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[Editorial] More signs of risks

Escalating conflicts in the Middle East might mean trouble for S. Korea

Jan. 22, 2024 - 05:30 By Korea Herald

Last week, South Korea’s policymakers noted their alarm at the risks of military clashes in the Middle East that spin out of control, dragging more nations in the region into complex conflicts and hurting weakened supply chains further.

On Tuesday night, Iran carried out a missile and drone attack on what it called “terrorist” targets in Pakistan. In response, Pakistan struck militant targets inside Iran on Thursday.

The tit-for-tat attacks, the biggest cross-border intrusions in recent years, ratcheted up tensions in the Middle East. The region has remained unstable since Oct. 7 when Hamas attacked Israel, killing 1,200 people and taking some 250 people hostage.

To the relief of many observers around the world, Pakistan and Iran on Friday agreed to “de-escalate” tensions after an exchange of missile and drone attacks. The move came after the US, China and the UN urged both sides to exercise restraint.

Experts say the airstrikes exchanged between Iran and Pakistan are linked to the Israel-Hamas war. In Israel, hardliners want to force Palestinians out of the Gaza Strip into the Sinai Peninsula. Such a move would impact other neighboring countries in the region.

Considering the explosive nature of complicated conflicts in the Middle East, crises across the region could escalate, a scenario that makes matters challenging for policymakers in Seoul, especially those monitoring developments related to the country’s exports and shipping routes.

A growing number of multinational companies are now shifting their trade routes away from the Red Sea, where Houthi rebels in Yemen have been attacking shipping vessels for months. On Jan. 11, the US and Britain launched attacks on Houthi strongholds, but there is no clear sign yet that the Red Sea, which used to handle one-tenth of all goods moving across the world, will stabilize any time soon.

These conflicts in the Red Sea region spell direct trouble for Korean exporters. Similar assaults on shipping vessels in other parts of the Middle East are translating into higher logistical costs, which in turn could hurt the domestic supply chains -- a negative development for Korean companies that rely heavily on imports of oil and raw materials.

With no end in sight to the Middle East conflicts, the Ukraine-Russia war continues, another factor that Korean policymakers have to consider when drawing up measures to deal with geopolitical risks.

On Jan. 13, Lai Ching-te of Taiwan’s ruling Democratic Progressive Party won the high-profile presidential election, which is expected to raise tensions with China. A bigger clash conflict between Taiwan and China -- though the chance is slim at this point -- could spur Pyongyang to take more provocative acts on the Korean Peninsula to keep Seoul and Washington at bay.

Of course, experts say that direct military clashes in Asia are unlikely to pan out, but ongoing geopolitical tensions deserve close monitoring since China’s appetite for aggressive steps remains strong in contrast to the weakened influence of the US in the region.

More geopolitical confrontations around the globe call for the Yoon Suk Yeol administration to expand its perspective on diplomatic, security and economic policies.

The country’s position is closely intertwined with key allies like the US and China, Korea's largest trading partner, as well as the saber-rattling North Korea. The Korean government has to work together with the US and other nations to ensure the safety of trade routes and help maintain broader security in East Asia.

The government is urged to map out more specific contingency plans if clashes in the Middle East intensify in a way that could create shocks to the Korean economy and disrupt key supply chains.