The new era’s alliances are being organized around shared rivals. But the global economy breaks at shared chokepoints, and the states that host them keep paying long after the shooting stops. Radwa Ramzy, a BGD Young Voice 2026 and an MA Economics candidate at the American University in Cairo, argues that one of the most overlooked alliances of our time is one built on common exposure.
This year, the repeated disruptions to commercial traffic through the Strait of Hormuz should have been good news for the Suez Canal. With Middle Eastern crude exports down 39% between the outbreak of the conflict with Iran in February and the beginning of September, some trade between Europe and the Gulf shifted toward the Red Sea. Yet the canal closed the 2025/26 fiscal year with $4.67 billion in revenue, less than half of its 2023 record, and its traffic is still short of pre-crisis levels. One chokepoint’s catastrophe was supposed to be another’s windfall. It turned out to be neither.
As an economist working in Egypt’s international cooperation sector, I worked on assessing the value and revenues of Egypt’s blue economy assets, and this puzzle kept following me. It points to something the debate on “alliances for a new era” tends to miss. We are redrawing alliances around who stands against whom. The global economy, however, does not fail along the lines of rivalry. It fails at a handful of narrow places, and the countries that host them have no alliance of their own.
My generation learned early on how fragile these narrow places are. I was a university student when Ever Given blocked the canal for six days in 2021, and the world discovered how much of its trade depended on one narrow waterway.
Egypt did not choose the Red Sea crisis, but it paid for it. Canal revenue fell by more than 60 percent, from $10.2 billion in 2023 to $4 billion in 2024, and by mid-2026, Egypt's foreign minister put the cumulative loss at about $10.5 billion. Panama lost traffic to drought in 2023, a disruption no navy could fix. Whether the cause is a missile or a dry season, the host absorbs the cost of a failure that begins somewhere else.
Working with a wide range of development partners over the past two years, I watched how global shipping disruptions have evolved into a major financial crisis for Egypt. The IMF itself pointed to the impact on Suez Canal receipts when it more than doubled its program to $8 billion in 2024. Alongside it came a €7.4 billion EU package, more than $6 billion from the World Bank Group and the $35 billion Ras El-Hekma investment from Abu Dhabi.
What struck me was how fast these commitments became entangled with one another. The IMF sized its disbursements partly around the timing of other financing. The World Bank’s support leaned on the same asset monetization program that the IMF was tracking. And when asset sales fell short and Egypt missed its June 2025 primary balance target, the corrective step was to put the full proceeds of a $3.5 billion deal with Qatar toward reducing debt. A Gulf investment ended up meeting a Washington-based lender’s target, one that, by the authorities’ account, had slipped amid regional turmoil. Partners that see themselves as separate, even as rivals, were bound together through one borrower’s balance sheet. From where I sat, that is what fragmentation looks like from the inside.
The deeper problem is time. Ships leave a dangerous corridor within days; they return over years. Before the Red Sea crisis, war-risk cover added about 0.05 percent of a ship’s hull value to a transit. It rose to 1 percent, and lead underwriters signaled they would need “material changes” in security before cutting it significantly.
This is the answer to the puzzle I started with. In June, the canal’s chairman credited falling insurance premiums with tipping shippers back toward Suez, and shipping lines have told the authority that route changes take time, and traffic will return only as routing confidence improves. Calm is also fragile. In July, new threats against Saudi-linked shipping pushed Bab el-Mandeb premiums from about 0.3 to 0.5 percent within days. For a host state, most of the losses build up after the headlines move on.
So, who is coordinating the slow way back? As far as I can tell, no one. Responses to chokepoint crises are designed by the powers whose cargo passes through, not by the states that host the route. In March, the United States launched a $20 billion maritime reinsurance facility through its development finance agency. The facility is open only to vessels meeting U.S. criteria and is aimed in part at supporting American and allied businesses. As the World Economic Forum has observed, government backstops tend to cluster risk along geopolitical lines.
None of these tools is designed for the host’s real problem, which is the reopening. And for climate shocks like Panama’s drought, no dedicated international mechanism coordinates recovery across chokepoints once the disruption has passed.
Corridor states, meaning countries whose sovereign waters or infrastructure host a chokepoint and whose economies are directly exposed to its closure, have long seen each other as competitors, since traffic lost at one is traffic gained at another. When Iran announced the closure of Hormuz, Suez did not simply gain; the whole region was repriced as risky, and many carriers kept choosing the long route around Africa. Shippers and insurers do not price a single canal. They price a system. The hosts should organize as one.
This is where I think we should stop inheriting old maps of alliance. I propose a Chokepoint Compact: a standing coalition designed around the countries that host the world’s corridors, from Egypt and Panama to Türkiye, Malaysia and Singapore, working alongside marine insurers, major shipping lines and multilateral lenders. It should do three things.
First, agree re-entry protocols in advance: conditions for reviewing and scaling back a war-risk listing, negotiated jointly by governments, insurers, lenders and shipping lines, so that returning to a route can move almost as fast as leaving it.
Second, build a neutral data layer. Shared, independently verified data on transits and threats, building on the IMF’s Port Watch, would let underwriters price evidence rather than headlines.
Third, finance redundancy as a global public good. Bypass pipelines, alternative port capacity and canal water security benefit every trading economy, and multilateral development banks are well placed to co-finance them.
I do not pretend this would be easy. The Compact cannot replace naval security, its members will still compete for traffic, and not every host is a bystander; Iran sits on Hormuz. But Compact’s purpose is narrower than a security alliance: to help the global economy recover faster from disruptions that will keep coming.
Corridor states should convene first, and Egypt, which works with traditional and newer partners alike, is well placed to take the first step. The World Bank Group and MIGA should bring their risk-sharing expertise. Lloyd’s Joint War Committee and the largest carriers belong at the table from the start, since re-entry rules only work if underwriters help write them. Lenders supporting corridor economies also have a role. By linking their programs to Compact’s shared data, they can allow program targets to be adjusted when externally generated shocks materially affect corridor economies, helping distinguish such shocks from domestic policy shortcomings.
For the leaders gathering in Berlin, the lesson of 2026 is simple. The alliances that define the new era cannot only be organized around shared rivals. Some must be organized around shared exposure, and the countries hosting the world’s chokepoints have waited long enough for one. My generation will inherit both these corridors and the bill each time they close. We would much rather help write the way back.
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