What does a missile exchange between Iran and Israel have to do with the price of a taxi ride in Banjul?
At first glance, very little. The Gambia has no stake in the conflict and is not a major player in Middle Eastern politics. Yet when tension rises between Tehran and Tel Aviv, eventually many Gambians are hit by price increases of imported products, transport fares, and fuel.
So, an important question arises: Why do countries that are not directly involved in any geopolitical conflicts pay part of the economic cost of those conflicts?
The answer gives an insight into a wider picture of the politics of the present-day world. In an increasingly interconnected world, the consequences of conflict no longer stop at national borders. They can be found in energy markets, shipping lanes, financial institutions, and global supply chains. Small and import-reliant countries are particularly sensitive to geopolitical unrest elsewhere, as it can easily turn into a domestic economic issue.
The recent confrontation between Iran and Israel is but the latest example of the new paradigm: small countries’ economic vulnerability is a key part of their national security.
When Geopolitics Travels Through Markets
The bulk of the international debate about the Iran–Israel conflict has been about military deterrence, regional stability, and the potential for escalation. It’s natural to have these concerns. However, one of the most significant, but not so widely talked about, parts of the crisis, though, is the economic consequences.
The first one is due to the strategic location of the Strait of Hormuz. In 2025, about 20 million barrels of oil transited through the waterway, which was some 25 per cent of the world’s seaborne oil trade, according to the International Energy Agency (IEA). The IEA rates the Strait as one of the world’s most important energy chokepoints, and its disruption could have a major impact on the world’s energy markets.
Markets can, in fact, often react before any disruptions occur. As uncertainty about the Gulf grew, tanker insurance costs, freight rates, and risk of shipping in general spiked sharply in reaction to recent flare-ups of tension in and around the Gulf, Reuters reported. Even if it is not actually unstable, merely the fear of instability can drive up the cost of shipping around energy and goods in international markets and have repercussions that reach far beyond the Middle East.
This can thus quickly turn into a global economic crisis, originating from a regional security crisis.
This is increasingly how geopolitics works in the 21st century. International conflicts and their negative impact, not only through the use of war power but also due to economic consequences, have become one of the main ways to impact a country far from the conflict.
The Gambia’s Vulnerability to External Shocks
While these are abstract fluctuations on the global markets, they nevertheless have concrete implications for The Gambia.
The nation’s economy continues to be very reliant on imports of petrol, foodstuffs, and manufactured goods. The Gambia continues to be closely dependent on external trade flows, tourism, remittances, and the state of the world markets, according to the World Bank. This makes the economy especially vulnerable to external shocks from beyond the frontier.
This dependence gives rise to structural vulnerabilities.
When international fuel prices go up, transport costs increase. Businesses face higher operating costs. The cost of imported goods becomes more expensive, while household budgets will come under greater pressure as they will be tighter. In the wake of this energy shock, and other commodity shocks that accompanied Russia’s invasion of Ukraine, many African governments have witnessed similar developments in their economies, a testament to how external shocks can rapidly turn into domestic economic miseries.
These impacts tend to be more than just on energy. The Gambia’s supply chain to the European, Asian, and Middle Eastern markets can be impacted by shipping disruption. When the transportation costs of goods increase and/or there are delays, it can lead to rising prices of everyday items, regardless of whether such goods are directly related to the conflict itself.
It’s not just about participating in the global markets. Virtually every country today is a part of the global economy. The more critical question is whether states can withstand shocks if they happen.
The Unequal Distribution of Vulnerability
One of the paradoxes of the present-day globalisation is here.
Some states have more policy options available to them that can help mitigate the impact of an external crisis. These governments have the options of tapping strategic stocks, subsidising fuel prices, intervening in markets, or providing financial support to the affected industries or households.
While smaller economies have fewer options.
External shocks, commodity-price fluctuations, and tensions in the region are all cited in so many previous assessments of risks by the International Monetary Fund (IMF) to the economic stability of The Gambia. The IMF, in its recent assessment of the country, has cautioned that the disturbances in the trade, energy, tourism, and financial flows sectors could create economic pressures for fragile economies.
Although the country has proved to be resilient in recent years, its vulnerability to developments elsewhere in the world is still high. This means that often the countries that are least involved in the actual geopolitical decision–making process get some of the more immediate economic impacts. When regional powers confront one another, small states are rarely consulted. However, they frequently suffer part of the fallout that ensues, in the form of redirection of commerce, tax hikes, and higher prices.
This fact brings to mind a crucial aspect of the global political landscape, which is often neglected: vulnerability is by no means evenly distributed.
Beyond the Middle East
The importance of the Iran–Israel crisis is more than just about the current conflict.
The episode is a reminder that a lot of the issues that we face today with security are economic rather than just military. Increasingly, the ability of the state to absorb external shocks, keep supply chains going, and to protect households from market shocks is a measure of national resilience. This is especially the case in other Global South countries, like those in Africa, that are heavily dependent on imports and where this can create a rapidly escalating internal economic strain as a result of external developments.
For small states, this could be an important policy issue.
What are some ways that governments can decrease the amount of unnecessary energy that they depend on from foreign countries? How can economies diversify their sources of trade and investment? What can states do to become more resilient to events emanating far beyond the state’s borders that impact the state?
These are not merely economic issues. They are strategic ones.
As countries like The Gambia have shown, a new understanding of national security is needed to go beyond the conventional perception of military threat. For millions of people, what happens in the economy and how they are dependent on others, is becoming a reality of security.
Looking Beyond the Traditional Centres of Power
International crises tend to be studied from the point of view of the states that are concerned. Naturally, the media should focus on military developments, diplomatic manoeuvres, and calculations of the big powers.
But this only tells half the tale.
The Iran-Israel crisis, therefore, looked at from Banjul instead of Tehran, Tel Aviv, or Washington gives another facet of the world of politics. It illustrates the way in which economic systems are interdependent, and risk can be passed on over large distances, and that the consequences of geopolitical competition can often be far-reaching.
It is not just to teach that there are global consequences to conflicts in the world.
Instead, it’s because the countries that are reverberating the most from the geopolitical economic shocks are the ones that have the least say in the economic decisions that are causing those shocks. In an era of deep interdependence, the defining divide in global politics may not be between states that possess power and those that don’t. It may increasingly be between states that can withstand shocks and those that can’t.
Therefore, the impact of geopolitical conflict is felt in a country like The Gambia, not in terms of missiles, weapons, or troops, but rather by escalating prices, trade, and economic uncertainty. Those costs don’t go away once the world’s focus moves on.
