Malaysia: Malaysia remains on solid footing due to its inclusive and long-term economic strategy despite geopolitical tensions in the Middle East raising concerns over the potential closure of the Strait of Hormuz and disruptions to global energy supply. The Investment, Trade and Industry Ministry’s bilateral economic and trade relations division director, Raveendran Nair, said Malaysia’s consistent approach of diversifying into new markets has allowed the country to stay competitive and resilient against external pressures.

According to BERNAMA News Agency, Raveendran Nair highlighted Malaysia’s ability to navigate major challenges such as the Asian financial crisis, the US financial crisis, and the COVID-19 pandemic. He emphasized that during the pandemic, Malaysia managed to recover and move towards a progressive recovery trend in the post-pandemic era. Speaking at Universiti Kebangsaan Malaysia forum Bicara Persada – Iran-Israel War: Implications for Malaysia and the New World Order, he noted that retaliatory tariffs imposed by the United States do not pose a significant threat to Malaysia’s economy because other countries are similarly affected.

Raveendran explained that while there are concerns about the impact of these tariffs on Malaysia’s economy, the country remains competitive compared to its neighbors. In Southeast Asia, Singapore faces a 10 per cent tariff, the Philippines a higher rate, and Malaysia a 24 per cent rate. However, some neighboring countries face tariffs as high as 30 to 40 per cent, giving Malaysia an edge in terms of competitiveness.

He further noted that Malaysia’s trade with the US constitutes only about 13 per cent of its total trade, with the rest involving various global markets. Malaysia’s strategy of not depending on a single country is reinforced by frequent international engagements led by the Prime Minister and MITI to conduct business programs and attract potential investors.

Malaysia is also actively signing free trade agreements (FTAs) to bolster trade connectivity and open up opportunities for national exports. Recently, Malaysia signed the Malaysia-European Free Trade Association agreement and has resumed FTA negotiations with the European Union and Gulf countries, with a total of 18 FTAs established with various nations.

Regarding tensions in the Strait of Hormuz, Raveendran acknowledged the potential impact on the global energy supply chain but reiterated Malaysia’s focus on strengthening its economic resilience through diverse trade networks and robust internal preparedness. He stressed that no country can survive independently without a stable supply network in the interconnected global economic landscape. The Strait of Hormuz issue gained attention following the Iran-Israel conflict, which drove oil prices above US$89 per barrel, marking an increase of over 25 per cent since April.