Three steps Bangladesh needs to take amid escalating Middle East tensions

The recent US attacks on Iran's nuclear facilities in Fordo, Natanz, and Isfahan have escalated tensions in the Middle East, deepening the ongoing conflict between Israel and Iran. This development threatens to push the entire region toward an increasingly uncertain and volatile future. 

Early signs already point to rising fuel prices, disruptions in global supply chains, and growing political instability.

For Bangladesh, the implications could be far-reaching. A spike in fuel prices may drive inflation higher, while the livelihoods and remittance flows of millions of Bangladeshi expatriate workers in the Middle East may come under threat. 

Additionally, the country's export sector and maritime trade routes could face significant pressure.

In light of these risks, Bangladesh must respond with caution and foresight. The following three key measures are essential:

Diplomatic engagement and expatriate protection

Bangladesh should maintain active diplomatic channels with Middle Eastern nations to ensure the safety of its migrant workers. Embassies and consulates must be ready to offer rapid support during crises and work closely with host governments to mitigate potential dangers.

Energy diversification and sustainability

To withstand global energy market volatility, Bangladesh must diversify its energy sources. Prioritising imports of LNG, renewable energy, and other alternatives will be crucial. 

At the same time, promoting efficient and planned domestic energy consumption will help cushion the economy against sudden price shocks.

Resilient economic strategy

Bangladesh needs a pragmatic plan to safeguard its trade and economic stability. This includes exploring new export markets, securing alternative shipping routes, and carefully managing foreign exchange reserves to navigate potential disruptions in international trade.

Selim Raihan is a Professor at the Department of Economics, University of Dhaka, and Executive Director, at the South Asian Network on Economic Modeling (SANEM). Email: selim.raihan@gmail.com 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.