Geopolitics is no longer a background condition of the global economy; it is now one of its primary cost drivers.

Nowhere is this more evident than in the recurring tensions around the Strait of Hormuz and the Bab el-Mandeb, where the world is no longer dealing with temporary shocks but with structural change.

These two maritime chokepoints have long functioned as critical arteries of global energy trade. When security risks escalate — whether through open conflict or asymmetric threats — the impact goes far beyond delays. It translates into higher insurance premiums, rerouting costs, and what can effectively be described as a geopolitical toll. Even when tensions ease, these costs do not fully disappear. In this new reality, risk has become embedded in price.

As a result, geopolitics is no longer external to economic activity. It is part of its cost structure. Energy prices, logistics, and ultimately the cost of food and manufactured goods are increasingly shaped by the stability — or instability — of specific regions. The global economy is shifting from a system defined by efficiency toward one characterized by higher costs, fragmentation, and persistent uncertainty.

For countries like Indonesia, the implications are immediate. Rising energy costs squeeze industrial margins, disrupt supply chains, and increase inflationary pressures, particularly through food and transportation. In such an environment, reactive or sectoral policy responses are no longer sufficient. What is required is a comprehensive strategic adjustment — a shift in how economies connect to the world.

Yet this is precisely where the challenge lies. Much of today’s policy thinking still assumes that global stability will eventually return to pre-pandemic or pre-trade war conditions. As a result, strategies tend to preserve existing patterns: the same trade routes, the same export markets, and the same sources of energy supply. The problem is that the world sustaining those patterns has already changed. Waiting for normalcy to return is not a strategy — it is a risk.

In this new environment, stability, certainty, and predictability are no longer given; they must be actively constructed. This calls for a geoeconomic approach—one that focuses on expanding and recalibrating economic connectivity to reduce exposure to risk while securing long-term resilience.

From this perspective, diversification must be understood in its full sense. It is not limited to sourcing or markets alone, but extends across trade routes, export and import structures, product composition, investment flows, and even payment systems. Crucially, diversification does not mean abandoning existing partners — it means expanding strategic options.

This is particularly evident in the energy sector. Heavy reliance on supply from geopolitically volatile regions creates structural vulnerability. Yet viable alternatives exist—and at scale. The Americas, from North to South, have emerged as major energy producers with expanding export capacity. Diversifying toward these regions is not simply about cost efficiency; it is about ensuring greater stability and predictability over the medium to long term.

At the same time, geoeconomic considerations extend beyond energy to encompass market orientation and supply chain architecture. The United States and Europe will remain critical export destinations for Indonesia and must continue to be engaged. However, relying on them as the primary anchors of trade strategy is increasingly insufficient.

The Pacific, both its eastern and western dimensions, offers additional strategic space. While politically diverse, it has not experienced the same concentration of geopolitical disruption seen in the Middle East. This creates an opportunity to strengthen trans-Pacific economic linkages as part of a broader strategic recalibration.

Importantly, the Pacific should not be viewed as a substitute, but as one of several corridors that must be developed in parallel. Strengthening trans-Pacific engagement should go hand in hand with maintaining and optimizing existing corridors, including those linking to the Middle East and Europe as conditions evolve. This reflects a core principle of geoeconomics: not replacement, but balance and recalibration.

Indonesia’s ongoing efforts — such as its interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the implementation of the Regional Comprehensive Economic Partnership (RCEP), and the advancement of various bilateral and regional trade agreements — point in the right direction. However, direction alone is not enough. What is required is implementation. A sense of urgency must be matched by concrete, consistent, and coordinated execution. Global supply chains are being reconfigured in real time and they will not wait for late movers.

The central challenge, therefore, is not the absence of options, but the willingness to act on them. As long as policies are based on the assumption that the world will revert to its pre-Covid equilibrium, responses will remain incremental, fragmented, and sectoral. Yet the scale of current change demands something more fundamental.

Indonesia does not lack the capacity to adapt. What it needs is clarity of direction and consistency of policy. Governments must provide clear signals to businesses regarding the strategic path forward—whether in market diversification, energy sourcing, or supply chain restructuring. Ultimately, this is about restoring what has become scarce in the global economy: stability, certainty, and predictability. Without such signals, the private sector will default to familiar patterns—patterns that are becoming increasingly risky.

In a world increasingly shaped by geoeconomic dynamics, adaptability is no longer a competitive advantage; it is a basic requirement. Countries that recognize this shift and act early will be better positioned to navigate uncertainty. Those who wait for clarity may find themselves left behind.

The shift from Hormuz to the Pacific is not about replacing one corridor with another. It is part of a broader effort to expand and recalibrate how Indonesia connects to the global economy in a fundamentally different era.

The question is no longer whether this shift is necessary, but how quickly it can be implemented. Because in a world that is no longer stable, the most dangerous strategy is to assume that past stability will simply return.

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Iman Pambagyo is the Trade Ministry’s Director General of International Trade Negotiations (2012-2014, 2016-2020) and Indonesia’s Ambassador to the WTO (2014-2015). The views expressed in this article are those of the author.