The Red Sea has become the epicentre of escalating hostilities amid an unprecedented surge in military tensions since October 2023, with implications resonating globally.

The conflict, primarily instigated by Houthi attacks and countered by international military coalitions, not only poses risks to regional stability but also threatens the intricate web of international trade. Bangladesh, whose economic fortunes are intricately tied to global commerce, has already started feeling the adverse impacts of this crisis.

Geopolitical Chess in the Red Sea and Its Implications for BangladeshThe Houthi attacks on commercial and military vessels in the Red Sea, particularly targeting Israeli ships, have triggered a series of responses from the international community. The formation of Operation Prosperity Guardian by the United States, along with subsequent airstrikes by the US and Britain, underscores the gravity of the situation. However, the broader implications extend beyond the immediate military actions.

The attacks have disrupted global trade routes, leading to a significant surge in freight charges. Shipping companies are rerouting vessels, avoiding the Red Sea and opting for longer journeys around Africa, adding substantial delays and costs for exporters and importers.

Economists warn that sustained attacks in the Red Sea could contribute to the deterioration of global trade. While the immediate impacts might not be fully evident, the cumulative effect could lead to prolonged operational uncertainty for shipping companies, akin to the disruptions caused by the onset of the Covid-19 pandemic.

US military escalation and strategic interests

The US-led international coalition's response to the Houthi attacks raises questions about the underlying motivations and strategic objectives.

Analysts suggest that the Red Sea’s strategic significance has long been recognised by the United States, dating back to the October 1973 war. The recent Houthi attacks could serve as a pretext for the US to militarise the region, secure control over critical straits like Bab al-Mandab, and expand its sphere of influence.

Experts argue that the US aims to diminish Chinese influence, obstruct its trade routes, and limit Russia’s regional capabilities, turning the Red Sea into a focal point for international competition.

The Red Sea crisis may be indicative of economic clashes between Western nations and China, especially in the context of China’s Belt and Road Initiative. Central to these concerns is the examination of the economic impacts of Houthi attacks on global trade and how it might fuel a broader economic clash.

Houthi containment and Yemen’s political dynamics

Understanding the internal dynamics of Yemen is crucial to deciphering the root causes of the Red Sea crisis. The Houthi movement’s control of the Hudaydah Red Sea port and its subsequent attacks on global targets have shattered the notion that their threats were confined to Yemen or the Middle East.

The Houthi attacks in the Red Sea are not only ideologically driven but also part of a broader political strategy. By targeting commercial vessels, the Houthis aim to position themselves as key regional supporters of Palestinian resistance while simultaneously increasing their leverage in negotiations with Saudi Arabia.

Ongoing backchannel negotiations between the Houthis and Saudi Arabia add another layer of complexity. The Houthis may see the attacks as a means to secure recognition, end military interventions and receive international aid, using the economic disruptions caused by the Red Sea crisis as leverage.

Bangladesh’s economic dilemma
For Bangladesh, the Red Sea crisis presents a critical economic dilemma. Already grappling with the aftermath of disruptions in the Black Sea due to the Russia-Ukraine war in 2022 and a struggling economy, the surge in freight charges, order cancellations and potential supply chain disruptions pose serious challenges.

Our export sector is particularly vulnerable. Apparel exporters, the largest contributor to the country’s foreign exchange earnings, report order cancellations and loss of competitiveness because of delays and rising freight costs. As shipping companies impose surcharges, freight charges from Bangladesh to Europe and America have surged by at least 40%, with the potential for further increases.

The shortage of 40-foot containers, disruptions in shipping schedules and rising freight costs are causing a ripple effect, reminiscent of the challenges faced during the Covid-19 pandemic. The redirection of shipping routes and the impact on lead times could prompt buyers to explore alternatives, affecting the competitiveness of Bangladesh’s exports.

The fear of wider regional conflict and the associated rise in oil prices further compound the economic challenges for Bangladesh. The impact on commodity prices looms large, with the potential for disrupted imports and exports, further jeopardising the nation’s economic well-being.

Summing up, the present Red Sea crisis is not just a regional conflict; it is a global struggle with far-reaching implications. Bangladesh finds itself at the forefront of the economic challenges posed by disrupted trade routes. International collaboration and diplomatic efforts are crucial to resolving the conflict and averting further economic turmoil, ensuring a stable and prosperous future for the nations caught in the crossfire.
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The writer is News Editor of the Daily Sun