The United States is already involved in the region, with its navy including aircraft carrier Dwight D Eisenhower patrolling the strategic Straits of Hormuz. Washington has sided with Saudi Arabia in the conflict, and has been piling pressure on Iran with international sanctions.
West Asia has been polarised by the dispute, with the UAE and Israel taking Saudi Arabia’s side against Iran, while Qatar which is still being blockaded by Saudi Arabia and the UAE being much more sympathetic to Iran.
Qatar is the country with the highest number of Nepalis, with nearly 600,000 workers. Saudi Arabia has 350,000 Nepalis, and the rest are scattered in other Gulf countries.
If open hostilities did break out between Saudi Arabia and its allies against Iran, Nepal would be hit indirectly by soaring oil prices. Even after Thursday’s attacks, oil prices already rose 5% in international markets. Nepal spent Rs131 billion last year in petroleum imports from the Gulf via Indian refineries, and the amount doubled in the last five years. More than 15% of Nepal’s total import bill is made up by petroleum which is sourced in the Gulf and bought from Indian refineries.
However, experts say, South Asian economies will be hit much more directly if remittances take fall due to a future conflict. Of the South Asian countries, Nepal is the most dependent on remittances with the $6.6 billion it earns annually from overseas workers coming mostly from the Gulf. Remittances are worth 31% of Nepal’s GDP, the highest proportion in the world – even higher than labour exporting countries like Kyrgyzsan and Haiti (see map).