Diversification key to surviving volatility

On the day I am writing this editorial, I was meant to be travelling to Bangkok for one of my periodic visits to a city I have grown to love.

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I am always keen to shave off a few hours from a long-haul flight, which means the shortest flight path from my home in Washington, DC, would take me through Abu Dhabi, but my flight was cancelled like thousands of others due to the ongoing conflict in the Mideast. My inconvenience is nothing compared to the destruction endured by those on the ground, but it illustrates the expanding global impact of the US/Israel/Iran War.The new Anutin Charnvirakul administration has opened an office to assess and manage the impact of this conflict on the Thai economy and government. I was surprised by the comments in this paper ridiculing the establishment of that office. I am accustomed to the high level of snark exhibited by many online comments, but even so, the extent to which some Post readers minimised the effort seemed misjudged.

Yes, tourism will be impacted, which will have a ripple effect through the broader economy, as up to 20% of jobs in Thailand are directly or indirectly supported by tourism. The more pervasive factor, however, is the cost hikes and energy insecurity engendered by the ongoing conflict. A whopping 80% of the oil and 90% of liquefied natural gas that once passed through the Strait of Hormuz daily was bound for Asia. With the stoppage of that flow, energy prices have already begun to rise and will affect a widening basket of production and consumer costs. Adding to the complexity are predictions for an early regional heatwave, spiking energy demand, that could result in both scarcity and financial pain for Thais.