Kota Kinabalu: Sabah Entrepreneurs Transformation (SET) Chairman Datuk George Lim said escalating geopolitical tensions in the Middle East are no longer a distant concern but a direct and immediate threat to Malaysia’s economy, businesses and the livelihoods of ordinary Malaysians.
He said recent statements by United States President Donald Trump regarding potential actions around the Strait of Hormuz, a critical corridor for global energy supply, must be taken seriously, as any disruption would trigger immediate increases in fuel prices, transportation costs, and inflationary pressure across all sectors of the economy.
“The World Bank has already warned that structural shocks have been sustained, even before any further escalation. Should tensions worsen, the world faces a dangerous combination of slower growth and rising inflation. Malaysia is not insulated from this reality,” George said in a statement.
George said early warning signs were already being felt on the ground, with industry players reporting shortages in raw materials and rising fuel costs pushing up prices of essential goods including mineral water, cooking oil, and daily necessities.
Products dependent on petroleum-based inputs, particularly plastic packaging used in cleaning products, personal care items, and dairy goods, are expected to face price adjustments in the near term. He added that even if tensions were to de-escalate, supply shortages in materials such as resin would continue to drive costs upward.
Logistics networks are also beginning to respond to the pressure. The introduction of an Emergency Fuel Surcharge by major delivery companies such as Ninja Van signals that cost escalation has moved beyond the fuel pump and into the full length of supply chains, according to George.
He said Small and Medium Enterprises (SMEs) are the most exposed in the current environment, facing rising input costs, tightening margins, and supply uncertainty, particularly those with limited cash reserves.
“At the same time, inflationary pressure will dampen consumer spending, leaving SMEs caught between higher costs and weaker demand. Without timely action, we risk a wave of business closures and job losses that will have long-lasting consequences for Sabah and for Malaysia,” he said.
While commending the Federal Government for moving swiftly to stabilise fuel supply through enhanced monitoring and enforcement, George called for additional measures to sustain market stability and confidence.
On behalf of SET, he urged SME owners and entrepreneurs to act immediately by strengthening cash flow and liquidity positions, reviewing cost structures and pricing strategies, diversifying supply chains, exploring new markets, and accelerating digital adoption to build operational resilience.
George also called for a broader strategic shift, saying Malaysia could no longer afford to rely heavily on external supply chains in an increasingly volatile global environment.
“Domestic economic resilience must be built not merely discussed. Strengthening SME sustainability must become an immediate national priority, not a distant aspiration,” he said.
He added that SET stands ready to support the business community through this period by convening stakeholders, advocating for entrepreneurs, and connecting businesses with the resources and networks needed to navigate the challenges ahead.
