Geopolitical instability and energy security: a review of financial and developmental implications for Bangladesh

Abstract

Geopolitical uncertainty has increasingly become a core element in global energy security and has significant implications for developing economies which are heavily reliant on energy imports. Bangladesh is one of the most vulnerable countries in this aspect as it highly depends on the imported fossil fuels and liquefied natural gas (LNG) for its industrial development and electricity demand. This review paper explores the linkages between geopolitical turmoil and energy security and what it means to Bangladesh financially and developmentally. The study is a semi-systematic qualitative analysis of peer-reviewed scholarship, institutional reports and policy documents, to generate a synthesis of evidence drawn from the international energy organisations and national energy regulatory authorities. The analysis also shows that the major geopolitical turmoil such as the upheaval in Russia-Ukraine, the warfare in Middle East and the Red Sea insecurity have driven up energy prices, rise in import cost, decline in foreign exchange (FX) reserves of the country, and added more inflationary pressures in the Bangladesh economy. The study also reveals that the on-going energy crisis is having a negative impact on industrial production and makes long-term national development planning difficult. The article argues that increasing the share of renewables and strengthening energy cooperation in the region and reforming strategic energy governance are key solutions to Bangladesh's economic resilience and sustainability of development. The review brings together financial and development views and thus, presents an original contribution to the interdisciplinary literature on energy geopolitics in the context of developing economy in South Asia.