An Emerging Market Crisis In Oil-Poor Asia?
Authored by Satyajit Das via NewIndiaExpress,
Reliable availability of cheap energy is, as the Iran war highlights, essential to modern economies and societies, at least for the foreseeable future. Shocks divide the world into the oil haves and oil have-nots.
Alongside higher energy prices, shortages of petrochemical derived chemicals will affect agriculture, mining, plastics, textiles, semi-conductors and construction. Given that even if the conflict was to end with a lasting agreement it would take months or years for restoration of normality, the effects are likely to be severe.
Europe, already affected by their decision to cut-off Russian gas supplies, and Japan, are affected. But the major consequences will be felt across oil poor South and East Asia.
The extent of the damage depends on pre-existing vulnerabilities, including insufficient currency reserves, poor public finances, trade imbalances, high debt levels, especially foreign currency denominated borrowings, reliance on overseas capital, narrow industrial bases, and poor contingency plans.
The Table below sets out some key vital statistics
Notes: all figures are mainly for 2025
For energy importers, supply disruptions work through several pathways. Import costs rise flowing through into the economy. It most ...
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