Iran War Shatters South Asians’ Gulf Dreams

    Mamata Tamang arrived before dawn for her early morning flight from Kathmandu, Nepal, to Sharjah, United Arab Emirates, on March 2, expecting to land by afternoon. Instead, by 10 a.m., she was still outside the international terminal, surrounded by crowds of confused passengers scrambling to find any sign of their flights.

    Flights via Kuwait; Doha, Qatar; and Abu Dhabi, Dubai, and Sharjah in the UAE that carry hundreds of workers to new jobs every day from Nepal have virtually disappeared since the United States and Israel began their war on Iran on Feb. 28.

    For the hundreds stranded outside Kathmandu’s airport almost every day, the war thousands of miles away was not their immediate concern. What worried them more was the possibility of arriving late or losing the jobs that they had spent months securing.

    “Obviously, I’m scared,” said Tamang, 35, describing seeing videos of the war on Facebook. “But I’m not leaving by choice—it’s an obligation. I have to make money so my children can have a better future here.”

    Like Tamang, some 2,300 Nepalis leave every day for employment, mostly to Gulf countries. It’s a familiar story across South Asia, as limited opportunities and low wages push tens of thousands of workers from Bangladesh, India, Nepal, Pakistan, and Sri Lanka toward what many workers call the “Gulf Dream.”

    Of the 35 million foreign workers in the six Gulf Cooperation Council countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—more than 20 million are from South Asia. Their labor has helped transform desert skylines, building skyscrapers, highways, and stadiums, representing the region’s rise over the decades. However, most migrant workers are trapped in physically demanding, low-paying jobs that are also the backbone of these countries’ economies. In a region where work-related deaths among South Asian workers have long been common, the war has now introduced new uncertainties threatening their lives and livelihoods.

    “Migrant workers are the most vulnerable,” said Arjun Kharel, a research fellow at the Kathmandu-based Centre for the Study of Labour and Mobility. “They are in larger numbers than the native population, and they’re less likely to stop working or return home, unlike others, because their families depend on them and have debts to pay off.”

    As of March 27, at least 17 civilians had been killed across the Gulf nations, 10 of them from Bangladesh, India, Nepal, and Pakistan. Those identified include a 29-year-old Nepali security guard, Dibas Shrestha; a 48-year-old Bangladeshi water delivery driver, Saleh Ahmed; and Murib Zaman, a Pakistani driver in his 40s, all of whose incomes were a lifeline to their families back home.

    Collectively, millions of migrants in the Gulf power South Asia’s economy. In Nepal, remittances contributed roughly 26 percent of its GDP in 2024, according to the World Bank. Bangladesh recorded a surge in remittances that same fiscal year, accounting for 6.6 percent of its GDP, with similar levels in Sri Lanka and Pakistan. India’s share is smaller, but it is still the largest recipient of remittances globally.

    Irudaya Rajan, the chair of the India-based International Institute of Migration and Development, said South Asian governments cannot afford to underestimate the implications of the current crisis, which could combine the economic shocks of the COVID-19 pandemic and the 2009 financial crisis. He warned that prolonged conflict could push people further into poverty, adding that authorities should not just evaluate the economic consequences but also consider the personal toll on migrant workers.

    “We should not look at migrants as cash cows,” Rajan said. “Our attitudes toward migrants need to change. There is a person behind the remittances, and we must safeguard their health, well-being and safety—physical and mental.”

    As videos of explosions circulate on social media, families of those already in the Gulf are gripped by anxiety and fear for their loved ones, while those waiting to leave worry about potential financial losses. Experts say stalled migration is not just a delayed journey but can ripple through daily life, including interruptions in education and pressures on rural livelihoods, which can quickly snowball into a debt crisis.

    Outside Kathmandu’s airport, first-time travelers, many of whom borrowed thousands of rupees for broker fees in order to take up their jobs, were just as rattled as those already in conflict zones. Many said they were confused yet hopeful of joining their jobs soon. Suman Adhikari, a 27-year-old hotel worker on vacation, said his employer in Abu Dhabi had granted him additional leave due to the security situation but that he was still worried about the economic prospects of his host nation after the war was over.

    Economists have warned that a prolonged crisis in the Gulf could expose a deeper structural weakness, as South Asia remains highly dependent on migrant income. There are already signs, if the conflict drags on through April, of perhaps the worst slump since the Gulf War in the 1990s. One Goldman Sachs economist predicted a 14 percent decline each in Qatar’s and Kuwait’s GDP this year, while Saudi Arabia and the UAE could see it contract by 3 percent and 5 percent, respectively.

    Selim Raihan, a professor at Dhaka University and the executive director of the South Asian Network on Economic Modeling, said the slowing of Gulf economies, along with weak construction activities and labor nationalization measures, would not be just a one-time remittance shock for the region but would gradually erode its most dependable foreign exchange channel.

    “That would affect exchange rates, reserves, household consumption, poverty reduction, and even the political economy of development financing,” Raihan said. “This is not only a migration story. It is also an energy story, a trade story, and a macroeconomic story. That combination is what makes the present crisis more dangerous than a routine overseas labor shock.”

    These shocks are already being felt across South Asia. In the Indian city of Bengaluru, restaurants are warning of shutdowns due to a shortage of cooking gas, while the city of Pune has closed crematoriums run on liquefied natural gas (LNG), as 90 percent of the country’s LNG imports pass through the Strait of Hormuz, currently choked by the war. In Pakistan, authorities have reduced petrol rations to officials, canceled outdoor government events, and implemented remote work to cut fuel use. Meanwhile, Bangladesh has suspended university classes and started fuel rationing, and Sri Lanka has declared Wednesdays a holiday.

    Sumedha Dasgupta, a senior analyst for Asia at the Economist Intelligence Unit, said that given low nominal income levels for all South Asian nations, barring India, the region is “one of the most exposed to an economic downturn” if energy supplies are disrupted for months. Such disruptions or price hikes can hurt the economy, raising prices for consumers, widening trade deficits, and straining government budgets.

    “Most countries will be forced to pass on higher fuel prices to consumers and brace for the secondary impact of higher fuel inflation on the economy,” Dasgupta said. “The logistics around the return of a large number of migrant workers will also be difficult to manage for these smaller nations without help from India and China.”

    While many families and migrants seek to return home and find work, experts such as Kharel warn that South Asian countries are ill-prepared to absorb tens of thousands of returnees. Countries such as Nepal have reintegration programs, but the incomers largely remain disconnected from the wider economy, limiting their scope. He said the prospect of mass return would be “unimaginable,” just as some 6,000 Nepalis have registered with the government so far to return from the Gulf.

    Other experts believe that the war could change the perception of the Gulf itself as a safe destination, arguing that South Asian governments should diversify labor migration corridors to reduce risks. Raihan of Dhaka University says migration is indispensable for millions of households and that countries in the region must ensure it is safe, legal, and orderly.

    “If policymakers treat the present moment only as a temporary disruption, they will miss the larger lesson,” he said. “The Gulf corridor has generated enormous gains, but it has also exposed how fragile those gains can be when geopolitics turns hostile.”

    But for the millions of people toiling in conflict zones or waiting for a flight to take them there, the politics of war feels distant. They are more worried about sending money home on time and feeding their families and dreaming that their children won’t have to follow in their footsteps.

    “If I’m abroad, at least I’m sending money to my family,” Tamang said. “I plan to stay three more years for the sake of my children. If I don’t die, I’ll return home.”

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