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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.

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