Emergency plan needed for a new Mideast crisis

The military confrontation between Hamas and Israeli forces in Gaza drawn out for over six months is spilling over into what could become the fifth Arab-Israeli war since the 1973 Ramadan War, or the Yom Kippur War, which took place after Iran executed a massive aerial attack on Israel. A full-blown war on top of the Ukraine war could send significant shockwaves across the globe and devastate the Korean economy as it struggles with an inflation-plagued slump.

Iran launched a wave of 300 drones as well as cruise and ballistic missiles toward Israel overnight on Saturday until Sunday morning. It is Tehran’s first direct assault on Israel since the 1979 Islamic Revolution, although it kept up enmity by backing militant proxy groups fighting the United States and Israel. Iran claimed the attack was a response to Israel’s strike on one of its consular buildings in Syria earlier this month that killed two Iranian generals.

Israel claimed that 99 percent of the missiles and drones were shot down before they reached its territory with the help of its allies and its prized Iron Dome anti-missile system. Hawkish Israeli Prime Minister Benjamin Netanyahu vowed retaliation, declaring, “Whoever harms us, we will harm them.”

The UN Security Council held an emergency meeting after the attack. U.S. President Joe Biden, fearing possible upsets in the run-up to the presidential election in November, advised Netanyahu against a retaliation. But whether he will heed international warnings is uncertain, given the tit-for-tat history. Such a move could trigger a full-scale confrontation and escalate geopolitical risks that will cause another major upset in oil and commodity prices and supply disruptions that jeopardize the global economy.

The external shock could roil the Korean economy, which is dogged by high interest rates, inflation and U.S. dollar exchange on top of depressed domestic demand. The headline consumer price index rose 3.1 percent last month over last year and the dollar hit a 17-month high against the Korean won.

Another war there can fan more volatility on global crude oil and other commodity prices, dealing a heavy blow to Korea, which relies mostly on the region’s oil for energy. If Iran blocks the Strait of Hormuz on top of the Red Sea shipping crisis from Houthi rebel attacks on cargo ships and tankers passing the Suez Canal, the global shipping order could become dysfunctional enough to feed another inflationary run.

The government must closely monitor the alarming developments in the Middle East. A task force must be formed with the ministries of foreign affairs, security, economy, trade, industry and energy to make a contingency plan for various scenarios. It must prepare measures from multiple angles to minimize the external shock spillover to the domestic economy.