Strait of Malacca (Oct. 23, 2014). The Oliver Hazard Perry-class guided-missile frigate USS Rodney M. Davis (FFG 60) conducts a passing exercise with the Indonesian Navy Sigma-class corvette KRI Sultan Hasanuddin (366). Rodney M. Davis, stationed in Everett, Wash., is on patrol in the 7th Fleet area of responsibility supporting security and stability in the Indo-Asia-Pacific region. (U.S. Navy photo by Mass Communication Specialist 3rd Class Derek A. Harkins/Released)
Journal of Political Risk, Vol. 13, No. 2, January 2025
By Vaibhav Panwar
“For in tremendous extremities human souls are like drowning men; well enough they know they are in peril; well enough they know the causes of that peril; nevertheless, the sea is the sea, and these drowning men do drown.” — Herman Melville, Moby Dick
Between October 7th and most of 2024, the Houthi militia of Yemen earned its entry into the pantheon of global armed resistances— and the wider world’s list of threats to everyday life— with their attacks on commercial shipping in the Red Sea. While nowhere close to some of the infamous acts of terrorism committed globally in measures of human fatalities, the Houthis, however, have managed to hit the world where it hurts: commercial shipping chokepoints. Despite multiple countries’ naval efforts, the Red Sea and Suez Canal have observed a sizable drop in maritime traffic as ships opt to take the safer, but much longer routes to European ports. This often adds tens of thousands of nautical miles to their journeys, and with it inefficiencies to their cost, lead time, and the environment.
This perceived success in inflicting pain on the West and the global economy can inspire others in similar positions: the proverbial Davids of the world who are itching to have a go at their respective Goliaths, albeit with deadlier and remote-controlled slingshots. While the Houthis’ influence may extend globally, one theater stands out where some non-state actors might find striking similarities with the Houthis and find themselves within striking distance of another global economic jugular: The Strait of Malacca. They are the separatists from Southern Thailand living in the provinces of Pattani, Songkhla, Yala, and Narathiwat. The region has a history of seeking independence for their Malay-speaking, Muslim-majority residents, who stand in contrast to a Thai-speaking, Buddhist majority nation state.
Thailand has grappled with a separatist movement at its Southern border with Malaysia for decades now, and through violent suppression— as seen in the massacre of Tak Bai – quelled the movements. However, the four provinces still harbor their independent streaks and have remnants of the resistance still active. In the last few years, the once dormant movement has taken new life and culminated in a string of IED explosions across the restive provinces. This includes a recent explosion in Songkhla where a grenade was hurled at a statue of a Chinese Goddess and the Chinese workers in its vicinity. While the Thai government might have found some success over the last two decades, and as much as they would have the rest of the world believe that the problem has flatlined, the insurgency seems to have breathed new life in the last couple of years. From one-off IED detonations and car-bombs to coordinated attacks on security personnel spanning dozens of targets in multiple provinces, the signs are pointing to a brewing trouble in paradise.
The challenge gets trickier for the Thai state as the civil war to their North rages on. With the conflict between Tatmadaw and ethnic armies now nearing its fifth year, one of the collaterals has been the state of the border between Myanmar and its neighbors. Almost every neighbor of Myanmar has had to deal with varying degrees of instability; Thailand is no different. The civil war has degraded Yangon’s capacity to police its borders effectively, which has worked to the advantage of smugglers, traffickers, and poachers, who are now conducting cross border crimes of all sorts with bigger scales and scopes. The recent cases of some Chinese celebrities being abducted from Thailand by criminals operating out of Myanmar; the flourishing meth-labs and scam centers; and the sophisticated and porous trafficking of humans and narcotics show that the waters of Irrawaddy and Mekong are muddier than everyone thought— or would care to admit.
With the chaos in Myanmar exported to its neighbors, it is probably only a matter of time before the craftiness of Myanmar’s rebels, which allowed them to make gains against a more powerful adversary, trickles down to Thailand’s Southern insurgents. All one has to do is match the supply of arms and expertise in insurgency, presently flourishing in Myanmar, with the demand of the same in Thailand’s South— right at the mouth of the Malacca Strait. If the Thai separatists want to gather global attention or force the Thai state to come to the negotiation table, they have an unprecedented opportunity to do so.
