Southeast Asian leaders seek strategy to ease impacts of Iran war

Southeast Asian leaders at a summit on Friday stressed an urgent ‌need to coordinate their response to the impacts of the Middle East crisis, as they aim to ease pressure from an energy shock that has ​rattled their oil import-reliant ⁠economies.

Meeting on the Philippine island of Cebu, leaders of the Association of Southeast Asian Nations (Asean) called for a ‌harmonised strategy to ensure energy and food security and ‌head off future crises in a region particularly exposed to a nearly 70-day blockade of the critical Strait of Hormuz.

The chair of Asean Philippine President Ferdinand Marcos Jr, said the fallout from the war in Iran had created a domino effect of disruption and highlighted the need for "foresight, coordination, and concrete and collective action."

"The recent crisis is ‌a stark reminder of how vulnerable our our economies remain to sudden shifts in the international order and consequently, the global economy." he said at a ⁠retreat of the leaders. "A few weeks worth of disruptions will take years to be corrected."

COORDINATION CHALLENGE

Asean economic ministers on Thursday "identified practical, concrete response measures" to ensure energy and food security, according to a statement, but the proposals lacked specific details.

They included diversifying suppliers and routes and developing a crisis communication protocol, but it was unclear what, if any, action might be taken.

Singapore PM Lawrence Wong and his wife Loo Tze Lui are greeted by Ferdinand Marcos Jr. and his wife Maria Louise Marcos in Cebu province. AP

The region, with a population of nearly 700 million people and economies worth a combined $3.8 trillion, faces significant risks from the Iran war, and the Philippines — among the first countries in the world to declare an energy emergency — has pushed for approval of a voluntary, commercial-based Asean oil-sharing framework ​agreement.

But coordination remains a big challenge for Asean. Despite rapid growth of its individual economies, integration has been slow, with vast differences ‌between its 11 members and no central authority to ensure compliance with Aseanagreements and initiatives.

Asean leaders stressed the need to create mechanisms to withstand future crises, with Indonesian President Prabowo Subianto, saying energy supply pressures were very high and would not ease anytime soon.

Cambodian PM Hun Manet, second from left, and his wife Pich Chanmony are greeted by Ferdinand Marcos Jr. and his wife Louise Araneta Marcos in Cebu. AP

"Asean must be ready for a long-term disruption. Our resilience must be built ⁠proactively with a clear forward-looking approach. This means we must be ready for any eventualities," he said.

In a reference to the South China Sea and the 900-km long Malacca Strait, the world's busiest waterway for international trade, Prabowo said it was vital Asean prevent trade route disruptions in its own backyard.

His remarks come just two weeks after ​his own finance minister made ‌waves by openly musing about ways countries could impose tolls on ships as a way to monetise the strait, before noting it would not be ‌possible.

PUSH TO RATIFY FUEL-SHARING PACT

The Asean leaders are expected to call for a negotiated settlement between the United States and Iran as well as a reopening of the Strait of Hormuz, a conduit for about 130 vessels a day and a fifth of the world's oil and gas supplies prior to the conflict.

Leaders will urge Asean members ‌to complete the domestic processes ‌required to approve a fuel-sharing pact, ensuring its "earliest possible entry into force", according ⁠to a working draft of a statement seen by Reuters on Thursday.

Thailand PM Anutin Charnvirakul, second left, and his wife Thananon Niramit are greeted by Ferdinand Marcos Jr. and his wife Maria Louise in Cebu. AP

Though the war has dominated talks in Cebu so ‌far, progress was made in other areas on Thursday, with Marcos calling a meeting of the leaders of Thailand and Cambodia amid a fragile ceasefire, resulting in an agreement to restart engagement after two rounds of deadly border conflict last year.

Foreign ministers also agreed to ⁠hold a virtual meeting with their counterpart from Myanmar, which is eager to normalise ties with Asean and allow its leadership to participate in its summits ​following a ban imposed after a 2021 military coup led to nationwide demonstrations that spiraled into civil war.

Reuters