Prolonged
geopolitical instability in the Middle East could have significant
economic consequences for Bangladesh, including higher oil prices,
imported inflation, exchange rate depreciation, pressure on foreign
exchange reserves, increased business costs and uncertainty in
remittance inflows, according to economists.
The observations
were made at a seminar titled "The Iran War and Its Impact on the Region
and Bangladesh", held at a city hotel and organised by Nexus Defence
and Justice (NDJ), a leading policy research institution in Bangladesh.
Speaking
at the event, Dr AMM Shahiduzzaman Quoreshi, Senior Associate Professor
at Blekinge Institute of Technology in Sweden, said Bangladesh's
vulnerability extends beyond external shocks and is rooted in several
domestic structural challenges.
"Bangladesh's long-term
vulnerabilities arise not only from external shocks but also from
structural weaknesses, including limited domestic value addition,
fragility in the banking sector, fiscal deficits, governance challenges
and money supply growth that exceeds productivity growth," he said.
Dr
Quoreshi noted that major geopolitical events have historically had
profound effects on the global economy. He cited the oil crises of 1973
and 1979 as significant turning points that demonstrated the close
relationship between geopolitical developments and macroeconomic
stability.
According to him, a prolonged conflict in the Middle
East could disrupt global energy markets and increase oil prices, which
would directly affect Bangladesh as a major energy importer. Higher fuel
costs would likely raise transportation and production expenses,
contributing to inflationary pressures across the economy.
He
also warned that sustained economic uncertainty could place additional
pressure on the country's foreign exchange reserves and exchange rate
stability.
Discussing investment trends, Dr Quoreshi said
Bangladesh's investment growth is driven by private sector investment,
public development expenditure and foreign direct investment (FDI).
"Although
foreign direct investment remains relatively modest, it contributes to
industrial diversification, technology transfer and export
competitiveness," he said.
He stressed the importance of
strengthening economic resilience through structural reforms and prudent
macroeconomic management to withstand external shocks more effectively.
The
seminar brought together policymakers, researchers and analysts to
discuss the possible implications of ongoing tensions in the Middle East
and their potential impact on Bangladesh's economy and development
prospects.
