Saudi conflict risks another economic blow

The missile attacks by the Houthis on Saudi Arabia, the largest source of Bangladesh’s remittance inflows and crude oil, pose another blow to the economy already reeling from the US-Israel war on Iran.

The kingdom hosts about 3.5 million Bangladeshis, who sent $1.95 billion in the first three months of the fiscal year, which is 19.2 percent of the total inflows, according to data from the Bangladesh Bank.

Last fiscal year, Bangladesh received about $5.85 billion from Saudi Arabia, which is about 16.4 percent of the total inflows, making it the largest source of remittance.

At a time when job creation at home remains bleak, Saudi Arabia’s Crown Prince Mohammed bin Salman’s ambitions to transform Saudi Arabia from an insular, oil-dependent nation into a global hub for business and tourism offered a glimmer of hope to Bangladesh’s vast unskilled labour.

The kingdom remains the largest destination of manpower exports for Bangladesh, shows data from the Bureau of Manpower, Employment and Training. In September alone, Saudi Arabia issued clearances for 32,915 workers.

But the Iran-backed Houthis’ attacks now are testing Salman’s multitrillion-dollar drive to remake the Saudi economy.

If the strikes on vital Saudi infrastructure seen in recent days continue for long, it spells bad news for Bangladesh’s migrant workers and the inflow of remittance, one of the two pillars of the economy.

It could reduce employment opportunities and eventually force migrant workers to return, said Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre.

Even then, scores of Bangladesh’s migrant workers are in an agonising state of suspense after the kingdom’s civil aviation authorities suspended flight operations from Riyadh’s King Khalid International Airport until October 17 and are running Dammam’s King Fahd International Airport at limited capacity.

Restrictions on flight operations at Saudi Arabian airports have affected 61 flights, including 22 direct and 39 transit services, impacting at least 8,381 passengers, according to the latest figures from the Civil Aviation Authority of Bangladesh.

For migrant workers who have strict deadlines to join work, a missed flight can be devastating by way of employment risk, visa validity and the cost of rearranging travel.

So far, remittance has not been impacted, but if the conflict prolongs, it can.

Shama Obaed Islam, state minister for foreign affairs, warned of possible consequences for remittance from the escalating Middle East conflict.

The government is exploring new overseas employment markets and opportunities for returning workers, she told the media yesterday.

The immediate priority should be the safety of Bangladeshis in the region, Zillur said.

Other than remittances, Saudi Arabia accounts for roughly 35 percent of Bangladesh’s crude oil imports.

Two Bangladeshis were killed and 27 others injured after a missile strike on the Riyadh airport on Saturday. At least 13 people were killed and more than 300 others injured in the attack.

Of the wounded, 15 are undergoing treatment at hospitals, according to the Bangladesh Embassy in Riyadh.

Five were initially in critical condition, but four are now out of danger. Only Saffat Rahman, who arrived on an Umrah visa, remains critical, said the report signed by embassy Counsellor Muhammad Reza-e-Rabbi.

The remaining 12 injured workers were released after primary treatment.

The embassy said it is monitoring the situation and stands ready to provide emergency assistance.

It also urged Bangladeshis in Saudi Arabia to remain vigilant, avoid risky and crowded places, and comply with instructions from Saudi authorities.

The embassy also warned that collecting, sharing or publishing conflict-related photographs, videos and information on social media could constitute a punishable offence under the Saudi law, and advised expatriates against storing or exchanging such material on their phones.

Former ambassador M Humayun Kabir, also the president of the Bangladesh Enterprise Institute, called for balanced engagement with the parties involved, stressing that Bangladesh should protect its national interests without unnecessarily alienating important partners.

“The conflict has placed Bangladesh in a diplomatically difficult position,” he said.