The wars in Ukraine and Palestine, the expansion of China’s Belt and Road Initiative, and US President Donald Trump’s claims on the Panama Canal and Greenland are conspiring to redraw trade routes across the oceans that have marked human expansion and settlement for millennia.
The discontinuous mind may not immediately recognise the way all of these things fit together, but we are compelled to try to make sense of it all.
Mainly Europeans and Asians have historically established their political economic powers, territorial expansion and settlement using the oceans. These were not always benevolent enterprises. A most elementary reading of Spanish, Portuguese, British and Dutch colonial expansion ought to be sufficient.
Never mind the view that the Europeans brought flushing toilets to Britain’s former colonies and, as former British cabinet minister Jacob Reece-Mogg said in October last year, the former colonies should pay the British for ending slavery. There remain many who continue to hold the view that colonialism was “not all bad”, but never mind that too.
I should point out that it is quite absurd to imagine writing a history of maritime trade in less than 1,000 words, or even 1,000 pages. What is important nonetheless is the way politics, power and wars shaped and reshaped oceanic trade routes. This time is no different.
So we get to Trump, who wants to reclaim the Panama Canal, which now belongs to Panama. Under a special agreement — the Hay-Bunau-Varilla Treaty of 1903 — the US helped build the canal, and Panama retook control of it in 1999.
That’s the simple explanation but two facts are important. Panama took control of the canal, which straddles its territory, in accordance with a set of agreements. Trump wants it back because he reckons Chinese trade dominates usage of the canal. That’s simply wrong. The Panama Canal Authority reported in the third quarter of 2024 that Chinese-origin trade through the canal amounted to just 20% of that of the US.
Place Trump’s Panama Canal ambitions beside the absurd offer to buy Greenland, and the objective to redraw maritime trade routes and assert dominance and control becomes clearer. Greenland is considered to be crucial to “America’s national security”.
One short story is that the shortest route for Russian nuclear missiles to reach America’s east coast goes over Greenland. The Pituffik Space Base in Greenland is an important part of America’s early missile-warning system. And the waters between Greenland, Iceland and the UK are an important area for the high-stakes submarine games played by Nato and Russia.
On to Russia — and Singapore. Within weeks of the start of the Russia-Ukraine war the Singaporeans went into panic mode. The Nusantaran state’s most authoritative news media, The Straits Times, voiced concern that the war (and Western sanctions) would divert Russian oil and gas to the east, through Singapore.
The concern was well founded, especially because the island-state is becoming overwhelmed by increases in maritime traffic; from refuelling to docking and container storage. Ship operators are waiting longer for refuelling, anything from 48 hours to two weeks while prices for fuel are doubling, according to Singapore’s Business Times.
As we reported on these pages in late 2023, the Red Sea has become a dangerous waterway because of Houthi attacks on vessels passing through the Gulf of Aden. That has also affected Singapore.
The island-state became the world’s leading maritime city in 2019, and was reportedly “unaffected by global conflicts” according The Straits Times in April last year. A month later, a statement by the Maritime and Port Authority of Singapore said that “the diversion of vessels around the Cape of Good Hope had disrupted vessel arrival schedules at major ports around the world with off-schedule arrivals (not at the planned or expected time), and has caused a ‘vessels bunching’ effect”.
The Straits Times also reported that during the second quarter of 2024 about 90% of the container ships arriving in Singapore were off-schedule precisely as a result of diversions from the Red Sea — up from an average of 77% in 2023.
“On one key route in Asia, ship owners are now earning more than $49,000 a day transporting products from South Korea to the distribution hub of Singapore, compared with $98 a day prior to the war,” The Straits Times reported shortly after the start of the Russia-Ukraine war.
Maritime congestion, and an apparent lack of long-term vision by the Singaporeans — beyond becoming super wealthy in the shortest term possible — and seemingly unable to cope with what it has become, has been building for decades. As a part of attempts to remake world trade routes, Singapore now faces the possibility of a land bridge (water and rail routes) being built from Thailand to carry Chinese trade, thereby bypassing Singapore.
I don’t think it will be built; at least not in my lifetime. What is clear though, is that the world’s maritime trade routes have been disrupted, and there are apparent attempts at remaking them — for better or for worse.
• Lagardien, an external examiner at the Nelson Mandela School of Public Governance, has worked in the office of the chief economist of the World Bank as well as the secretariat of the National Planning Commission.
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