Asia's invisible weapon: Malacca could paralyze the Chinese economy
Every year, 90,000 ships cross the waters of the strait, through which circulate a third of the goods and more than a quarter of the world's oil
BarcelonaIn 1812, Napoleon invaded Russia with what was then the most powerful army in Europe, convinced that the Russians would have no chance in a head-to-head battle. But instead of that, the Moscow troops put geography to their service: avoiding direct confrontation, they retreated and drew the French into the immense Russian plain. With logistics fragmented, without provisions or shelter, the Grande Armée had to retreat in the face of extreme cold and constant attacks.
Tim Marshall recounts this and hundreds of other examples in Prisoners of Geography, where he demonstrates a powerful theory: landscape, climate, and geographic features determine the course of history. "The decisions of those who lead the seven billion inhabitants of the planet will never cease to be subject, to a certain extent and as has always happened, to the rivers, mountains, deserts, lakes, and seas that limit us," he summarizes.
Two centuries later, Iran has put the same logic into practice. Despite having an inferior army, it has so far resisted the onslaught of the United States and has demonstrated that the obstruction of a vital artery like the Strait of Hormuz –through which about a fifth of the world's oil circulates– can gangrene the global economy. It has made it clear that a surgical approach—mines at the entrances to the Strait of Hormuz and threats against oil tankers—can be enough to radiate economic pain to markets around the world.
This lesson has not gone unnoticed in other regions of the planet. Thousands of kilometers from the Gulf, in Southeast Asia, some nations have begun to look with different eyes at another of the planet's bottlenecks: the Strait of Malacca. This passage connects the Pacific and Indian Oceans and is the most direct route between Europe and China.
Every year, more than 90,000 ships sail through it, carrying a third of the world's goods and more than a quarter of the world's oil. "23.2 million barrels of oil pass through it every day, making it an indispensable artery for the main industrial economies of East Asia, such as China, Japan, and South Korea," Faizal Yahya, a senior researcher at the Institute of Policy Studies at the National University of Singapore, tells ARA.
There is also hardly any way to bypass the strait. Ships that wanted to avoid it would have to navigate through the entire Indonesian archipelago – adding thousands of nautical miles and many days of travel – or go around the southern tip of Australia, an option that is practically unfeasible for most carriers due to costs and physical distance.
Indonesia proposes a toll
The potential of Malacca is no secret, especially to Beijing: around 60% of its maritime trade and nearly 80% of the oil it imports pass through the channel. But the precedent of Hormuz has turned things around. The big scare came when the Indonesian Deputy Finance Minister, Purbaya Yudhi Sadewa, proposed in April the imposition of a toll on ships sailing through it. "If we divide it into three parts, between Indonesia, Malaysia, and Singapore, that could be quite interesting, right?", he quipped at a symposium. "Are we aware that 70% of East Asia's energy needs and 70% of its trade pass through the Indonesian straits?", Indonesian President Prabowo Subianto told his ministers, inflating the figures.
The statements caused such a commotion that they forced the government to retract. However, the words show that this idea, which would have seemed crazy just a few months ago, has taken hold among the region's political class.
The response from neighboring countries did not take long. The Malaysian Minister of Foreign Affairs, Mohamad Hasan, warned that no state has the power to unilaterally determine access to the strait: "Everything that needs to be done requires the cooperation of the four countries" that share the waterway: Indonesia, Malaysia, Singapore, and Thailand. Singapore, on the other hand, has adopted a firm stance against the possibility of hindering navigation. "It is striking the amount of ships that are cheap in Singapore waiting to pass through the strait –explains Daniel Gomà, a professor at the University of Cantabria, to ARA–. They already benefit from how it works; in a way, they collect a toll through docking fees at the ports".
Danger of recession
Experts agree that the consequences of blocking Malacca would be devastating. "The Chinese economy would be paralyzed. The 3.5 trillion dollars in trade and 80% of crude oil imports that transit through the strait daily would be cut off," asserts Yahya. The repercussions, he warns, would spread to national and global markets. Since factories around the world depend on Chinese manufacturing components –from electronics to car parts–, Gomà reasons, the effects on industry would be immediate. "The global economy would enter a deep recession," he summarizes.
Even a seemingly minor measure, such as a toll, would have an instant rebound effect. Since it is a very congested strait, any delay increases logistics costs, disrupts supply chains, and ends up impacting global prices, warns Yahya.
However, it is difficult to imagine that Beijing would not react to an attempt to restrict this strategic corridor. Aware of its historical dependence –dubbed by former Chinese president Hu Jintao as the Malacca Dilemma–, China has based its foreign action on the military control of islets in the South China Sea and on promoting alternative trade routes. Any attempt to block the passage or impose a toll, warns Gomà, would light the same fuse: "It would be expected that China would take a military stand in the area," he asserts.
But the issue goes beyond Malacca. This approach attacks the foundation upon which Southeast Asian economies have developed: freedom of navigation. In a context where international law is wounded, the danger is that such a broad consensus ends up breaking and that large straits and canals cease to be considered common infrastructures to be understood as geopolitical assets that can be monetized. In a geopolitics of barriers, the same countries that impose tolls could end up harmed. Indonesia could end up like Napoleon: ignoring the power of geography could cost it dearly.
