Global challenges require new approaches

Redwood comment
Published:  08 June, 2022
Map of China's Belt & Road

Mike Redwood examines some of the current challenges facing the leather industry across the globe, from geopolitical conflict to trade shows.

I have always interrogated the context before adopting or suggesting a strategy. Looking back notes from 2012 it was longer lives, technology, a more connected world, urbanisation and rising affluence in Asia and Africa that were driving change. 10 years and a pandemic, a war and some big political switches they have totally transformed.

What if China and the U.S. continue their decoupling? How will the world be able to pull the hundred million or more who slipped back into poverty during the pandemic, and avoid even larger numbers joining them in abject poverty if inflation and food issues remain?

Bill Clinton’s 1992 campaign slogan “It’s the economy, stupid” soon became a global mantra. In reality today politics drive many leaders and they are willing to take actions, often bizarre, that weaken economic growth to stay in power. So, the framework in which tanners work has totally changed. 

Over and above carbon emissions and biodiversity companies must consider Russia, gender rights, inflation, worried consumers, fragile supply chains while governments focus on energy security, poverty reduction and food security and the risk of opportunistic wars while Russia’s invasion of Ukraine is creating a distraction.

Queen’s jubilee  

The UK has spent four days celebrating a Queen who has reigned for 70 years, and I added a picture from her Silver Jubilee in 1977, showing us decorating the British Club in El Salvador where we had a memorable event.

By 1978 all expats had left as the Civil War kicked off, and even the owner of our shoe company and tannery moved to Costa Rica to run the company remotely. Yet El Salvador remains a great place to live despite the current well-publicised problems. We would still be there had the fighting not got too close with a close neighbour kidnapped and killed, our dentist shot and the substation at the tannery blown up.

A look into the future

Perhaps the war in El Salvador was showing us the future. Rich democratic countries found it too easy to tell others what to do and often got it wrong. That sudden shifts in western policy as when Jimmy Carter took over from Gerald Ford in the U.S. sends unsettling messages that we do not always recognise. 

In September 2021 El Salvador became the first country to make Bitcoin legal tender. Economists tell us this is a foolish move; a point emphasised by Bitcoin’s big fall in value in the recent weeks. Yet some commentators ask us to view this from another level. Many countries are becoming less than happy about being linked to the dollar and to the rich democracies, down to the ordinary citizens who object to the big cut taken by banks when remittances are sent from overseas family members – a huge income for most developing countries. 

The Economist tells us countries who clearly oppose Russia over the Ukrainian invasion hold two thirds of the World GDP but those who support Russia or are staying silent hold two thirds of the World Population. These include China, India, much of Africa and large parts of Latin America. This reflects an increasing concern about rich democracies, their governments and their capitalistic approach to business.

China continues to expand its influence and it is doing so with greater wealth and military power than it has had for many centuries. 

Whatever the outcome tanners will be trading in a new world

Russia appears to claim a right to recreate a self-defined “sphere of influence” by force. China’s use of trade and aid, along with its Belt and Road programme has been quietly creating strong links into many countries with an economy and military stronger than it has ever had. Even Russia with its fossil fuel programme and sale of weapons has many strong relationships. Whatever the outcome of the war, the likely famine, the energy crisis tanners will be trading in a new world.

The APLF will return in 2023 to Dubai and hold an October event in Thailand. These reflect the reality. We will see new centres of activity, new hubs. The luxury trade, which has been clever at surviving the recent disruptions sees Dubai as a potentially important future centre and Thailand is a perfect centre of the ten ASEAN counties where according to the APLF their “leather community accounts for over US$2.5 billion imports of raw hides, skins and leather, a number closely equivalent to China”.

These two events do not replace Hong Kong, but this wonderful location looks unlikely to fully recover from the problems created by its approach to covid and the reality of the new politics. And it is the reality we must live with. APLF is demonstrating the resilience we all need.

On that point those involved in the leather industry need to remind themselves of some key points, all based on taking a responsible approach to business:

  • Jobs provided in tanneries and in the use of leather to make products offer useful careers in all countries and play a major role in reducing poverty
  • Modern tanneries alone or in groups should be producing energy from their wastes and making a major contribution to global energy security, as well as climate change 
  • Leather has always been a sustainable material mixing utility with beauty in our lives. Today its major utility is its sustainability from its origins through its longevity, helping society reduce its use of fossil-based materials such as plastics
  • And generally speaking, leather makes people feel better.

While tanneries will have to work harder to ensure their individual security, we need to remind ourselves of the fact that our own resilience, properly secured will be a major help to saving society and the planet.

Mike Redwood

mike@internationalleathermaker.com

Follow Dr Mike Redwood on Twitter: @michaelredwood

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