Iran war could threaten Bangladesh’s forex reserves: Masrur Reaz

The ongoing unrest in the Middle East involving Iran, Israel and the United States could pose a serious threat to Bangladesh's foreign exchange reserves and push the country into a difficult economic situation, according to M Masrur Reaz, chairman of the private research organisation, Policy Exchange Bangladesh.

He made the remarks while speaking at a discussion titled "Iran War and Its Impact on Bangladesh's Economy and Public Life" held at the BDBL Building in Kawran Bazar this afternoon (15 March).

Reaz highlighted that the conflict could negatively impact exports and overseas employment, while also possibly necessitating increased government subsidies.

He said, "The government can spend money sourced from domestic banks, but where will the foreign currency come from? There is no solution for this. As a result, pressure will build on the dollar. If the value of the taka falls by 20 to 30% again, how will this be prevented?"

Reaz underlined the country's energy import vulnerability, saying, "Since 2011, domestic exploration and well drilling have been almost completely halted. In that context, we have fallen behind. Perhaps, for some ulterior motive, LNG dependence has been prioritised."

He added that the Middle East crisis has far-reaching economic consequences, affecting energy availability, prices, fiscal capacity due to subsidies, export sustainability, remittance flows, and broader social and public life.

He stressed the urgency of redesigning the country's energy policy, saying, "The Iran war is partly unavoidable, partly unfortunate. But the country's internal energy policy has been mismanaged for many years."

"In this situation, urgent planning and management are needed. Energy policy must be redesigned. There can be no bigger wake-up call than this," Reaz added.

Other speakers included Prof Sabab Khan, energy expert Shafiqul Alam, former secretary of the Bangladesh Association of International Recruiting Agencies (BAIRA) Shamim Ahmed Chowdhury Noman, former president of Dhaka Chamber of Commerce and Industries Shams Mahmud, and Molla Amjad Hossain, editor of Energy and Power.

The session was moderated by Fahim Mashroor, co-coordinator of Voice for Reforms.

Experts at the discussion described the Middle East crisis as a wake-up call for Bangladesh and emphasised the need for long-term energy security planning.

They recommended exploring new domestic gas wells, increasing solar power production, and enforcing strict government measures to ensure judicious fuel use during crises.

They noted that the war's negative impact on the economy and public life has already begun and will intensify if the conflict is prolonged.