Economic Security: An Analysis of the Strait of Malacca

Abstract

Following the outlining of a broad definition for economic security this chapter focuses on the trend of increasingly interdependent, complex economic systems and how they can be navigated. A framework is established where the risks related to economic security it can be approximated as interdependent net works vulnerable to cascading failures. Scaling networks have characteristics that allow for a node-focused approach to security where the hubs of the network can represent the major units or hubs in the system, and to demonstrate the effectiveness of this perspective in economic security a case study is provided. The case of Lloyd’s of London and its intervention in the Malacca Strait will show how private actors who appreciate the criticality of node-based concepts in economic systems can apply such knowledge to their benefit. The effects of localized catastrophes on corporate markets are discussed to demonstrate the link between macro and micro-economic nodes as well as how to identify economic nodes. The framework established and demonstrated will be useful for the decision making processes of experts in the field.