What is Considered A Strategic Resource?
For most nations, it is important to stockpile certain essential goods and resources such as oil, wheat, rice, and medical supplies – otherwise known as strategic reserves – because they may not be obtainable or may come at a high cost in times of national or international crisis. Nations with stockpiles of key resources are thus less susceptible to price spikes induced by international crises and can provide their citizens with essential goods at uninflated prices. Stockpiling goods in advance can result in a more equitable distribution of goods during a crisis at the international level as well, as opposed to the free market controlling the price of emergency resources and the highest bidders – most often richer countries in the Global North – snatching up the resources first.
A country’s strategic reserves can vary greatly depending on its ability to either produce said resource or purchase it internationally. Depending on the resource, it can take time to purchase enough of a good for it to be sufficiently stockpiled in the event of a crisis. However, stockpiling resources isn’t always a sure-fire solution, especially when the resource in question is not a physical commodity. For example, Russia built up foreign currency reserves prior to launching its full-scale invasion of Ukraine so as to avoid the worst of Western sanctions, which make it so that Russia would have to spend massive amounts to purchase any outside goods. However, due to the currencies not being accessible as a result of the freeze on many banks holding foreign currencies, the stockpiled reserves have not fulfilled their intended purpose: stabilizing the Russian currency. Thus some strategic reserves that are assumed to be secure under pressure turn out to be useless in times of need.
Historical Strategies to Protect National Well-being
Historically, resources have always been important to national security in times of conflict or disaster. During those times, rationing of resources was essential as often there was little time to stockpile in advance without preemptively rationing goods. This was so that a nation’s military would have the adequate resources required to continue its fight. However, as time went on, often the combination of a decrease in trade and the effect of rationing could hurt civilians immensely. The most prominent example of this was rationing during World War Two; many militaries required the sacrifice of civic consumption of goods necessary to sustain soldiers fighting in the war. These were often common goods that the military required large amounts of such as wheat, sugar, oil, etc.
Today, much of what threatens resource security at the national level is a breakdown of trade that would limit what is possible to import. In many countries, bread continues to be a staple food in a lot of people’s diets, so as the price of wheat continues to increase as a result of the invasion of Ukraine, a major exporter of wheat, many countries that imported wheat from Ukraine will need to consider increasing their stores of wheat and other grains to prevent unrest over volatile food prices. Thus, it is important for countries to at least have some emergency stockpiles in times of emergency.
Often rationing is the policy put in place when stockpiling is not able to supplement the consumption of resources when new supplies of resources are delayed. For example, the federal government of the U.S. found it necessary to have gas and oil rationed in the 1970s. Individual households were limited to when they could fill up their vehicle’s gas tanks. This was in response to the oil sale embargo against Western countries by the Organization of Petroleum Exporting Countries, an organization of oil-producing countries that works to stabilize the price of oil so its members can see consistent profits. In the case of oil, shifting towards renewable energy could lessen the high demand placed on fossil fuels and allow nations to maintain their own energy needs even in times of crisis, especially given that most countries are oil importers and thus are vulnerable to price fluctuations.
From then on, the U.S. found it to be of strategic importance to not be dependent on other nations for its energy consumption Fossil fuels are now a highly valued strategic reserve, especially among the members of the International Energy Association (IEA) which includes most of Europe, the United States, Canada, and Mexico. The association was created in response to the embargo as a method to combat the high prices. In addition, the U.S created petroleum reserves for national emergencies and increased domestic production of oil.
Strategic Reserves in A Globalized World
Given how much trade occurs among countries throughout the world, it is surprising just how critical reserves are in ensuring a country’s economic security. Given how unstable the international economy has been over the last few years, it may be worth considering whether there will be a shift in how countries secure strategic reserves to get through difficult times, especially while many countries transition to greener economies. This may mean more protection of resources needed in their economy to ensure that a country’s economy is not entirely dependent on the imports of important goods, which may ultimately transform the free trade system as we know it.
Edited by Chelsea Bean
