The ongoing war in Iran has directly translated into lost income and savings for workers in Bangladesh, a nation heavily dependent on imported fuel. Tariqul Islam, a 53-year-old father of four, lost his savings about one and a half years ago due to setbacks in his clothing business and now faces sharply cut income from ride-sharing on his motorbike. Islam reports spending hours in fuel lines due to supply disruptions, making it difficult to support his family, including a daughter at university and a son in college. He stated, “My family was managing fairly well through ride-sharing. But after the fuel shortage began, I would buy fuel one day and run the bike for two days. As a result, I had to sit idle for one day, which reduced my income.” He fears that if the situation continues, his family will be forced to “move back to our village and find some other way to earn a living.”
Workers Bear the Brunt
Islam’s experience reflects a broader economic squeeze across Bangladesh, where energy shortages have disrupted daily life, slowed industrial output, and raised concerns about economic growth. The nation’s reliance on imported fuel makes it acutely vulnerable to global tensions that drive up costs and strain supplies. Across Asia, governments face similar pressures as the war-driven surge in energy prices rattles economies dependent on imported oil and gas, much of which passes through the Strait of Hormuz, a chokepoint for about a fifth of global trade. Higher fuel costs are leading to inflation and squeezing household budgets, while industries from manufacturing to transport face rising operating costs and supply disruptions.
Garment worker Mosammet Runa, 35, expressed fear for her family’s future if the war continues. Runa and her husband collectively earn about $400 a month to support their family of six. She emphasized the industry’s critical role for the working class, stating, “Millions of people like us depend on this industry. It is how we survive.” She called for an end to the fighting, asserting, “We are innocent people. The world should not make us victims.” The garment sector, the backbone of Bangladesh’s economy, employs around 4 million workers, predominantly women from rural areas, and generates approximately $39 billion annually.
The State's Austerity Measures
The Bangladesh government faces strained finances, with an anticipated additional expenditure of $1.07 billion on LNG subsidies in the April-June quarter alone if global prices remain high. Authorities have imposed austerity measures to manage the crisis, including shutting fertilizer factories to divert gas to power plants, restricting evening hours for shopping malls, and introducing fuel rationing. While conditions have eased slightly in recent days due to increased government supplies, concerns persist. The World Bank, in April 2026, less than one month ago, warned that a prolonged Middle East conflict could fuel inflation, widen the current account deficit, and strain public finances through higher energy subsidies. Jean Pesme, the World Bank’s division director for Bangladesh and Bhutan, noted that the economy already faced “pre-existing vulnerabilities and challenges, in particular on the economic and employment front,” and that “The rising costs now are obviously making the fiscal situation more difficult.” He cautioned against further fuel price increases, citing potential harm to farmers and agriculture.
Capital's Vulnerability and Competition
The energy crunch is driving up costs and threatening Bangladesh’s garment exports. Anwar-Ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, reported that factory output has dropped by 30% to 40% for various reasons, with the situation worsening since the U.S. and Israel launched their war against Iran. Business costs have risen by about 35% to 40%. Shipments to Europe and the U.S. have fallen between 5% and 13% in recent months. Chowdhury expressed concern that customers could lose confidence in Bangladesh’s ability to deliver, potentially allowing competitor nations such as India, Vietnam, and Cambodia to gain market share. Alvi Islam, director of Arrival Fashion Limited, noted that manufacturers face higher costs for petroleum-based materials like sewing threads, poly bags, and cartons, in addition to increased spending on diesel generators to cope with frequent power cuts. His company, which exports products worth about $40 million annually, now runs generators at least four hours a day during production, leading to a “quite significant” increase in the cost of doing business for exporting garments in the past month. The Asian Development Bank, in late April 2026, less than one month ago, cut growth forecasts for developing Asia and the Pacific, predicting growth of 4.7% in 2026 and inflation rising to 5.2% as oil prices climb and financial conditions tighten.