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Why is There a Scarcity of Coronavirus PPE in So Many Countries?

Editor, TRANSFIN.
May 8, 2020 6:36 AM 2 min read
Editorial

Across the world, the demand for personal protective equipment (PPE) has shot through the roof over the past couple of months. Face masks, hand sanitisers, goggles, gowns, gloves, nose-swabs, airbag-makers...items that used to be commonly available – and largely overlooked – have now become essentials that can be the difference between life and death.

Intuitively, we might assume that a surge in demand for a product would be met with a proportional increase in supply as well. However, as we all know, that is not the case. Virtually all countries are staring at depleting PPE stockpiles, rampant price-gouging and massive production backlogs of 4-6 months. And this is threatening millions of lives.

How Did It Come to This?

In extraordinary times, ordinary market logic tends to fail. There are many reasons why the world is facing a PPE shortage. For starters, the surge in demand has been just too cosmic for supply to keep up with. And even if there was abundant production, distribution streams are paralysed due to lockdowns: much PPE is internationally traded; this cannot be traded via airplanes and cargo ships right now.

And speaking of trade: before the pandemic, China was the world leader in PPE manufacturing – its share of surgical mask production alone was over 50%. But since January, its share of PPE exports has fallen 15% YoY even as its production of masks has increased 12-fold. This is because most items are going to domestic use.

China isn’t the only country keeping hold of what it has. The EU has restricted exports of essential goods to most non-members (some countries even temporarily blocked exports to fellow members). Some other countries (like the USA) have apparently gone one step further and redirected shipments of goods for other countries to their own.

A Way Out of the Madness

Desperate times call for desperate measures. Many countries are trying to ramp up PPE production by enlisting other industries. H&M, Canada Goose and LVMH are some fashion firms that have used their supply chains to deliver masks and gowns. General Motors has begun producing critical-care ventilators.

At the same time, contingencies have been enacted on an individual level too. During coronavirus doctors in India are using raincoats and helmets in place of N95 masks. Healthcare workers in the US are creating PPE using office supplies. And on April 17th, UK officials said some Personal Protective Equipment may now be reused rather than discarded.

FIN.

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