Abstract business background.

Scattered incidents around the world, and our first economic analysis...


Republic of the Philippines

* One IED exploded in the barangay of Kulay Bato, while police defused another, in Lamitan City, in the southern island province of Basilan.




* A 20kg/44lbs landmine was defused and a Naxalite camp was overrun by police forces in the Chatra District of Jharkhand State, today. The Naxalites in the camp fled at the approach of the police. Bomb disposal teams discovered and defused the landmine on the approach path to the camp.


* Security forces have apparently trapped a small group of militants in the Batapora area of the Pulwama District of the hotly contested state of Jammu & Kashmir in India's extreme north.



* At least 10 people were killed and over 20 wounded when a bomb exploded near a security checkpoint situated close to the Karkhano Market area on Tuesday, in the northern city of Peshawar. The so-called "Pakistani Taliban" have reportedly claimed responsibility.



Normally, MilitaryGazette reports on, well..."military" things. However, the military universe is not solely guns, tanks, planes, ships, shootings and bombs. In fact, it encompasses every field of human endeavor. Economics looms large in any discussion of war, and while not the normal focus of this magazine, this is one of those times where we will diverge for a moment, and study a seemingly "non-military" story.

On January 18, the Baltic Dry Index (BDIY) fell to under 400 for the first time in its history. As an indicator of the health of the world economy, this is very worrisome news, as the last time the index fell off a cliff, it was 2008.

But, so what? What does this have to do with the price of a T-72, and why should you care?

BDIY is important, because one of its primary indices tracks the market cost of bulk shipping -- the movement of large, undifferentiated masses of cargo. Like: raw ores, grains, cement, coal, fertilizer...oil. BDIY is not about the cost of the item, itself, but about the cost of moving that item from point-of-loading to point-of-unloading.

If the price of bulk shipping falls too low, carriers will have no choice but to start idling hulls in order to save money, and (hopefully) raise the price of shipping back to a survivable level. The problem, for us 'military types'? This immediately begins to remove slack from the world's transportation system. While that is normally not a big issue, obviously, the world is highly volatile - in a very literal sense - at the moment...and with less and less slack in the system, the impact of any maritime disruption is vastly magnified.

This is an issue, both for where the reader currently sits, reading this, but also, for those areas the reader is paying close attention to, far, far away. While most states can grow enough food to feed their populations, most of those same states do not do so -- instead, they grow large-scale crops, to sell in the world market, and import large percentages of their daily food consumption. This is made possible by the miracle of just-in-time-delivery.

However, one of the chief goals in any strategic military campaign is to make the enemy panic and waste efforts supplying his own population. Taking in the slack of the bulk freighter industry makes it immensely vulnerable to what would normally be a minor disruption - say, by blocking a major canal, or surreptitiously mining a major shipping lane or three. And state - or non-state actor with resources - could do this easily.

In short -- prepare for short-term disruptions in the supply chain now, while there is still slack to take in.

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