Geopolitical Tensions in the Gulf: Assessing the Potential Impact on Nepal's Economy and Stability

The world is once again drawn into a vortex of power struggle. The escalating tension between the United States and Iran is not merely a signal of regional conflict; it carries serious implications that could destabilize world peace, energy supply, international trade, and the political balance.

While this conflict appears superficially as a simple power struggle, beneath the surface lies a competition for global dominance, control over energy sources, the arms market, and economic supremacy. The war, which started in Palestine, has now spread to Iran. Where it will spread next remains uncertain. War has never produced a permanent victor in history. It has only resulted in losses for humanity, peace, and civilization.

However, this article is not focused on the discussion of a world war. It centers on how its effects will impact Nepal. The crucial question is how deeply a global crisis can affect Nepal and what we must do to avoid it. This is because negative impacts of the war have already begun to show in Nepal within a few days of its commencement. Delaying now means inviting risk. Therefore, initiating internal preparations immediately is imperative. The first foundation for this is national unity.

The most difficult but realistic question is this—is Nepal capable of withstanding such a global shock? The answer is not satisfactory. Nepal is not yet self-reliant, our preparations are incomplete, and a clear long-term national vision is lacking. The Gulf crisis may now expose precisely these weaknesses. If we fail to address this in time, we will fall into a serious economic, social, and political quagmire.

If the war escalates in the Gulf region, its impact will not be limited to Nepal; countries employing Nepali workers, such as Malaysia, Israel, and the Gulf nations, will gradually be unable to provide employment at the previous level.

We have long lived under the illusion that external crises will come and resolve themselves with time. But the Gulf crisis shows that the problem is not outside, but within us. An economy sustained for decades by remittances, consumption based on imports, and the neglect of the production sector have made Nepal extremely vulnerable. It is a reality that the country runs on the money sent by Nepali workers sweating in countries like Saudi Arabia, Qatar, and the UAE. But if those foundations shake, it will not just be an economic crisis; it is certain to devastate our entire economy.

If the war escalates in the Gulf region, its impact will not be limited to Nepal; countries employing Nepali workers, such as Malaysia, Israel, and the Gulf nations, will gradually be unable to provide employment at the previous level. This is also affecting the entire Europe to a great extent. Consequently, a major crisis will strike our economy, which is dependent on foreign remittances. Therefore, we need to consider what we will do before that happens.

Initially, this will lead to fuel shortages and price hikes burdening public life. Market instability will increase, and fear will spread regarding foreign employment. Subsequently, a cycle will begin where remittances decrease, workers return home, and industrial production declines. Ultimately, this situation could culminate in an economic recession, permanent unemployment, and social discontent. This is not an exaggerated analysis; it will be the natural consequence of our structural weaknesses.

In such a situation, the role of political leadership is decisive. Crises always reveal the true nature of leadership. But history has shown that delays in decision-making, policy instability, and corruption have weakened our governance system. If this trend continues, the Gulf crisis will push Nepal towards internal disintegration rather than external shock. The question is now clear—will our leadership become part of the solution or remain part of the problem?

If their skills, experience, and manpower can be utilized correctly, this very workforce can become the foundation for Nepal's reconstruction.

The perspective on the economy must also change. Crisis management is not just about distributing relief. It is a historic opportunity to restructure the economy. Long-term solutions are impossible without a clear policy that prioritizes production, exercises restraint on imports, protects small and medium-sized enterprises, and encourages domestic investment. The reality that the remittance-based model cannot sustain in the long run must be accepted. Meanwhile, the time has come to view returning migrant workers not as a burden, but as an opportunity.

If their skills, experience, and manpower can be utilized correctly, this very workforce can become the foundation for Nepal's reconstruction. This segment holds the potential to bring new energy to the agriculture, construction, and technology sectors. A new opportunity for an agricultural revolution may also arise in Nepal.

The Gulf crisis also exposes another profound truth. Dependence on energy and food is a serious risk for any nation. Maximizing the use of hydropower, expanding electric vehicle adoption, and achieving self-sufficiency in agricultural production are no longer just development agendas; they are mandatory priorities linked to national security. Through these, Nepal can be led towards the path of self-reliance and independence.

Nepal must also maintain balance and self-respect in its foreign policy. The need today is to adopt a balanced diplomacy centered on national interest, rather than leaning towards any power bloc. While maintaining a policy of non-alignment and neutrality with good neighborly relations, the principle of 'no one is a stranger, everyone is a friend' must be established to strengthen development and economic diplomatic ties.

If we become united, maintain a visionary outlook, and make the right decisions, this very crisis can become the foundation for a self-reliant, strong, and new Nepal.

Information management is equally important during times of crisis. Rumors, confusion, and fear weaken society. Therefore, the flow of fact-based information, responsible communication, and the protection of social trust are essential.

Ultimately, the greatest strength is national unity. History has shown that when Nepal is united, no crisis has been able to bring it down. But today's challenge is different. It is not just an external attack, but also a test of our internal weaknesses. Therefore, rising above partisan interests, national consensus, a shared vision, and a spirit of cooperation are the indispensable needs of the hour.

The Gulf crisis is a warning, a test, and an opportunity for Nepal. Warning—about how risky our dependency is; Test—about how capable our leadership is; and Opportunity—to improve the direction of our development. The time now is not to linger in the status quo, but to make bold decisions. History offers opportunities, but it does not wait forever. If we still fail to establish clear policies, responsible leadership, and strengthen national unity, the Gulf crisis will not remain merely an external event; it will become Nepal's internal crisis.

But if we become united, maintain a visionary outlook, and make the right decisions, this very crisis can become the foundation for a self-reliant, strong, and new Nepal.

(Pokharel is a leader of CPN-UML and a former Minister)