An analysis by the Asian Development Bank (ADB) indicates that disruptions to shipping routes have already increased food costs and delivery times.
“Supply risks extend beyond energy to key industrial inputs such as petrochemicals and fertilizers, with serious implications for agriculture and food production,” the ADB said in a statement.
“Tourism- and remittance-dependent economies face compounding vulnerabilities beyond these initial shocks. Furthermore, the conflict is increasing uncertainty and tightening financial conditions across the region, putting pressure on currencies and capital flows,” it said.
The ADB announced a financial support package to help its developing member countries mitigate such economic and financial impacts resulting from conflict in the Middle East.
ADB President Masato Kanda said the bank will deliver rapid, flexible and scalable assistance to help countries manage immediate pressures and strengthen long-term resilience.
“This builds on our strong track record of supporting Asia and the Pacific through periods of global uncertainty,” Kanda said.
The bank said it is ready to deploy fast-disbursing budget support and trade and supply chain finance to secure the import of essential goods. The ADB said it has ample resources to safeguard existing operations while expanding emergency support through its countercyclical lending buffer.
The intervention consists of two main components. The first is fast-disbursing budget support to help countries facing heightened fiscal pressures. This includes the use of the Countercyclical Support Facility to help governments stabilize economies and mitigate the impact of shocks on the lives and livelihoods of those most at risk.
The second component is the ADB Trade and Supply Chain Finance Program (TSCFP), which supports the private sector to ensure critical imports like energy and food continue to flow. The bank said it decided to reactivate support for oil imports under the program on an exceptional basis for this limited period.
It said the decision acknowledges that economies and people across the region are being severely affected by the rapid surge in oil prices and supply chain disruptions. The bank said it is closely monitoring global market developments, particularly regarding energy price volatility, inflationary pressures, and external account balances.
The bank said it started discussions with all severely affected member countries on immediate support. It plans to work with governments, development partners, and the private sector to ensure coordinated responses to maintain economic stability and protect the poor.
