Rural Tanzania feels distant enough from the Strait of Hormuz that some who prefer farmland to skyscrapers feel insulated from the Middle East war. In Europe, the pain has been immediate, with rising fuel costs forcing major airlines such as Lufthansa to cancel up to 20,000 flights due to soaring jet fuel prices. It raises the question whether limited integration with the global trading and financial system will protect emerging economies.
The less an economy is exposed to global capital markets, the less it may be affected by conflict. Yet a signal from Donald Trump about how the United States might respond to Iran can quickly inject global uncertainty. Oil prices rise, pushing up costs for transport and key inputs like fertilizer. Advanced economies feel volatility faster because their industries are tightly linked to global markets and supply chains. For partially integrated economies, the initial impact of conflict can be muted.
Yet, we are already feeling the effects. Fuel prices have risen sharply: where I once spent about 100,000 shillings to fill my car tank, I now pay at least 135,000. A trader who travels frequently to China says airfares have also climbed considerably.
Less integration will not shield us from these pressures. Traders track global oil prices daily, and higher costs are steadily filtering into goods and services. Even if the impact is delayed, upward price adjustments and inflation are now increasingly inevitable.
Europe reacts quickly because it operates in highly competitive markets. Lufthansa’s 20,000 flight cuts mainly affected short-haul routes with thin profit margins. With jet fuel costs surging and those flights consuming vast volumes, the model became unsustainable. In such markets, survival demands swift action.
Tanzania appears stable for now, partly due to government cushioning that helps control prices, though sustaining that support may become difficult if the conflict persists much longer.
Rather than wait and hope the effects will be milder, it is time to focus on resilience – preparing for a future that could be worse than expected. We need a diversification strategy that reduces oil imports while prioritizing gas, hydro, and solar energy, and we should revisit – without ignoring the risks – the case for nuclear power.
In tandem, Tanzania’s government should invest in abundant, efficient, and comfortable public transport, while also promoting regional trade to shorten supply chains and reduce exposure to global disruptions.
For an ulcer-free future, small nations must choose alliances carefully. War has exposed the limits of security guarantees, as shifting signals from the United States show. Countries should avoid over-dependence on any single power while maintaining strategic neutrality and diversified partnerships.
They should also rekindle the spirit of the Non-Aligned Movement and consider how it can remain relevant in today’s increasingly polarized global order.
Physical distance does not equal economic safety. We might feel insulated but, in reality, are only exposed differently. The real question is how we can prepare ourselves against a volatile future.
