Economic fallout from middle east war discussed at BIISS seminar

Bangladesh's economy has been severely impacted by the ongoing conflict in the Middle East, according to Finance and Planning Adviser Dr Rashed Al Mahmud Titumir. He stated that the incumbent BNP government inherited a fragile economic landscape from its Awami League predecessor.

He was speaking at a seminar titled "Mitigating Economic Fallout of Middle East War in Bangladesh", organised by the Bangladesh Institute of International and Strategic Studies (BIISS) at its auditorium in the capital on Wednesday.

Titumir said the government faces a catch-22, with global energy prices soaring as a direct consequence of the Middle East conflict.

He cited 10% inflation, high unemployment—particularly among highly educated youth—a decline in real income, disguised unemployment and rising poverty as key vulnerabilities.

He affirmed the government's commitment to the electorate, who delivered a decisive mandate in the last parliamentary election.

He criticised the previous Awami League administration for repeatedly raising energy prices without regard for public hardship, contrasting this with the BNP government's pledge to avoid arbitrary increases.

Titumir emphasised that the current economic challenges should be seen as opportunities for strategic reform. Drawing parallels with the oil shocks of the 1970s, he noted that previous crises had prompted Bangladesh to reconsider its energy policy and economic priorities.

He noted that the country had long lacked a clear benchmark for energy security.

He criticised previous administrations, particularly labelling the former government as "fascist", alleging they prioritised crony capitalism and raised energy prices without adequate public accountability.

"Previously, energy prices were artificially inflated to benefit a select few. This is not the case now," Titumir said.

Bangladesh is now actively pursuing a diversified energy strategy, incorporating a balanced mix of fossil fuels, renewables and nuclear power, he said.

He added that the government had secured financial assistance from international bodies—including the IMF, World Bank and Islamic Development Bank—to stabilise fuel imports and trade financing.

"We have sufficient fuel reserves to manage short-term pressures—138,000 tonnes of diesel and 71,000 tonnes of octane," he said.

Titumir noted that the Eastern Refinery, previously able to maintain a 30-day energy buffer, now has only 17 days' worth of supply.

He called for urgent measures to replenish reserves and secure future energy supplies.

"We must learn from the past—from countries such as Japan, which have invested in strategic reserves to weather global crises," he added.

On macroeconomic adjustment, Titumir said the government was addressing rising poverty, which had affected an additional nine million people in the past year.

Among the measures implemented, he cited the introduction of family cards within 23 days of taking office, aimed at delivering social protection based on need rather than political affiliation.

He said the government would distribute farmers' cards on Pohela Boishakh (14 April).

Titumir also recalled that late Prime Minister Begum Zia had waived agricultural loans of up to Tk5,000 during the previous BNP tenure.

He described as a "revolutionary step" the recent cabinet decision, under Prime Minister Tarique Rahman, to waive agricultural loans of up to Tk10,000.

"This will help revitalise the agricultural sector and ensure farmers continue contributing to economic recovery," Titumir said.

He said the government was also prioritising industrial diversification for future stability, highlighting the importance of developing key sectors—agro-processing, pharmaceuticals, leather and ICT—to support long-term growth.

On environmental sustainability, he said the cabinet had recently approved measures to promote electric vehicles, including zero duties for educational institutions and a 20% duty reduction for other sectors.

Titumir called for a "whole-of-government approach" to address the economic crisis.

He urged public scrutiny and engagement, stating the government draws strength from a shared national understanding of the crisis.

The seminar also featured several other speakers.

Senior Vice-President of BGMEA Inamul Haq Khan discussed the export sector's vulnerabilities amid rising energy costs and global instability. He noted a significant decline in trade value and advocated for diversifying trade partnerships, particularly towards emerging markets in Africa and Latin America.

ESTex Foundation Chairman Prof Dr Ijaz Hossain focused on the energy crisis, especially Bangladesh's heavy reliance on fossil fuel imports.

"We must build strategic petroleum reserves to protect against global price fluctuations," Hossain said, also emphasising the need to shift towards renewables and increase domestic gas exploration.

BIISS Research Director Dr Mahfuz Kabir addressed the broader economic impact of global geopolitical tensions, particularly the Middle East conflict.

He highlighted challenges arising from energy price hikes, supply chain disruptions and reduced overseas employment opportunities.

"The global market is interconnected, and Bangladesh must adapt its macroeconomic policies to remain resilient," Kabir said.

BIISS Director General Major General ASM Ridwanur Rahman moderated the seminar and called for proactive measures to address structural vulnerabilities.