Presently, both the Junta and the ethnic armies are most likely net consumers of munitions and manpower. The situation after a ceasefire, however, would be quite different. The sophisticated and cross-border operations of Myanmar-based scam centers, drug smugglers, and human traffickers which have made the border seem porous, will have access to a stockpile of weapons no longer in use in Myanmar. These stockpiles will include conventional munitions, and some tools of asymmetrical warfare that the ethnic armies used against the Junta. If and how the Thai separatists seize this opportunity is anyone’s guess. However it is possible they punch above their weight as Malacca presents, quite literally in this case, the biggest bang for their buck.
Should they opt for a Houthi-esque attack in Malacca, it is likely to lead to two things immediately: ships opting out of the strait and insurance companies increasing the war risk premium. The latter was observed in the Red Sea last year. Ships will be inclined to take one of the Indonesian straits like Sunda, Bali, or Lombok which will add more hours but relatively fewer dollars to their commute, instead of paying the higher premium to transit through Malacca and put the crews’ safety at risk. The trade-off sounds like a reasonable idea on an individual level, but not from a system perspective. These ‘safer waters’ and straits in the Indonesian archipelago don’t have anywhere near the capacity of Malacca. Given Malacca is struggling with congestion itself, a diversion from the Strait is very likely to create bottlenecks in what will be unfamiliar waters for many ships and their crews.
The bottlenecks and port congestion aside, another foreseeable problem will be that of bunkering (ship refueling). By bypassing Malacca, one also bypasses Singapore, a major refueling destination for many ships, particularly for those who are heading further East. There are also domino effects of such supply shocks, like the ones we experienced during Covid years where the lag caused by quarantine requirements in East Asian and South Asian ports led to various sorts of supply-chain related issues elsewhere, including the weeks-long congestion crisis at the Port of Los Angeles. The just-in-time supply chains are particularly sensitive to such crises and have a sweeping inflationary effect on the economy, if disrupted. This will come at a time when many nations in that region are expecting tariffs on their exports, and are facing an administration in Washington which seems to be increasingly uninterested in solving global problems– let alone a problem which is expected to hit the Chinese economy the hardest of all.
This probable alliance of arms from Myanmar and the resistance from Malay-Thailand stands to inflict painful costs on the global economy, particularly East Asian economies. Therefore, such an alliance must be monitored and pre-empted by Thai authorities, lest we risk another global shipping crisis. While enhancing domestic security, the Thai government should also invest in a political solution for the separatist problem. They should also engage the junta and ethnic armies in Myanmar for a managed cease-fire which minimizes the leak of weapons to Thailand. The current situation where criminals from Myanmar can abduct Chinese celebrities from Bangkok of all places, and traffic them to Myanmar, does little to instill confidence in their ability to manage their borders and crime within Thailand, let alone its far flung and restive corners.
Besides Thailand, other ASEAN states should also be involved; Malaysia should cooperate with Thailand on intelligence sharing and be actively involved in back-door diplomacy, lest it might also have to deal with an insurgency on its borders and the risk of spillovers. Indonesia, Malaysia, and Singapore can also offer their expertise and resources to Thailand on this issue. For instance, Malaysia was helping the Thai government and Thai separatists broker a truce. While it derailed swiftly, Kuala Lumpur’s leverage on the issue remains, and should be exercised to pre-empt any potential disruptions. Besides military, political, and diplomatic responses to a Thai insurgency, another contingency plan that should be developed is that of capacity building in the Indonesian archipelago to help safely divert traffic if Malacca becomes unnavigable. Developing standard operating procedures for such a contingency will help the ships and their crew in lowering the risks of being stuck in port congestion and other second order challenges associated with bypassing Malacca. Such procedures will also help coast guards and navies of stake-holder nations in coordinating patrols and managing the traffic. In absence of clear-cut duties and communication protocols, there will be chaos and confusion— the very goal of the insurgent. Ultimately, negating this chaos with mitigating initiatives will shrink the payoff of the insurgents’ act.
Vaibhav Panwar is a graduate student at Fletcher School of Global Affairs, Tufts University. He did his bachelor’s in business administration at Hult International Business School in Boston.