The escalating conflict in the Middle East is beginning to ripple through global supply chains, energy markets and shipping costs, putting Malaysian businesses, particularly small and medium enterprises (SMEs), at risk, warned MCA Economic and SMEs Affairs Committee Chairman Datuk Ir Lawrence Low.
“Many assume that the conflict is far removed, but in a globalised economy, regional tensions inevitably affect trade-dependent countries like Malaysia,” Low said in a statement.
He shared that according to Malaysia External Trade Development Corporation (MATRADE), over 60% of Malaysian exporters expect to be affected by rising freight costs, shipping delays and increased war-risk insurance premiums, with micro-SMEs comprising the majority of concerned businesses.
“Some companies are already experiencing order cancellations, delays and higher raw material costs, particularly for energy-linked industrial inputs such as plastics,” he said, while cautioning that continued disruptions along key maritime routes, including the Strait of Hormuz, could further destabilise logistics, with rising costs ultimately passed on to consumers in the form of higher food, manufacturing and retail prices.
To mitigate the impact, he urged the government to implement targeted measures, including:
- Transitional financing and working capital support for exporters to offset rising shipping and insurance costs.
- Diversification of markets to reduce dependence on a single trade route or partner.
- Enhanced logistics and customs efficiency to lower administrative costs and keep businesses competitive.
“The situation is uncertain, and early government action is crucial. Without it, rising transport and raw material costs will eventually increase the cost of living for Malaysians,” he added.
Low stressed that proactive steps now could shield Malaysian SMEs and maintain economic resilience amid ongoing global volatility.
