How a US government shutdown could affect the Middle East

Lengthy federal shutdown could lead to flight delays and cancellations

US border control employees are deemed essential, so are still required to work during the shutdown. AFP

The US Congress failed to pass a budget on Tuesday, resulting in the federal government being shut down.

With a shutdown in place, federal agencies are required to halt all non-essential operations. This will affect a range of activities − from national parks to passport applications.

Viewed from overseas, a US federal shutdown might merely look like a domestic problem created by polarised politicians. But a closure of key federal services could have impacts abroad, too.

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What happens to visa applications?

Under the US State Department's shutdown plan, all embassies and consulates will remain open for national security reasons.

Passport and visa processing will continue as long as there are sufficient fees to cover operations. Non-essential official travel, speeches and other events will be curtailed.

Some foreign aid programmes, exacerbated by previous freezes on assistance by the Trump administration, could run out of money as well.

The US embassy in the UAE said in a post on X that scheduled passport and visa services at embassies and consulates overseas will "continue during the lapse in appropriations as the situation permits".

What about travel to the US?

In a shutdown, airport workers who screen travellers at airport security checkpoints, give flight clearances and verify people at border control are deemed essential, so they are still required to work. But longer queues or wait times could be possible.

Some airports had to suspend operations during a shutdown in 2019 when air traffic controllers called in sick, so there is a risk flights to the US could be subject to delays or cancellations.

US airlines have warned that the shutdown could strain American aviation and slow flights, as air traffic controllers and security officers would be forced to work without pay and other functions would be halted.

There is already a shortage of air traffic controllers on staff throughout the country.

Can packages still be sent to the US?

The US Postal Service is unaffected as it does not depend on Congress for funding.

It operates on revenue from postage, products and services rather than taxpayer dollars appropriated by Congress.

Is the US military affected?

During a government shutdown, all active-duty personnel, as well as National Guard who are currently deployed, must carry out their assigned duties with their pay delayed until the shutdown is over.

More than 330,000 of the Pentagon's 800,000 civilian employees will be furloughed.

Contracts awarded before the shutdown would continue, and the Pentagon could place new orders for supplies or services needed to protect national security.

Other new contracts, including renewals or extensions, would not be awarded, Reuters reported.

Payments to defence contractors such as Boeing, Lockheed Martin and RTX – formerly known as Raytheon – could be delayed.

How is the stock market reacting?

History shows that the stock market tends to be largely unfazed by government shutdowns.

A shutdown means the release of key economic data could be delayed, causing uncertainty on Wall Street.

Stocks were mixed the morning after the shutdown went into effect. Gold prices, meanwhile, surged to a record high on Wednesday, boosted by a weaker dollar and safe-haven demand.