In Season Two of the hit television series Game of Thrones, the following exchange happens between Petyr Baelish and Tywin Lannister, the de facto ruler of the universe’s “seven kingdoms”.
Baelish: It is my belief that a moment of chaos affords opportunities, lost soon after.
Lannister: You say that as if you were the first man alive to think it. Yes, a crisis is an opportunity. What other brilliant insights have you brought me today?
In today’s (real) world, it can sometimes feel as if we have somehow plunged into some very extremes of fiction. When this essay is published, the 2026 Iran war — which began on Feb 28, when the US and Israel launched airstrikes on multiple sites in Iran — will roughly be in its first full month, assuming it has not yet ended.
Rather than belabour the already-felt and as-yet-felt consequences of the war on Malaysia, I thought I would take a twist on the Petyr Baelish angle. In particular, while Baelish focuses on what to do given the crisis of the northern rebellion, I want to discuss what not to do during this particular crisis. Yes, as Lannister sardonically retorts, a crisis is an opportunity, but there are plenty of actions or decisions taken in a crisis that can lead to even larger distortions of future outcomes.
The most obvious place to start is subsidies. In the past two years, the government has made important steps in blanket subsidy reform, the most notable of which are the diesel reform in 2024 and the Budi95 reform in 2025. Diesel and oil prices are now under extreme pressure from the effective closure of the Strait of Hormuz, which means that the government’s fiscal budget is now under extreme pressure as well. Prime Minister Datuk Seri Anwar Ibrahim has stated publicly that the current RON95 petrol price of RM1.99 per litre can be maintained for the next one to two months. But this comes at a cost — the government’s subsidy bill has increased from RM700 million to RM3.2 billion a month.
Let’s suppose the war goes on unabated, possibly even with further escalations after another two months. What should we not do? If ever there was a time for the government to go even further in reducing our subsidy dependence, this is it. Yes, we may be heading into a general election in the near future, and maybe a radical approach is out of the question, but we can accelerate the incrementalism. One thing we should not do would be to “wait and see” for the war to play out and hope that we can continue to maintain subsidy levels — and therefore hit fiscal targets — and just simply kick the can down the road.
Related to this, oftentimes, whenever affordability issues arise, a common solution that the government takes is to impose price controls. This is, to an extent, somewhat understandable. Malaysian median wages aren’t particularly high and wage growth for much of the economy, with the exception of the lower-income households due to cash transfers and the minimum wage, remains muted. But price controls do not solve the core issue of low wages.
Thus, if indeed there is a prolonged war and the cost of living inevitably rises — ahead of a general election, no less — we really should not keep turning to the old chestnut of price controls. Sure, they can be useful short-term stabilisers and, yes, they can be better targeted these days because of Budi95, but even then, the real challenge is sustainable rising incomes. This is not only the role of the government, whose balance sheet is extremely stretched. Indeed, among economic actors, it is our larger Malaysian firms that actually have the balance sheet to invest for growth and, thus, for higher-paying jobs. Greater volatility makes firms more conservative, so we have to really be quite innovative — and we, as a society, need to avoid choking the space for that innovation — in firm partnerships, joint ventures, mergers and acquisitions, and so on in trying to generate growth.
As a corollary of this, while it is true that governments and firms should pay heed to some conservatism given all this uncertainty, it would also be a mistake to embark on austerity measures. During the eurozone debt crisis in the early 2010s, Portugal, Italy, Ireland, Greece and Spain, also known as the “PIIGS” countries, embarked on severe austerity drives. These drives stabilised financial markets, particularly bond markets, in the face of potential insolvency and reduced fiscal deficits but had grievous repercussions on economic recovery and long-term unemployment. Greece, in particular, suffered a lost decade.
Yes, we have a crisis today, but austerity should not be a blanket answer. What we need is a form of “strategic” austerity — yes, we should cut needless expenses and be a lot more tight on things like procurement and operating expenditure but, no, we must not stop investing in development or/and capital expenditure for the future. We can certainly be more savvy about it, for instance, no more tax relief for foreign direct investments that are in non-prioritised sectors or, on the flipside, some fiscal carrots (and sticks, to be fair) for pools of domestic capital, public and private, to redeploy from old economy to new economy industries.
Next, a quick point on food security. Malaysia imports about RM55 billion worth of food per year and so, it can be tantalising to adopt the notion of, “Hey, let’s make sure we are fully self-sufficient in every single critical food item so that we’ll be more resilient in a crisis”. That instinct, however seductive, is absolutely not what we should do. We only need to look at our neighbours to our immediate north and south for guidance. Looking north, Thailand is a major exporter of rice, sugar, cassava, poultry and processed seafood. In a pinch, it certainly could feed its domestic population. But here’s the rub — agriculture employs 30% of Thailand’s workforce, but only contributes about 9% of GDP. Thai farmers remain relatively poor, agriculture productivity is low and, most of all, for broad-based growth, there is very likely a distorted misallocation of resources.
Now, looking south, Singapore has no land, and so its food security strategy is risk diversification. In particular, it regularly signs food supply agreements with food-exporting nations to secure strategic long-term access, while encouraging Singaporean firms to invest in farms abroad. This is, ultimately, a more sustainable manner of food security, alongside further optimising domestic agriculture given our arable land. In particular, for a given critical food item, we can think of securing it using a portfolio of measures — improve domestic productivity if we can produce that item, secure strategic food alliances via trade if we cannot produce enough of that item or that item altogether, and to truly build a national strategic stockpile of critical items, whether they be food, energy or/and medical supplies. We should not turn to, “Hey, let’s produce everything here!”
Finally, as I try to keep up with the war and — as best as I can — Truth Social posts, I am personally finding it really difficult to know who and what to fully trust and believe, and therefore, I have no way of knowing for myself, or even forming a relatively reasonable opinion of where this war is going to go. In particular, I find it especially difficult to take seriously those who provide opinions on what’s to happen with such absolute certainty. They may be right, but it would be good to see some recognition of the degree of uncertainty. Thus, given all that, the best thing we can do is take opportunities from this crisis. But even with that in mind, recognise that there are still plenty of things we should not do.