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Stepping into global crisis
Preoccupied with domestic politics, Nepal remains unprepared for the effects of escalating war in the Gulf.Anurag Acharya
The wars in Ukraine and the Middle East are increasingly shaping a new global order, with eventual transition away from the post-World War II unipolar world, which was dominated by the United States and its allies. What will eventually emerge from this great flux of our times is uncertain, but unfolding events point towards the dawn of a highly volatile multipolar order with interconnected conflicts affecting all corners of the global population.
Russia’s ongoing war in Ukraine remains a slow-burning, high-casualty conflict with a territorial stalemate. Meanwhile, the conflict in West Asia—centred on US-Israel confrontation with Iran—has triggered a massive disruption of the global supply chain of goods, including petroleum flows from the Strait of Hormuz.
The war in the Gulf has pushed the cost of crude oil over $100 per barrel, indirectly boosting Russia’s revenues and prolonging the Ukraine war. On the other hand, the US and its allies appear divided in their response, which has allowed Tehran both strategic and moral grounds to prolong the war it did not start. Donald Trump’s tirade against the NATO member states that have refused to get drawn into the war not only damages the credibility of the office of the US President. It also exposes the anxiety of the most powerful man on earth, who seems to be running out of friends and allies.
Unfolding polycrisis
Greek historian Thucydides famously said, “Right, as the world goes, is only in question between equals in power, while the strong do what they can, the weak suffer what they must.” In the world that is now physically, economically and digitally interconnected, every major conflict will disproportionately affect the poorest in the Global South. Russia’s occupation war against Ukraine, which has now entered its fifth year, has already proved consequential for many developing nations. Available data suggests that there was a massive inflation—between 25 and 40 percent—in the costs of grains, including wheat and maize, after the war began, which remains volatile and generally over the pre-war levels. Israel-US war against Iran now threatens to send the global economy into a meltdown, with millions of job losses and unprecedented levels of inflation.
Unlike the war in Ukraine, the US-Israel and Iran are fighting a non-conventional war in the heart of a global financial capital. West Asia is not just a global financial hub. It is a melting pot that is home to some of the world’s richest people, whose extravagance and projected lifestyle have contributed to the booming real estate market in cities like Dubai, Doha, Abu Dhabi and Riyadh. These cities offer unmatched luxury in lifestyle, hotels, shopping and entertainment for their global residents and tourists who spend billions of dollars annually to create millions of jobs. There are currently an estimated 16 million South Asian migrants working in the Gulf Cooperation Council Countries (GCC), which includes close to 1.7 million Nepalis. The loss of jobs resulting from a protracted conflict will disproportionately affect Nepal and the region.
The spiralling conflict that has led to Iran bombing various cities in the region—most notably Dubai, Abu Dhabi and Doha—which host the US military assets, is tarnishing the reputation of these cities as the global oasis for luxury and comfort. Social media footage of the bombing at Palm Jumeriah and Doha airport, news of billionaires fleeing the city, leaving behind their expensive apartments and pets, will haunt the carefully constructed image of the region as the most livable and investment-friendly place on earth.
Iran’s choking of the Strait of Hormuz has led to a spike in global fuel prices. It is also creating a governance crisis closer to home in South Asia. People are queuing up for LPG cylinders used for cooking, and the costs of pretty much everything are expected to rise in the coming days, as there are no signs of de-escalation. Donald Trump has led the United States into a war which could now be protracted, as its global competitors, Russia and China, stand to benefit from it. Russian oil is suddenly finding a global market amid sanctions, while China has selective access to the Strait due to its ties with Tehran. The choking of Hormuz will also damage US credibility as the provider of maritime security in the region, allowing Beijing to present itself as an alternative. This alone is sufficient to force Washington towards a strategic re-thinking, only this time it does not hold all the cards.
Commanding the chaos
Following a landslide victory in the general elections, the incoming Rastriya Swatantra Party (RSP) government will face an unenviable task of navigating a fractured and volatile international system. Besides managing relations with the regional powers, which are now increasingly polarised over the ongoing wars, it will need to secure a reliable supply of petroleum and essential goods that can keep the inflationary pressures in check. While Nepal does not directly import its petroleum, it must still engage closely with New Delhi to ensure there is no panic on the streets, being mindful that India is scrambling to meet its own shortages in oil and LPG.
While the global and domestic headlines focus on the petroleum shortages, the government must not be blindsided by the fact that we will soon be entering a pre-monsoon season, when roughly 4 million households will prepare for the paddy season. They will need fertilisers like Urea and DAP, most of which are imported from India. While India produces some of its own fertilisers, it heavily relies on imports from countries like Oman, Qatar and Saudi Arabia, which are major producers alongside Russia and China. Even the domestic fertiliser plants in India rely on imported natural gas, which is the primary feedstock supplied mostly by the Gulf states. This should prompt our policy-makers to do serious homework on understanding the global and regional fertiliser supply chain, alongside initiating a back-channel conversation with New Delhi, to ensure Nepali households do not face food shortages next season.
Nepal can no longer afford to remain a passive observer of distant wars, whose consequences are now arriving at its doorstep. The convergence of geopolitical rivalries, disrupted supply chains, and economic uncertainty demands a level of strategic foresight that has often eluded our domestic and foreign policy thinking. Navigating the emerging multipolar world will require not only deft diplomacy with close partners like India, but also a fundamental rethinking of economic resilience at home. The latter may entail accelerating energy transition, primarily in LPG-based cooking and transportation. More importantly, it should also prod those in power to come up with a hybrid policy of gradually investing towards building a fertiliser reserve to meet emergency needs, while looking to stabilise the annual supply chain for the domestic market.
As the certainties of the old global order fade, Nepal’s ability to anticipate, adapt, and act decisively will determine whether it is overwhelmed by crisis or able to carve out stability amid the chaos. In the coming weeks, the RSP will be taking over the government reins and the parliament, but the party will not have the luxury of a ‘honeymoon period’ often associated with the new governments. They will be stepping into a crisis that cannot be addressed by simply having a parliamentary majority. They will need all hands on deck, in the house and beyond.




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