Red Sea attacks may have silver lining for Southeast Asia

When the Yemen-based Houthis started attacking commercial vessels in the Red Sea, the crisis brought to light the vulnerability of global trade chokepoints.

It re-emphasises just how susceptible the global supply chain is to disruptions. In a highly connected and integrated global economy, a disruption in one location can easily cause a ripple effect that rapidly spreads to the rest of the world. Setting up smaller manufacturing hubs within a region rather than just a few main ones offers one solution for supply chain disruptions and avoiding bottlenecks. Diversifying trading partners with a focus on intra-region trade is another.

For instance, Southeast Asian countries haven’t been badly affected by the Red Sea attacks as they maintain a healthy trade exchange between themselves and the Far East and Indo-Pacific partners. They are not too dependent on the West.

The Red Sea connects two primary chokepoints from the Suez Canal to the Bab el-Mandeb Strait and is one of the busiest maritime routes in the world. Its strategic location allows liquefied natural gas and oil transportation and is the fastest container transit between Asia and Europe.