Meengla
Elite Member
NY Times reporting that even a few more weeks of the Strait closure's wider and even worse impact globally. Iran has the leverage.
PS. Delivery of my Pakistani Passport is delayed because UPS saying due to Middle East crisis; I presume the shipment coming from Pakistan.
When the war in Iran started on Feb. 28, Asia expected to see serious, gradual impacts from losing access to a huge portion of the world’s oil and gas. But the conflict’s economic and social impacts have hit the region harder and faster than officials and experts expected.
Many countries across the Asia-Pacific are experiencing sudden jolts of disruption that they are struggling to manage, with some comparing the crisis’s breakdowns and scope to the Covid pandemic.
Even if there is a peace deal soon, the future of this industrious region that has driven global economic growth for decades will likely include months of canceled flights, surging food prices, factory pauses, delayed shipments and empty shelves for products long considered quick and easy to buy worldwide: plastic bags, instant noodles, vaccines, syringes, lipstick, microchips and sportswear.
Collectively, according to many officials and experts, if the war’s strangling of commercial traffic through the Middle East lasts for even a few more weeks, and uncertainty lingers, shortages could push several countries into convulsions of unrest, followed by recession.
Countless businesses are verging on insolvency. Governments are taking on enormous debt to slow inflation. By year’s end, in the most dire projections by the United Nations and others, millions across Asia could be pushed into poverty.
“The impacts are so rapid and deep,” said Phillip Cornell, a senior fellow at the Atlantic Council’s Global Energy Center who is based in Sri Lanka. “Just from a magnitude perspective, this is really very, very, very large.”
Resource scarcity tends to unleash dark forces in human psychology and capitalism. As the International Monetary Fund has noted, the world economy is slowing nearly everywhere because roughly a fifth of the world’s fossil fuels have been held back from the global market since the war started. Even if the Strait of Hormuz stabilizes tomorrow, it could take years for oil and gas output and shipping to reach fat prewar levels.
The Asia-Pacific has been the war’s first and worst zone of impact outside the Middle East because:
1) the Asia-Pacific relies more heavily on Middle Eastern energy imports than almost anywhere else in the world;
2) the massive regional economy is deeply integrated, with supply chains crisscrossing borders in ways that are heavily reliant on fossil fuels;
3) even before the war started in February, Asia’s energy capacity was falling short of demand. The backlog for energy generation turbines now affecting global data-center growth started with surging power demands from Southeast Asia’s industrial hubs.
Wealthier countries, including China, face less immediate risk, with bigger fuel reserves and budgets. But comfort is neither permanent nor widespread. The rest of Asia, excluding China, is responsible for as much of the global economy as the United States or Europe. And many countries in that group have been struggling more than is publicly known.
In interviews, farmers in Vietnam, laborers in India, innkeepers in Sri Lanka, drivers in the Philippines, and executives in Hong Kong and Singapore all sounded more worried than many of the region’s politicians, who are seeking to project a stoic calm that often understates the scramble occurring offscreen.
PS. Delivery of my Pakistani Passport is delayed because UPS saying due to Middle East crisis; I presume the shipment coming from Pakistan.
When the war in Iran started on Feb. 28, Asia expected to see serious, gradual impacts from losing access to a huge portion of the world’s oil and gas. But the conflict’s economic and social impacts have hit the region harder and faster than officials and experts expected.
Many countries across the Asia-Pacific are experiencing sudden jolts of disruption that they are struggling to manage, with some comparing the crisis’s breakdowns and scope to the Covid pandemic.
Even if there is a peace deal soon, the future of this industrious region that has driven global economic growth for decades will likely include months of canceled flights, surging food prices, factory pauses, delayed shipments and empty shelves for products long considered quick and easy to buy worldwide: plastic bags, instant noodles, vaccines, syringes, lipstick, microchips and sportswear.
Collectively, according to many officials and experts, if the war’s strangling of commercial traffic through the Middle East lasts for even a few more weeks, and uncertainty lingers, shortages could push several countries into convulsions of unrest, followed by recession.
Countless businesses are verging on insolvency. Governments are taking on enormous debt to slow inflation. By year’s end, in the most dire projections by the United Nations and others, millions across Asia could be pushed into poverty.
“The impacts are so rapid and deep,” said Phillip Cornell, a senior fellow at the Atlantic Council’s Global Energy Center who is based in Sri Lanka. “Just from a magnitude perspective, this is really very, very, very large.”
Resource scarcity tends to unleash dark forces in human psychology and capitalism. As the International Monetary Fund has noted, the world economy is slowing nearly everywhere because roughly a fifth of the world’s fossil fuels have been held back from the global market since the war started. Even if the Strait of Hormuz stabilizes tomorrow, it could take years for oil and gas output and shipping to reach fat prewar levels.
The Asia-Pacific has been the war’s first and worst zone of impact outside the Middle East because:
1) the Asia-Pacific relies more heavily on Middle Eastern energy imports than almost anywhere else in the world;
2) the massive regional economy is deeply integrated, with supply chains crisscrossing borders in ways that are heavily reliant on fossil fuels;
3) even before the war started in February, Asia’s energy capacity was falling short of demand. The backlog for energy generation turbines now affecting global data-center growth started with surging power demands from Southeast Asia’s industrial hubs.
Wealthier countries, including China, face less immediate risk, with bigger fuel reserves and budgets. But comfort is neither permanent nor widespread. The rest of Asia, excluding China, is responsible for as much of the global economy as the United States or Europe. And many countries in that group have been struggling more than is publicly known.
In interviews, farmers in Vietnam, laborers in India, innkeepers in Sri Lanka, drivers in the Philippines, and executives in Hong Kong and Singapore all sounded more worried than many of the region’s politicians, who are seeking to project a stoic calm that often understates the scramble occurring offscreen.
I do agree with your analysis and from all posts you make on here. A deal has to be made . Lot of “POSTURING” going on . Both sides need an off-ramp . Total Strait of Hormuz blockage is economic death for both sides. And political death for Trump.
