SINGAPORE (Jan 10): The new year began with shocking developments in the Middle East. While financial markets have corrected, the response to the clashes between the US and Iran has been relatively muted, perhaps because investors are assuming that there is only a limited chance that the clashes would spiral into an expanded conflict. However, I believe that such a view is a tad complacent. The escalating tensions between the US and Iran in recent days mark a steep increase in political risks, and the Asian region will not be spared its implications.

Treading into dangerous waters

First, the assassination by American forces of Iranian Revolutionary Guards Commander General Qassem Soleimani marks a decisive turning point in how states conduct themselves. Countries generally avoid the highly provocative act of killing a senior political or military leader of another country. And for good reason, since such actions would tend to invite tit-for-tat retaliation. If it now appears that the US has upended this norm, other powerful nations may also feel that they can undertake similar attacks—if they can get away with it—and eventually, no one would be safe.

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