Rupin Banker, co-founder of Strategic Global Alliance, on why emerging economies need resilient capital amid global instability
The outbreak of war in the Middle East has done more than shake global energy markets and political alliances. It has exposed how vulnerable many emerging economies remain to shocks that begin far from their shores but quickly arrive through increased fuel and food costs, currency pressure and investor sentiment.
“I’ve spent a lot of time in the Gulf. They have the resources and political leadership to bounce back, quickly,” says Rupin Banker, an infrastructure and supply chain finance specialist. “But for emerging economies, like India, Brazil, Indonesia, and some parts of South East Asia, the impact will be felt for years to come.”
“When conflict breaks out in a region as important as the Middle East, emerging economies feel the impact immediately. Energy prices rise, shipping becomes more expensive, currencies come under pressure and social security programmes take a hit. Ultimately, the question is whether these economies have the capital structures to withstand them.”
Capital under pressure
For over a decade, Banker has been a sought-after financial adviser for fast-growing economies across Asia looking to raise private capital from institutions in Europe and the US. Through Strategic Global Alliance, a global financial advisory company he co-founded, he has helped the governments of India, Thailand and Indonesia unlock billions in private investment for infrastructure and social security projects.
For Banker, the lesson of the Iran conflict is clear. “Emerging economies cannot treat geopolitical disruption as a temporary external problem. They must build financial systems that are more resilient, better capitalised and less dependent on short-term flows.”
For energy importers, the pressure can be severe. Higher oil and gas prices widen existing deficits in supply and demand, weaken local currencies and force central banks to keep interest rates higher for longer. That makes borrowing more expensive for businesses, households and governments.
“Energy shocks are never just energy shocks,” Rupin Banker says. “The cost of diesel affects farmers. The cost of shipping affects retailers. The cost of fertiliser affects food prices.”
One of the first shocks reported in March was Indonesia’s state-run and -funded food programme, the largest in the world, as food prices and inflation took an immediate hit.
From crisis response to resilience
This is where emerging economies face a difficult trade-off. Governments want to protect citizens from sudden price increases, but many already carry high debt burdens. Broad subsidies may provide temporary relief, but they can weaken public finances and reduce money available for long-term investment.
Banker argues that the better answer is not more emergency aid or short-term budget support, but deeper access to investable capital.
“Emerging economies need capital that can support resilience before a crisis, not only in the aftermath of crisis,” he says. “Resilience should be built before a crisis strikes - through sustained investment in energy security, local food systems, logistics, infrastructure, domestic manufacturing and small businesses that form the backbone of these economies.”
The consequences reach far beyond the Middle East. Asian economies reliant on imported energy, African countries exposed to food and fertiliser costs, and frontier markets dependent on foreign capital can all be affected.
For Banker, the immediate challenge is inflation. The longer-term challenge is confidence.
“When investors become nervous, capital tends to retreat to safer markets,” he says. “It is in those moments that emerging economies must be able to demonstrate what investors demand most: credible institutions, clear and consistent regulation and a pipeline of bankable projects.”
Making resilience bankable
This is why private institutional capital matters because it can provide long-term financing that is less volatile than speculative flows. But private investors, wealth and pension funds need transparent governance, reliable contracts, currency-risk solutions and projects with realistic revenue models.
“Private capital follows good policy, it does not create it,” Banker says. “Governments that wait for uncertainty to arrive before building investor relationships will always find themselves a step behind. Investor confidence must be laid during calmer times.”
There is also a strong case for blended finance. Development finance institutions and public bodies can use guarantees, insurance and first-loss capital to reduce risk for private investors. These tools can help fund renewable energy, ports and agricultural supply chains.
The Iran conflict has strengthened the argument for energy diversification, too. Countries reliant on imported fuel are more exposed when global supply routes are disrupted. Investment in renewables, grids, storage and regional power markets is an economic security priority.
“Energy independence is too narrow a phrase,” Banker says. “What emerging economies need is energy resilience. The point is to reduce vulnerability to one route, one supplier or one global price shock.”
Aid will remain vital in humanitarian emergencies. But aid alone cannot protect economies from repeated shocks in energy, trade and finance.
“The Iran conflict is a warning,” Banker says. “Emerging economies need stronger buffers, deeper local markets and more long-term investment.”
“In a more unstable world, capital will matter as much as policy,” Banker says. “The countries that attract patient, productive investment will be better placed to withstand the next shock.”
Eleanor Thomas is a writer for Comment Central.
