Competition for resources could threaten global stability

Competition for resources and sustainability pressures in developing countries could create instability in the global economy, a report has warned.

Research from the Earth Security Group warned more needs to be done to tackle cross-border sustainability issues that undermine the pace of growth in emerging economies.

It says multinational companies and governments should work together to make strategic investments in sustainability and resilience.

The Earth Security Index report looked at case studies of cross-border risk and resilience strategies for key commodities such as energy, rice, palm oil, cocoa, soybeans, timber and corn.

It identified seven priority risks including:

• China’s soybean demand and South America’s deforestation
• The impact of Germany’s energy revolution on Russia and Turkey
• India and Nigeria’s rice business as a driver of their food security
• Switzerland’s dependence on West African cocoa
• South-East Asia’s transboundary haze: health risk liabilities
• Converging interests in the Nile basin around food security
• Mexico’s food security and climate change in the USA

Alejandro Litovsky, chief executive of the Earth Security Group and author of the report, said: “Analysts and investors should be aware that beyond the common appreciation of ‘commodity super cycles’, future disruptions in the global supply of commodities will be linked to slow-burning sustainability pressures.

“Governments and businesses must anticipate these risks and cooperate across national borders to promote strategic investments in sustainability and resilience.”

(Source: http://www.supplymanagement.com/news/2015/competition-for-resources-could-threaten-global-stability#sthash.iC6oOx12.dpuf)