Kamal Ghorui
What began as a conflict between the US, Iran and Israel, is now sending ripples far beyond the Middle East, spilling across the global economy. According to a report by the United Nations Development Programme (UNDP) the crisis risks pushing nearly 8.8 million people into poverty, with South Asia accounting for the largest share. The report, titled “Military Escalation In The Middle East: Human Development Impacts Across Asia And The Pacific”, said that the conflict is “widening human development pressures across Asia and the Pacific.”It further added, “Through higher fuel, freight, and input costs, the shock is diminishing household purchasing power, raising food insecurity, straining public budgets, and weakening livelihoods.”
According to a preliminary assessment, the economic impact of the escalation may cost the Asia-Pacific region up to $299 billion.The assessment indicates that Iran could see its Human Development Index (HDI) decline by an amount equivalent to roughly one to one and a half years of human development progress. India is projected to lose around 0.03–0.12 years of HDI gains, while Nepal and Viet Nam may see losses of 0.02–0.09 years and 0.02–0.07 years respectively. The report also flagged food security concerns, stating that countries such as India, Pakistan, Bangladesh, Nepal and the Philippines could face additional pressure due to falling remittances linked to reduced Gulf economic activity.The decline comes as due to soaring oil prices, which have long stayed amid the $90 and $100 per barrel range, even rising beyond it. “Through higher fuel, freight, and input costs, the shock is diminishing household purchasing power, raising food insecurity, straining public budgets, and weakening livelihoods,” it said.On the trade and supply chain front, the assessment uncovered major impacts in 25 out of 36 countries under the analysis, driven by freight surcharges, higher war-risk insurance premiums, route diversions, and delays in the delivery of intermediate and consumer goods. The report also highlighted the impact of the conflict on remittance flows and migrant workers.“For several countries, the scale of direct exposure to Gulf labour markets and remittance flows is both substantial and consequential,” the report said.The war has now stretched beyond six weeks with no sign of an end. The US-Iran peace talks have so far failed to yield any conclusion, though hopes are being pinned on a second round of discussions. According to Reuters, negotiating teams from the United States and Iran are expected to return to Pakistan later this week to resume efforts to end the conflict in the Gulf, Pakistani and Iranian officials said on Tuesday, days after the initial talks ended without a breakthrough.
