Mehdi Mahbub
President, RMG Centre
First of all, this is an issue that directly affects us — our connection with the Middle East. The region is important for our workers’ remittances and as a key destination overall. If the situation escalates, and things worsen, it could have a serious impact on us. The volatility of the Middle East would bring extremely negative consequences for Bangladesh.
The real impact on Bangladesh will come economically, because if the global economy enters a downtrend — which is very likely if the conflict intensifies — it will hit us hard. Our investments are already headed in a negative direction. Yes, things looked slightly better around Eid, but how long will that continue? That’s uncertain.
Our exports are not diversifying. And if another war breaks out, there will be a serious impact — first on our economy, and second on global purchasing power. Think about it: Our largest consumer markets are Europe and the United States. If they get involved in any way — and it’s looking increasingly likely — their purchasing power will decline.
One of today’s headlines was about the rising price of oil — you’ve seen it. This has a direct implication for the economy, not just ours but also for the European and American economies. So, we are heading toward a serious economic shock.
Secondly, and this is something I fear more deeply, is the political uncertainty we are facing in Bangladesh. We are entering an uncertain period with national elections ahead. We are hoping that a new government, following the elections, will bring in fresh investment.
But if this crisis continues to grow, that hope will also be shaken. So, this is a massive blow to Bangladesh — both from the Middle East crisis and from the impact it will have on our workers and their remittances.
This is not just a political analysis — this is my view as a business analyst. Iran is a major oil exporter. Now, if Iranian oil stops reaching the market, that too will have a knock-on effect.
As I said, oil prices have already started to rise. And pay close attention to the Strait of Hormuz — there is no need to be an astrologer to predict what’s coming. Over 20% of the world’s oil flows through the Strait of Hormuz. So this has a very direct impact.
Then, consider Yemen’s Houthis, Iran’s closest regional allies. They are already taking action. If both of these fronts escalate simultaneously, oil prices will continue to rise. A further escalation will have major global implications, and naturally, Bangladesh will also be affected.
Airspace is another concern. We have already seen some closures. If the crisis escalates further, more airspace might be shut down. That will directly affect global aviation. For businesses, this will be a massive blow.
Take what happened between India and Pakistan — when airspace was shut down, both sides were affected, but India suffered more economically. Unfortunately, the current location of the unfolding crisis — right after Jordan — is highly sensitive.
God forbid, if this spreads to the Gulf, the situation will worsen significantly. Iran has already issued indirect threats, and they’re maintaining that posture. The language they’re using is telling: they’re talking about “US interests in the Middle East.” What does that mean? You know it well, the US has military bases in Saudi Arabia and several other countries in the region.
If things deteriorate further, the airspace will inevitably be affected. Other countries may start shutting theirs down too. Now, in the context of Bangladesh, our major connections to Europe and the US are via the Middle East — through airlines like Emirates, Qatar Airways, and Turkish Airlines. These are our key transit routes. If airspace is restricted or closed, ticket prices will rise even further — they are already quite high — and could spike even more.
Lastly, unfortunately, the political scene in South Asia is currently extremely constrained. People-to-people connectivity is limited for multiple reasons, including religious and geopolitical ones.
Just look at India’s strong ties with Israel. Pakistan may not be directly linked with Iran, but it has a strong connection with Turkey. And most countries in South Asia, including Bangladesh, are Muslim-majority nations. So, if this escalation intensifies, there is a real fear that new forms of political groupings will re-emerge even in South Asia. That is another very real apprehension.
TBS’ Nasif Tanjim spoke to Mehdi Mahbub over the phone.
