Labor returns home, capital heads to Singapore

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Labor returns home, capital heads to Singapore

Published: 17 Apr. 2026, 00:04

Audio report: written by reporters, read by AI

Ko Young-kyung

The author is a research professor at Yonsei University’s Digital Trade Research Center.

More than 40 days have passed since the Strait of Hormuz was effectively blocked. On one side, lives are being lost in war. On the other, economies are nearing suffocation, particularly across energy-dependent regions in Asia.

People queue to receive liquefied petroleum gas cylinders from a Bharat Petroleum Corporation gas agency office in Hyderabad on March 31. [AFP/YONHAP]

In Surat, in India’s Gujarat state, textile factory workers began leaving their jobs as gas prices quadrupled. Many chose to forgo daily wages and travel 1,400 kilometers (870 miles) back to their hometowns. With fuel costs too high to cook proper meals, staying close to family became the more viable option. Of the city’s 1 million textile workers, about 250,000 have left. In Bahadurgarh, a hub for the footwear industry, roughly 40 percent of the 450,000 workers have also departed. Morbi, which accounts for 80 percent of India’s ceramic production, has effectively come to a halt due to gas shortages. The Philippines has declared a national energy emergency, while Indonesia, despite being resource-rich, has introduced fuel rationing to stabilize domestic supply.

Energy is only the beginning. Fertilizer costs and transport fees are rising, and food prices are expected to follow in quick succession. The burden falls first and most severely on low-income households, for whom securing the next meal is already a pressing concern. What begins as a supply disruption quickly becomes a livelihood crisis.

The data reflect this strain. The Asian Development Bank projects growth in Southeast Asia’s developing economies at 4.6 percent and South Asia at 6.3 percent, both down 0.2 percentage points from the previous year. The International Monetary Fund forecasts that growth in emerging and developing Asia will slow from 5.5 percent last year to 4.9 percent this year. At the same time, inflation in emerging economies is expected to rise from 3 percent to 4.9 percent, and could reach as high as 6.7 percent if the conflict persists. Growth is weakening while prices rise, creating a dual burden that is difficult for vulnerable economies to absorb.

Yet the same crisis is reshaping the flow of capital in the opposite direction. Assets managed by Dubai-based family offices total around $1.2 trillion, while the United Arab Emirates holds approximately $700 billion in overseas investments. After an Iranian missile strike hit Palm Jumeirah, a high-profile artificial island in Dubai, ultra-wealthy individuals in Asia began considering moving assets to safer financial hubs such as Singapore and Hong Kong. According to Reuters, a Singapore-based wealth management lawyer said that six or seven out of 20 Dubai-based clients had inquired about relocating their assets, with three already proceeding. Similar patterns were observed during the U.S.-China tensions and the Covid-19 pandemic. Wealth, unlike labor, moves quietly and swiftly toward stability.

Even if the Strait of Hormuz reopens, recovery for ordinary economies will take time. Supply chain experts estimate that normalization could require between eight and 13 weeks, given the backlog in shipping and production. The spring planting season has already been missed in several regions, and the Food and Agriculture Organization of the United Nations warns that the full impact on food prices could last until 2027.

People take pictures at the Marina bay waterfront in Singapore on March 24. [AFP/YONHAP]

Meanwhile, shares of Singapore’s three major banks, after an initial dip following the outbreak of war, have already returned to prewar levels. The inflow of capital from the Middle East has been cited as a contributing factor. In times of crisis, capital ultimately finds an exit, while labor is often forced to retreat. This divergence underscores a broader structural imbalance in the global economy.

The current crisis illustrates a familiar pattern: those with fewer resources move to survive, while those with greater wealth move to preserve and expand. This time is no exception.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.