Collateral Casualties of Great Power Conflict: The 2026 Iran War and the Energy-Remittance Double Shock in South Asia

  • Ahmad Faizul Rashid 1 * Author
  • Nurul Izzati Zulkifli 2 Author
  • Mohamad Syafiq Ismail 3 Author
  1. University of Malaya
  2. University of Science Malaysia
  3. Universiti Malaysia Sabah

* Corresponding author: Ahmad Faizul Rashid

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Abstract

The 2026 Iran War, initiated on 28 February 2026 through coordinated United States and Israeli strikes on Iranian territory, rapidly escalated into a regional conflict with profound ramifications for the global economy. While scholarship on the conflict has focused primarily on its military and geopolitical dimensions, the developmental consequences for non-belligerent, energy-importing economies in South Asia remain underexplored. This paper introduces the Energy-Remittance Double Shock (ERDS) framework: an analytical construct designed to explain how developing economies with high fossil fuel import dependency and large Gulf Cooperation Council (GCC) diaspora populations face simultaneous, mutually reinforcing external shocks from geopolitical conflicts in which they have no strategic role. Drawing on the vulnerability economics tradition of Lino Briguglio and the remittance development literature of Dilip Ratha, the paper applies the ERDS framework to four South Asian economies: Bangladesh, Sri Lanka, Nepal, and Pakistan. Findings demonstrate that all four countries have experienced acute energy supply disruptions, rapid inflation, currency depreciation, and heightened remittance insecurity following the closure of the Strait of Hormuz in early March 2026. The paper argues that structural exposure to the ERDS dynamic reflects longstanding failures of energy diversification and labour market governance, and concludes with a set of policy recommendations oriented toward building economic resilience against geopolitical conflict shocks.

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Section: Articles
Issue: Vol. 2 No. 1 (2026): Open Journal of Interdisciplinary Studies
Published: 03/20/2026
Pages: 9-32
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How to Cite

Rashid, A., Zulkifli, N., & Ismail, M. (2026). Collateral Casualties of Great Power Conflict: The 2026 Iran War and the Energy-Remittance Double Shock in South Asia. Open Journal of Interdisciplinary Studies, 2(1), 9-32.
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