Economists fear trade disruptions.

ISLAMABAD -- Economists and businesspeople have voiced grave concerns over Israel-Palestine war, which may cause serious disruptions in regional and international trade and markets.

The Express Tribune approached economists and business leaders to get their inputs in the changing scenario where Israel had started killing innocent and unarmed civilians in Palestine, which could trigger a wider conflict in the Middle East and was frustrating the business community.

'When it comes to Israel-Palestine conflict, Pakistan may have to face the double whammy of price volatility and disruptions in crude oil supplies,' renowned economist Faizul Haq said.

'Pakistan needs to keep a close eye on the emerging scenario and the resultant volatility in international crude oil prices. The conflict is showing signs of expanding and engulfing the broader region, and crude has already climbed for a second week in a row as Brent futures gained 88 cents on Friday to reach $93.26 per barrel.'

He explained that the ongoing conflict will continue to plague peace in the entire world in general and the Middle East in particular for seemingly a long-drawn-out period, and, as a matter of fact, Pakistan may have to withstand volatility and disruptions in a number of scenarios:

Read CPEC made Pakistan into trade, transit hub: PM Kakar

First, US further restricts the sale of Iranian oil in case of its active participation in the conflict as the international oil markets are already undersupplied, secondly Saudi Arabia and Russia extend their supply cuts beyond December 2023, thirdly, US and other major economies embark on strengthening their strategic oil reserves, and finally supply routes emanating from the Middle East come under the risk of blockades or attacks.

'In the short term, there was no effect as our imports and exports do not take place in Palestine. But if other countries are involved and the war expands, insurance premium of ships which carry our imports and exports will swell, and if the ships pay a high insurance premium, it will scale up cost of imports and exports which will ultimately boost prices of all products,' economist Dr Qaiser Bengali said.

'Secondly, we always need loans to run our matters, we will have to experience economic problems in seeking finances which come from international banks.'


To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT