DAVOS: Global supply chains must be driven by market dynamics and not politics, Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef told the World Economic Forum on Wednesday.
“It’s OK to have politics address areas of national interest and security, but it has to be at a minimum scope,” he said.
The minister elaborated on the Kingdom’s Vision 2030, which aims to diversify the economy and position Saudi Arabia as a trade base for companies such as DHL.
“Saudi Arabia offers a great combination of enablers such as natural resources and our geographical location. We need to discover new areas where there is development, where there is a competitive way for supply chains to be implemented, rather than doing it from a political view,” he added.
CEO of DHL Germany, Tobias Meyer said disruptions in the Red Sea are not the only thing impacting supply chain activities.
“After COVID, we learnt that it’s not typically one factor that leads to a shortage of global transportation capacity; that has rarely happened in the past. Most disruptions occur from manufacturing issues, not transportation concerns,” said Meyer.
Meyer said a cumulation of issues such as climate change, geopolitical tensions and societal influences lead to disruptions in supply chain activities.
Alkhorayef said Saudi Arabia has a communication channel between companies and government to learn how to build policies that balance national interest and foreign involvement.
“When it comes to green energy, Saudi Arabia has a lot to bring to the table; it is our job now to make sure the right partners enter the country to ensure the ecosystem built makes sense for everyone involved,” the minister added.
Meyer was asked about regulating supply chains and the EU policy that holds companies fully responsible for the whole supply chain.
“The objective of the policy is understandable, however its implementation is not reasonable. From a geopolitical perspective, this is problematic because you are impeding on the sovereignty of regulation of other countries. If one block says their rules apply to everyone else without consulting any country, there is a geopolitical impact,” he said.
