Iran War deals devastating collateral damage to Bangladesh

America’s imperialist aggression against Iran has sent shockwaves throughout the global economy. With the Strait of Hormuz closed – leading to the “worst energy crisis ever” – far away Bangladesh, which is heavily dependent on the Gulf States for its energy demands, stands to be among the worst affected.

Rising food prices, energy shortages, and industrial shutdown: a nightmare scenario is being prepared for the poor of this bankrupt and economically stagnant country. Grave news indeed for the newly elected BNP government, which promised reform and prosperity for post-revolutionary Bangladesh.

Poor foot bill for imperialist war

Bangladesh imports 60-65 percent of its total energy sources (namely LNG) from the Gulf states. As a result, the crisis has had an immediate and existential impact.

Iran did agree to extend safe passage to Bangladeshi ships, as it is a ‘friendly nation’. But this has made no meaningful difference – Bangladesh has no proper shipping fleet of its own, and depends on foreign infrastructure and vessels for regular delivery of fuel. Already, energy imports were costing Bangladesh $12 billion per year. Now, rocketing energy and shipping costs are forcing the government to buy oil tankers at double the price on the spot market. Bangladesh’s finance minister has estimated that the war could add upwards of $3 billion to its import bill.

The administration has very few means to cushion the impact. It has been unable to find an alternative supply, and only 30-40 days of fuel lie scattered in depots around the country, which has no proper strategic reserve. To counter the worst effects, the government of Bangladesh is trying to secure a $2 billion foreign loan to pay for energy subsidies. Given that the nation already spends nearly half of its yearly budget on loan repayment, this will make the situation even more precarious.

With prices rising and supplies dwindling, the government has taken emergency measures to save power and prioritise fuel for the electrical grid – above all, the garment industry. Shops have been ordered to close at 7pm, government holidays have been extended, and schools have been ordered to shift half of their weekly classes online.

But this prioritisation has led to fuel drying up at pumps. For the last month, long lines have been seen at every functioning fuel pump in the country, with people waiting upwards of 15 hours just to fill their vehicles!

Illegal syndicates have taken to stealing fuel from gas pumps at night, and rage-induced attacks on pump workers have become commonplace. One gas station employee in Narail was murdered after a truck driver was refused fuel after waiting in line for eight hours. Managers have been threatened that their stations will be burned to the ground. In response, the government has deployed a paramilitary force to guard fuel depots and dispatched mobile courts to charge fuel hoarders.

With the long queues eating into people’s working hours, and with the meagre wages of auto-rickshaw and ride-share drivers squeezed, it is the poor who are being hit the hardest.

But this is just one aspect of the crisis.

LNG is also critical for the production of urea fertiliser. 35 percent of the world’s supply of this critical material has been cut off, and to save power, the government has shut down four of Bangladesh’s five state-owned fertiliser plants. This comes just weeks away from Bangladesh’s critical fertilisation period for Boro rice, the primary rice crop in the country. A lack of fertilisation and/or irrigation – which is mainly done through diesel-based pumps – during this critical period would mean a severe drop in crop productivity. In the best-case scenario, Bangladesh will be forced to import rice at a significantly higher price as shipping costs are soaring: the price of rice has already shot up 28 percent compared to last year. In the worst case, it could lead to a famine.

But it’s not only rice that is being affected. The Middle East and Iran are important sources of soybean oil, spices, fruits, and pulp for Bangladesh, deliveries of which have now all but ceased. Meanwhile, the raised shipping and energy prices have constricted supplies of sugar, chicken feed, wheat, and other important products of the food supply chain.

All of this has translated to a significant spike in prices at the Bazaar. In the last month, soybean oil has risen 12 percent; snake gourds 45 percent; tomatoes and pumpkins 15 percent; important varieties of chicken 52 percent, and eggs by 10-15 taka in just a couple of days. All of these overwhelmingly affect the lower classes, who can no longer afford important nutrients like protein.

For the poor of Bangladesh, all of these factors are compounding together to create a nightmare scenario. Workers, who were already struggling with scraping by, are now forced to make the choice between food, rent, or healthcare and their children’s education. Unsurprisingly, many workers we have spoken to are now choosing to take their children out of schools as education costs become untenable.

Pillars of the economy undermined

The war is having profound impacts on the solvency of the Bangladeshi economy as a whole.

Analysts were warning that half the textile factories could be gone by the end of 2026 / Image: Fahad Faisal, Wikimedia Commons

Overseas employment is a fundamental pillar of the Bangladeshi economy. On the one hand, with few job opportunities at home, it is a key source of work for the youth. On the other hand, nearly $30 billion worth of remittances flow into Bangladesh from the diaspora every year. Overwhelmingly, this depends on the over seven million Bangladeshi workers in the Middle East – Saudi Arabia alone is the source of $7 billion in remittance income for Bangladesh. Previously, analysts and government officials alike cited climbing remittance figures as a source of hope for the ailing economy. Now, the war has left this crucial lifeline uncertain.

Attacks on the Gulf countries have ruined the tourism industries there and brought many businesses, services, and construction companies to a halt, leaving thousands of workers unemployed. The work that is continuing is taking place in dangerous wartime conditions – already, at least five Bangladeshi workers have lost their lives to missiles and drone attacks. Workers looking to travel out of the country are finding themselves stuck as hundreds of flights have been cancelled.

At home, Bangladesh’s all-important garments sector – which accounts for 85 percent of its export income and employs over 40 million workers – was already struggling to keep up with competitors in Vietnam, India, and China. Even prior to the war, the country was facing severe gas shortages, which had led to a 30 percent collapse in textile production capacity. Analysts were warning that half the textile factories could be gone by the end of 2026!

Now the industry finds itself facing an almost insurmountable challenge. To save power, factories are now running with lights dimmed and air conditioning turned off, forcing workers to labour in the heat. The increase in shipping costs and the closure of airspace over Iran and the Middle East mean delays in fulfilling orders and a further increase in production costs. Already the industry was operating at a razor-thin profit margin of 6-9 percent. The consequences of the war could lead to them not being able to fulfil orders, or losing their profitable role as the preferred textile sweatshop of the world.

Unsurprisingly, western brands are taking note and are now looking into buying from North African countries such as Morocco, which are both nearer to Europe and better shielded from the war.

Capitalist crisis or socialist revolution

Already, the situation in Bangladesh was precarious. Now, an imperialist war taking place thousands of miles away – over which Bangladesh has absolutely no control – is shaking the country like an earthquake.

Food scarcity, industrial collapse and unemployment, uncontrollable inflation – all the conditions that led to 2024’s July Revolution – are being dramatically exacerbated. Any hope of the Rahman government bringing prosperity and stability to the country has been dashed. With the situation of the poor becoming absolutely desperate, new explosions are inevitable.

But Bangladesh is just one of many poor countries caught in the storm. Across Asia and Africa, it is the super-exploited, the sweatshop workers of the world, who are being forced to foot the bill for America’s imperialist ambitions and the world crisis of capitalism.

In Bangladesh’s July Revolution, like all the Gen Z Revolutions, millions came out against corruption, unemployment and inequality and overthrew their government. But the consequences of this war sharply expose that political change was not enough. Capitalism is at the root of all these problems, and so long as Bangladesh and its neighbours remain part of its system, they will be made to suffer.

The current crisis is revealing this fact to millions of people. Bangladeshi villagers who would only talk about local events just a few months before now discuss the war in Iran. As the brazen actions of imperialism start to affect the daily lives of workers, they will be desperate for an alternative to the status quo, and all sorts of desperate and convulsive outbursts could occur. Only world socialist revolution offers a way out.