In a report titled ‘Military Escalation In The Middle East: Human Development Impacts Across Asia And The Pacific,’ the United Nations Development Programme highlighted that the conflict is “intensifying human development challenges throughout Asia and the Pacific.
The impact is reducing household purchasing power through increased fuel, freight, and input costs, leading to heightened food insecurity, strained public resources, and jeopardized livelihoods.”
The preliminary assessment released on Tuesday indicates that globally 8.8 million individuals are at risk of falling into poverty, with the military tension in West Asia potentially costing the Asia-Pacific region up to $299 billion.
In India, projections show that the number of people in poverty could surge from around 400,000 to 2.5 million. The report further states that the global count of people thrust into poverty as a result of the conflict could rise from approximately 1.9 million to nearly 8.8 million across different scenarios, with South Asia bearing the largest burden, ranging from about 1.7 million to over 8 million due to its substantial population and vulnerability to income and price shocks.
China is predicted to see a more moderate increase in individuals at risk of poverty, estimated to rise from around 115,000 to over 620,000, reflecting minor proportional changes on a vast population base.
According to the report, highlighting the estimated poverty impacts following the 28-day conflict (under the most severe scenario with an 8-month adjustment), India’s poverty rate is projected to escalate to 24.2% post-crisis, up from 23.9%, resulting in 2,464,698 more individuals falling into poverty.
After the crisis, an estimated 354,033,698 individuals are projected to live in poverty in India, compared to 351,569,000 before the crisis.
The UNDP simulation evaluates the conflict’s effects on the Human Development Index (HDI) across countries in the region. It suggests that Iran’s HDI might decline by an equivalent of roughly one to one and a half years of human development progress.
“India is expected to lose approximately 0.03–0.12 years of HDI progress, with Nepal following at around 0.02–0.09 years and Viet Nam at 0.02–0.07 years. In contrast, the estimated impacts on HDI for China remain relatively small, ranging from roughly 0.01–0.05 years,” the report states.
The report also highlights that among the region’s larger importers, India imports over 90% of its oil needs, obtaining more than 40% of its crude oil and 90% of its LPG imports from West Asia. Additionally, more than 45% of India’s fertilizer imports come from West Asia, while 85% of domestic urea production relies on imported regasified liquefied natural gas.
Furthermore, the impact of the conflict extends to remittances and migrant workers.
“For many nations, the scale of direct exposure to Gulf labor markets and remittance flows is significant and impactful,” the report mentions. “India has the largest absolute exposure,” citing data from the Ministry of External Affairs indicating that 9.37 million Indians were residing in Gulf Cooperation Council (GCC) countries as of October 2024, contributing about 38-40% of India’s inward remittances.
The military escalation is disrupting employment and livelihoods throughout the Asia-Pacific region, affecting economic activity, mobility, trade, and supply chains.
“In India, job risks are especially prominent in sectors reliant on micro, small, and medium enterprises (MSMEs) that depend on imported energy and inputs or are linked to Gulf trade. This is particularly critical in a labor market where approximately 90% of employment is informal.
“Small businesses in hospitality, food processing, construction materials, steel manufacturing, and gems and diamonds may experience rising input costs, supply shortages, and delayed or canceled orders, leading to negative repercussions on jobs, hours worked, and business sustainability. Such pressures could result in reduced working hours, job losses, and disruptions, particularly for informal and migrant workers and MSMEs with limited financial stability and restricted access to credit,” it states.
In India, the costs for raw materials used in medical devices are expected to surge by around 50% due to disruptions near the Strait of Hormuz, while wholesale prices of medicines have already climbed by 10-15%.
“Simultaneously, there are notable opportunities for nations to enhance long-term resilience through adaptive social protection, stronger local and regional supply chains, and diversified energy and food systems,” remarked UN Assistant Secretary General and UNDP Regional Director for Asia and the Pacific Kanni Wignaraja.
