Omicron: A Test Of Resilence

Global manufacturers have been facing a supply chain crisis since the start of the year. Just as it appeared that the situation was beginning to stabilise, the Omicron Covid variant reared its ugly head.

A World Health Organisation (WHO) drew from the Greek alphabet in naming the variant Omicron, as it has done with earlier variants of the virus. The WHO panel has classified Omicron as a highly transmissible virus of concern, the same category as the predominant Delta variant. The world first became aware of the new variant in early November, after a South African scientist flagged the emergence of the strain. Although Omicron’s actual risks are not yet fully understood, early evidence suggests it carries an increased risk of reinfection compared with other highly transmissible variants, the WHO said.

With the emergence of Omicron, economic experts have warned of disruption to global supply chains, and that ‘disruption risks are higher in Asian, particularly in the economies of India and Asean. During the Delta wave, for instance, they note that production activities in these regions were affected greater than in North Asia.

The source of global supply is primarily in Asia, where many countries are still confronting lockdowns and a challenging recovery from the Covid-19 pandemic. This has created tensions across global trade channels, manufacturing hubs and logistics networks

Fears of more pandemic-induced economic turmoil caused stocks to fall in major bourses around the world. The Dow Jones Industrial Average briefly dropped more than 1,000 points. The S&P 500 index was down 2.3%, its worst day since February while oil price dropped about 13%.

Although Omicron effects remain under study, analysts feel the variant would be a “test of resilience” to the global supply chains which has been battered by the Covid pandemic in the last two years.

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