By Saraswathi Muniappan
KUALA LUMPUR, March 12 (Bernama) -- The latest disruption to global trade due to the United States-Iran conflict is hardly surprising.
What is happening there is nothing that we have not seen before as far as the narrative surrounding the disruption to international trade is concerned.
This time, however, it isn’t a virus or hurtful imposition of tariffs but a military attack by the US and Israel on Iran, a country in West Asia that has significant influence on shipping along the Strait of Hormuz -- the world’s most critical oil transit chokepoint.
The strait links the Persian Gulf to the Gulf of Oman and the Arabian Sea where about 20-30 per cent of global seaborne trade in oil passes daily.
Like any other conflict in a modern and intertwined world, this one is borderless too, with multi-country airspace being used for the war, flying drones and rockets creating chaos to the aviation industry.
Iran has retaliated to the American attacks by bombing US military airbases and refineries in 11 countries in the Gulf region over the past 12 days.
While some of the airspace is either fully or partially operational now, it will take days before air traffic backlogs are cleared with the timeframe depending largely on how long the conflict which started on Feb 28 with the bombing of Iran will continue.
Not only do tankers plying the route need to be rerouted but freight costs are also rising while the aviation industry is raising fuel surcharges.
Understandably, markets and logistics are reacting nervously to uncertainties amid an unsettled and already fragile global supply chain post-COVID-19 and the tariff war which disrupted supply chains.
But it doesn’t stop there. Governments are forced to resort to extreme measures to manage energy consumption.
Countries like Bangladesh, Vietnam and Thailand announced remote working as well as use of public transport as fuel-saving measures. Others, especially oil consuming countries, have increased pump prices.
Headlines on conflicts are changing at every blink.
But amid the ensuing volatility, the real story this time however, is not the disruption itself but the shifting centre of gravity in global trade from the onset of the tariff war.
It is evident that the global system has been fragmented into new alliances, new supply corridors and new economic partnerships that increasingly bypass traditional power centres of the North.
The current US-Iran conflict is hastening the process further.
As the world continued to be engrossed in the conflict in West Asia, China last Saturday quietly announced zero tariff on goods from 53 African countries, effective May 1, 2026.
This undoubtedly is a game changer in boosting trade between China and the African continent.
The move is not merely a trade concession but a geopolitical statement, especially coming from the world’s second largest economy.
Beijing is signalling that the future of trade may well be defined by South–South cooperation rather than the old North-driven frameworks.
Prime Minister Datuk Seri Anwar Ibrahim has been a driving force behind not only Malaysia’s South-South cooperation initiatives but also for ASEAN, with Putrajaya playing host to the regional grouping’s series of summits last year.
“An empowered Global South, as I see it, is inevitable,” the Prime Minister as chair of ASEAN said in exhorting the importance of emerging economies working together.
The Global South’s trade credentials are enviable. It currently accounts for around 40 per cent of the world’s gross domestic product and 85 per cent of the global population.
By 2030, three of the world’s four largest economies are projected to come from the Global South, with China, India and Indonesia among them.
As part of this strategy, Malaysia is now one of the nine partner countries in BRICS, an informal grouping of emerging economies. Its membership is fast expanding from the original five comprising Brazil, Russia, India, China and South Africa.
Anwar also made a landmark visit to three African countries last year, a testament to Putrajaya’s commitment to strengthening ties with the Global South and positioning Malaysia strategically as a trusted partner in an increasingly multipolar world.
But for the Global South to succeed, it has to be a collective effort.
Neither China or Malaysia can do it single-handedly.
The whole Global South community has to pull together in one direction.
The region should not merely adapt to the global trade order shift, but define it.
Disruptions in oil markets and shipping lanes may dominate headlines today, but beneath the turbulence lies a deeper transformation that will determine who sets the rules of tomorrow’s trade.
Asia has spent decades powering global and regional growth.
It is now time for the region to shape the global trade story for itself and determine its own destiny in a highly volatile international trading environment.
-- BERNAMA
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