South-east Asia faces Iran war fallout

Few parts of the world have been hit harder by the economic impact of the American war against Iran than southeast Asia. As countries in the region try to co-ordinate their response, the war has become a test of co-operation and solidarity. Southeast Asia faces Iran war fallout When leaders of the 11-member Association of Southeast Asian Nations (Asean) met at the weekend in Cebu, in the Philippines, it was for a scaled-back summit overshadowed by the Iran war. The meeting was dominated by the question of what to do about fuel shortages caused by the closure of the Strait of Hormuz and disruption in the Gulf, on which the region depends for most of its oil and many other critical supplies. The leaders agreed a number of measures aimed at improving co-operation on energy and food security as well as improving co-ordination during crises. They include a regional fuel reserve and a mechanism for food security to ease the impact of the closure of the strait and other potential events in the future that could affect the region’s supply of fuel and fertiliser. “We needed it last month. Forget about next month, six months, a year from now. We needed it yesterday, if not sooner, sort of thing. So, that’s the way we are approaching the problem,” Philippines president Ferdinand Marcos jnr said. When it was founded in 1967, Asean had just five members: Indonesia, Malaysia, the Philippines, Singapore and Thailand. The association now includes Brunei, Vietnam, Laos, Myanmar, Cambodia and Timor-Leste but it continues to make decisions based on consensus rather than majority voting. Most Asean member states are in some kind of security partnership with the United States, with the Philippines and Thailand having formal defence treaties with Washington. This has not protected them from the effects of the US war against Iran, which has pushed up prices across southeast Asia as the region suffers from shortages of fuel and fertilisers. Marcos acknowledged it was up to each country to make its own arrangements about how to secure fuel supplies but said they were working together to develop a fuel stockpile. Asean agreed 40 years ago to support each other’s oil and gas supplies during disruptions but the agreement was not ratified by all member states and has not come into force. A common fuel stockpile could follow the model of the Asean Plus Three Emergency Rice Reserve, which also includes China, Japan and South Korea. It involves stockpiling rice across the region for immediate release during disasters without affecting market prices. Some Asean countries already share electricity interconnectivity and the bloc wants to develop a fully integrated power grid system for southeast Asia. Singapore’s prime minister, Lawrence Wong, said the changing nature of the international order has made more urgent than ever the need for Asean countries to unite and work together. “It’s less about rules and more about power. It’s less about economics and more about security. It’s less about efficiency and more about resilience,” he said. “In this new environment, countries, individually, especially smaller and medium-sized economies will find it much harder to navigate these challenges. But working together as a bloc, Asean has a greater collective voice and has a greater ability to shape outcomes, and we are in a much better position to manage any disruptions and shocks together as a regional grouping.