The Iran-Israel war has shaken the entire world. Concerns about the global economy are mounting. Regardless of how long this war continues or in what direction it progresses, its negative impacts will be felt worldwide. The consequences for individual countries will be profound and far-reaching.
We are living in an era of globalization, where no country can remain untouched by such a conflict. Around the world, we are seeing countries take precautionary steps in response to the Iran-Israel war. They are adapting their political and economic strategies. The European Union has formed a strategic committee to address potential fallout. India has set up a monitoring cell in its parliament. Pakistan has already sealed its border with Iran. In a recent cabinet meeting, Pakistan also initiated new austerity plans including fuel and electricity savings.
So, what is the plan of the Government of Bangladesh? Why hasn’t the government called an all-party meeting? Why isn’t it engaging with the business community?
Previously, the Russia-Ukraine war plunged the global economy into turmoil. Bangladesh was deeply affected by that conflict. Economists now warn that the impact of an Iran-Israel war could be even more severe for Bangladesh. If Iran’s gas production facilities are attacked or the Strait of Hormuz is blocked, the effect will not be limited to the Middle East — it will send shockwaves through the global energy supply chain and economy. Bangladesh would be directly affected by such developments.
The Strait of Hormuz is one of the world’s most vital maritime trade routes. Around 20 million barrels of oil pass through it daily, accounting for nearly 20% of the global oil supply. If this route is disrupted, international oil markets will be thrown into chaos.
During the 1973 Arab-Israel war and again in 2017 after Saudi oil facilities were attacked by Israel, oil prices skyrocketed. Experts fear the current situation could push prices even higher. Let’s look at the possible effects of the Iran-Israel war on Bangladesh:
Rising energy prices:
Bangladesh is heavily dependent on imported fuel for power generation, especially LNG and refined oil. A rise in global fuel prices will increase electricity production costs and negatively impact industrial output, transportation, agriculture, and retail markets. This will result in higher inflation and living costs.
Bangladesh imports LNG from Qatar and Oman under long-term contracts. These imports rely on passage through the Strait of Hormuz. If Iran closes the strait for a prolonged period, LNG supply will be disrupted. The gas crisis in Bangladesh's industries — already struggling with repeated price hikes — would worsen. Industrial production will be affected, and commodity prices may soar.
Rising poverty:
This year's national budget has set a relatively low GDP growth target. Economists point out that the country has been battling high inflation for two years. The Iran-Israel war will further burden low-income populations, pushing more into poverty. The World Bank has predicted that 3 million more people in Bangladesh could fall into extreme poverty this year — a number that could rise further due to the war.
Economic stagnation is already evident, and the conflict could shrink the economy further. Development activities may stall. If the Strait of Hormuz closes, global trade will be disrupted. Bangladesh’s export-reliant economy — especially the garment sector — will face severe challenges. Shipping delays could lead to canceled orders or forced price cuts, putting export markets at risk. Higher fuel costs will also make it difficult for Bangladesh to remain price-competitive in global markets.
Impact on labor market and remittance:
The Middle East is the main destination for Bangladeshi migrant workers. If war spreads across Iran and neighboring countries, employment opportunities will be threatened. Already, 1,400 Bangladeshis have lost their jobs in Iran, and their safety is at risk. A prolonged war could result in more job losses.
Countries like Jordan, which employ a large number of Bangladeshis, may also be affected. The U.S. has openly backed Israel, while Iran is seeking support from Muslim countries, raising the possibility of wider regional involvement. If the conflict spreads, construction, services, and housing sectors in the Middle East may shut down, leaving workers unemployed. Consequently, remittances — a vital source of foreign income for Bangladesh — may decline. Oman, located near the Strait of Hormuz, is Bangladesh’s sixth-largest remittance source.
Increased air travel costs:
After the Israeli strikes last Friday, commercial air traffic over Iran plummeted. Flights from Europe to Asia are now rerouting to avoid Iranian airspace. Many planes have changed course mid-flight to avoid Iran, which has started to disrupt global air travel. Some Bangladeshi flights use Iranian airspace, meaning travel costs could rise. Fuel price hikes will only add to this, affecting both exports and travel expenses for migrants and other international travelers.
Reduced international aid:
The war is likely to reshape global diplomacy. U.S. aid to Bangladesh has already been suspended. The UK has significantly reduced its aid. Switzerland and other European nations have halted new assistance. With global focus shifting to Iran-Israel and Gaza, aid to Bangladesh may decline further, jeopardizing development projects in health and education.
Rohingya crisis may worsen:
The war will redirect the attention and resources of international aid agencies to the Middle East, reducing support for Rohingya refugees in Bangladesh. Global efforts for their repatriation may lose momentum.
Diplomatic risks for Bangladesh:
The U.S. has strongly supported Israel in the conflict, which could polarize global diplomacy. The U.S. may pressure Middle Eastern countries to side with Israel. This could place Bangladesh in a sensitive and vulnerable diplomatic position.
This war will trigger a multifaceted crisis. The biggest concern is that our government has yet to identify and prepare for these risks. Given that this is a transitional government, it is urgent to convene an all-party meeting and develop a comprehensive strategy. Simultaneously, the government must involve business leaders and key stakeholders to chart out an immediate course of action.
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The writer is a Playwright and Columnist, email: [email protected]
