BUSINESSES FORCED TO ADAPT
Rather than viewing geopolitical fragmentation solely as a threat, Zwinggi said companies are increasingly treating it as a catalyst for change.
“What we have seen for some years now is a much faster fragmentation of the world, or we could also say that we’re in the build-up of a new order,” he said.
“In that context, organisations, and particularly companies, will have to rethink how they operate, how they organise their supply chains, but also how they approach their consumer markets.”
Experts who spoke to CNA at the sidelines of the WEF meeting said those adjustments are already underway, particularly in the energy sector.
The recent Middle East conflict has once again exposed Asia’s dependence on imported fuel, noted Joshua Ngu, vice-chairman for Asia Pacific at global research and consultancy group Wood Mackenzie.
“I think what this crisis has shown is that APAC as a region is vulnerable to supply shocks,” he said.
Around 20 per cent of global oil and gas supply comes from the Middle East, but about 50 per cent of Asia’s oil imports come from there, Ngu noted.
He added that the longer-term challenge extends beyond securing fuel supplies to finding a balance between energy security, affordability and sustainability.
“Coming out of this crisis, I think a lot of focus is definitely going to be around energy security. It’s going to be around where you secure your gas and oil from … (and) what routes (are taken for oil and gas) to be delivered to Asia,” he said.
At the same time, AI is driving unprecedented growth in electricity demand, which presents a huge opportunity but a huge challenge as well, Ngu told CNA.
“China does define, in many ways … how a resilient energy system could look like (and how) our power system could look like,” he said.
Still, Ngu cautioned that every country would need to chart its own pathway rather than simply replicate China’s model.
For example, the Association of Southeast Asian Nations (ASEAN) Power Grid has long been seen as a potential game changer for regional energy cooperation.
Ngu said there is “a lot more momentum” around it now, despite challenges in making it a reality.