fellow at the Smithsonian Institution/WWIC.
He may be reached at gordon@gordenfeller.com.
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June 2022 / World Grain / World-Grain.com
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World Grain - June 2022

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