By P.K.Balachandran/Daily News
Colombo, Jaunary 28: Bangladesh is in a state of political and economic flux. There is a palpable absence of a unifying and competent authority, essential to stem the uncertainty and put the country on a definitive path to stability and progress.
True, Bangladesh’s 173 million people are breathing the fresh air of freedom after 15 years of Sheikh Hasina’s authoritarian rule. But the euphoria which followed her ouster in August last year is waning. Today, political uncertainty, administrative paralysis and economic chaos mark the once dynamic and thriving Bangladesh.
Except for the university students and the Jamat-e-Islami, few are singing hosannas for Dr.Muhammad Yunus, the head of the interim government who goes as the “Chief Advisor” to the Bangladesh President. Received by Bangladeshis with great enthusiasm in August 2024, the 85 year old Nobel Laureate is now seen as an effete head of an amorphous Advisory Council. The council is not knit together by a shared ideology or a well-defined political programme. The result is policy paralysis and administrative inaction, affecting all sections of society and the economy.
An unprecedented alienation from India, which is accused of propping up Hasina for 15 years, and a marked tilt towards Pakistan, have combined to create uncertainties on both the economic and political fronts besides increasing regional tension.
There is a growing feeling that it is time the Muhammad Yunus regime began preparations to give way to a politically sensitive and effective government formed after a free and fair parliamentary election. The present decision to have elections in 2026 is not welcomed by most, except the students (who installed Yunus) and the Jamar-e-Islami (which cannot do well in elections).
The army has historically played a major role in Bangladesh politics. But this time round, it prefers to remain on the side lines. If it staged a coup, it will lose the dollars it rakes in by participating in UN peace keeping operations. However, the present army chief, Gen. Waker-Uz-Zaman, is backing the Yunus regime though not overtly.
Economic Situation
The economy of Bangladesh is at a critical juncture, struggling with both long-standing structural problems and newly emerging issues. Though exports and remittances have shown improvement in recent times, continuing macroeconomic instability, high inflation, and political unrest continue to affect prospects of sustainable growth says Dr Selim Raihan of Dhaka University and executive director of South Asian Network in a piece in The Daily Star.
Inflation is still level, shredding real incomes and further increasing the financial vulnerability of the bulk of the population. Economic uncertainty is being exacerbated by a deteriorating law and order situation. Labour unrest over wages marks different sectors including the export-earning garment sector. Extortion, running into millions of “Takas”, that was once the monopoly of Hasina’s Awami League, is now largely in the hands of the Bangladesh Nationalist Party (BNP) which is smelling a return to power and financially fortifying itself to fight elections.
The banking sector is badly in need of reform, given the high levels of non-performing loans. In the midst of the chaos, USAID-funded projects were stopped on the orders of President Trump who is reviewing all foreign aid. There are over 100 projects in Bangladesh being implemented with USAID funds amounting to millions of dollars.
Foreign Policy Missteps
The critical relationship with India (Bangladesh’s only neighbour), has suffered a grievous blow since the August 5 revolution. On its part, India has taken the unceremonious ouster of its protégé Sheikh Hasina, very badly. Formal relations are cold though not overtly hostile. But at the popular level, relations are very hostile almost like India-Pakistan relations.
Governments on both sides are doing nothing to stop it because such paranoia and jingoism help the rulers build their domestic popularity. Indians are using the alleged anti-Hindu and pro-Pakistan policies of the Yunus regime to damn Bangladesh. On the Bangladesh side, the anti-Indian tirade links all the woes of Bangladesh to India’s blindly backing Hasina.
While Indian hotheads are calling for military action against the Yunus-led Bangladesh, a prominent Bangladeshi commentator Prof.Shahiduz Zaman of Dhaka University is calling for a nuclear treaty with Pakistan, and even for the cutting off of the “chicken neck” which connects mainland India with its North Eastern States. If it is cut off, India will be exposed to another Chinese invasion.
Hindu radicals are portraying the August 5 revolution as anti-Hindu while Bangladeshi radicals portray the shelter given to Sheikh Hasina as a continuation of India’s “anti-Bangladesh” policy.
Even though Bangladeshis know that India cannot hand over Shaikh Hasina to stand trial in the special anti-corruption court or to face other criminal charges, officials of the Yunus government have been consistently seeking her extradition. This embarrasses India, given the fact that it has had close relations with her family from the days of her father and founder of Bangladesh, Sheikh Mujibur Rahman. To rub salt into the wound on India, an Advisor in Yunus’ council, Mafuj Alam, said that Hasina’s Awami League will not be allowed to Contest elections in Bangladesh describing it as “fascist”. Alam is said to be close to the Jamat-i-Islami and Yunus.
According to sources in Bangladesh, the Awami League is down but not out. After all, it had struggled for the freedom of Bangladesh from Pakistan and Sheikh Hasina had bought prosperity to Bangladesh, which at its birth in 1971, was described as a “basket case.” Sources in Dhaka say that though the BNP has the greatest amount of mass support now, the Awami League still commands about 8% of open support which reflects at least 15% of actual but covert support.
There has been no high level political engagement between Bangladesh and India since June 2024 when Sheikh Hasina paid a State Visit to India. There has been no meeting or even a conversation between Yunus and Indian Prime Minister Narendra Modi. But Foreign Ministers S.Jaishankar and Touhid Hossein have met on the side lines of a UN meeting and Indian Foreign Secretary Vikram Misri had journeyed to Dhaka to smoothen the rough edges in the official relationship.
What direction the bilateral relationship will take cannot be accurately predicted, especially with Pakistan and China fishing in troubled waters. But well-wishers of Bangladesh-India ties hope that both will take into account the fact that there is an umbilical cord which ties them.
Bangladesh is surrounded on three sides by 4000 km of India. And India needs Bangladesh to transit to its North Eastern States. In June 2024, India formally acknowledged that Bangladesh is an “indispensable partner in the development of India’s north-eastern region.” Trade ties are strong and in India’s favour. In fiscal year 2024, India’s exports to Bangladesh amounted to US$ 11.06 billion. The total trade between the two countries was US$ 12.90 billion, giving India a huge advantage. Bangladesh’s dependence on India for various essential commodities is huge.
India’s formal position on Bangladesh is that it wants “constructive cooperation” and that its relations with Bangladesh are not tied to the latter’s relations with other countries. India has been working on physical connectivity covering multi-modal transport and cross-border trade and transit infrastructure for seamless cross-border movement of people, goods and services, as well as energy connectivity and digital connectivity.
To facilitate easier cross-border travel India is pledged to extend the e-Medical Visa facility to people from Bangladesh. India had agreed to open a new Assistant High Commission of India in Rangpur as a step to facilitate expeditious consular and visa services for the people of north-west Bangladesh. Based on availability and to the best of its abilities, India would continue to support Bangladesh with supplies of essential commodities.
However, it is very unlikely that Sheikh Hasina, who is in India in exile, will be sent back to Bangladesh to face trial in the anti-corruption court. India’s ties with Hasina’s family are deep set, going back to the 1970s. If the Yunus government puts Hasina on trial and bans the Awami League from contesting elections, normalization of ties with India will be that much more difficult.
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