LETTERS: THE United States and Iran greeted the new year with a sharp escalation in tensions.
While Iran forewarned Iraq of the attack and engaged with the US through backchannels to avoid casualties, President Donald Trump doubled down on his commitment to exert “maximum pressure” on Iran.
The impact on the Middle East’s already fragile stability is clear. How will this development impact Southeast Asia?
Spikes on oil prices frequently accompany instability in the Middle East.
Just after Qasem Soleimani’s assassination, oil prices rose to nearly US$70 per barrel.
While prices have since declined, one worry is that there will be targeted attacks launched against Arab-controlled oil production supply chains.
Singapore, Indonesia and Thailand are among the top 15 biggest importers of oil in the world, while the Philippines and Malaysia round up the top 30.
The International Energy Agency (IEA) expects demand for oil to continue climbing to meet the region’s macroeconomic objects.
By 2040, oil imports are expected to increase to 6.6 million barrels a day, up from 4.4 million in 2017.
Brunei, Myanmar, Indonesia, Malaysia, Thailand, Vietnam and Cambodia have oil subsidy policies to keep fuel prices affordable.
These measures are domestically popular and doing away with them will be politically costly.
Already, Malaysia’s Finance Minister Lim Guan Eng said the government would have to spend more to keep fuel prices low for consumers.
The region’s governments may be able to keep prices steady for now but an escalation in the Middle East risks rendering the policy unsustainable.
What’s more, Southeast Asian economies have found the unpredictability of the US-China trade difficult to navigate.
While they may not have been battered, trade uncertainty has been a net negative for the region.
Rising costs in petroleum-dependent industries will only amplify their economic problems.
If Iranian proxies target American interests, Arab states allied with the US will be in the crosshairs.
An escalation could disrupt weaker states in the region and compromise their ability to govern. Already, Iraq is expected to feel the brunt of the US-Iran conflict.
Iranian proxies may also target countries allied with Saudi Arabia in the Yemeni war. These include UAE, Kuwait, Jordan, Bahrain, and Egypt.
Similarly, the US and its allies will step up attacks against Iranian-linked Shia militias.
An escalation such as this can disrupt weaker governments in the region and catalyse the emergence of power vacuums.
It is a known fact that Iranian-sponsored terrorist organisations have been active in Southeast Asia.
In the 1990s, numerous Hizbollah plots were uncovered by intelligence services in Thailand and the Philippines, leading to several arrests of its operatives.
Hizbollah and Iran are believed to be maintaining sleeper cells throughout Southeast Asia.
Iranian-linked terror groups have preferred hurting the interests of their rivals rather than attacking public targets.
Should the US-Iran conflict escalate, their presence in Southeast Asia could enable them to target American or Israel’s strategic interests in the region.
This will heighten sectarian tensions between Southeast Asia’s Sunnis and Shia.
As it is, anti-Shia sentiments are widespread in the region, particularly in Malaysia and Indonesia.
Both countries declared Shia to be deviant. As recently as Jan 5, Sheikh Abdurrahman Ibrahim Al-Rubai’in, the religious attache at the Saudi Arabian embassy in Kuala Lumpur, said that Shia poses the greatest challenge to Muslims.
As far-fetched as the conspiracy is, many Muslims in Southeast Asia also believe that Iran has been attempting to change the region’s dominant practice of Islam to Shia.
In this context, acts of violence by Iranian-linked groups will further entrench this narrative and heighten sectarian tensions in the region.
Clearly, Southeast Asia will be on the losing end on many fronts if tensions escalate in the Middle East.
Thus, it would be prudent for Southeast Asia as a bloc to join the international community’s call for the US and Iran to de-escalate. The impending geopolitical, geo-economic and geo-religious challenges could pose significant security threats to Southeast Asia.
RAHMAN HUSSIN
CEO of RNA Consulting Singapore
The views expressed in this article are the author’s own and do not necessarily reflect those of the New Straits Times