Bangladesh’s Brouhaha: Political, economic chaos and what the future holds for Dhaka

Bangladesh

The Indian subcontinent is simmering. Yes, it’s summer, and climate change is only one reason for it. A political Pandora’s Box has been unleashed, and the ghosts of emerging economies past have resurfaced. The region is a tinderbox. Bangladesh, a country born out of the turbulence of the 1971 war, has seen brutal military coups and is now undergoing one of its toughest political periods, at least in this century.

August 15 is here, and this date is steeped in history and pride in the region. It’s India’s Independence Day, but it is also the death anniversary of Sheikh Mujibur Rahman, the charismatic founding leader of the sole Bengali state.

Sheikh Hasina, the daughter of Rahman, who had governed the country for 15 years, resigned, fled the nation, and landed in India as a group of students, political opponents, and citizens stormed her residence. Scenes of chaos in Dhaka unfolded as the military announced an interim government to be led by the famed Nobel Laureate, Muhammad Yunus, who arrived in the country and addressed citizens.

Sheikh Hasina has been defined by her family history, her father’s legacy, and even his assassination. She escaped the military coup in 1975 that took her family out because she was abroad and then in exile in India. Fast forward to 2024, she escaped another coup, once again in exile, and back in India. History doesn’t repeat itself, but it sure does rhyme with time.

Women Leaders At the Helm in South Asia

As euphoria picks up in the United States with the potential of the first-ever woman president (although we’ve seen this script before and Donald Trump stood in the way the first time and could very easily do it again), a sobering reminder is that countries in the Global South—Sri Lanka, India, and even conservative Islamic nations like Pakistan and Bangladesh—have had women leaders even in their early infancy of democracy.

Sheikh Hasina was not the first but the second woman Prime Minister of Bangladesh. Begum Khaleda Zia, her rival from the Bangladesh Nationalist Party (BNP), was the first. Sheikh Hasina’s rise to power back in the day symbolized hope for a better tomorrow for one of the poorest nations. She prioritized secularism in a conservative society and tried to ensure strong democratic institutions over coups. Posterity was her focus. But the flip side of the coin, which her critics often highlight, is her turn towards authoritarianism, stifling institutions, subverting elections, arresting her opponents, and operating with a draconian, iron-fisted approach.

Hubris over humility perhaps led to an egregious miscalculation where Sheikh Hasina thought her grip on the country was unbreakable, especially after securing her fourth consecutive five-year term in office.

Her exit is reminiscent of times of popular mass uprisings, like the Arab Spring or the Iranian Revolution, where civilians and students protested against what they saw as tyrannical autocratic rule. Her departure, while celebrated, also raises pertinent questions about political lacunae and the worrying sign of growing extremism and attacks on minority groups.

Muhammad Yunus Takes Over the Reins

One of Sheikh Hasina’s fiercest critics was Muhammad Yunus, arguably the most famous Bangladeshi in the Western world. The Nobel laureate is credited with the creation of Grameen Bank and microfinance lending. Yunus has his task cut out for him as he is now back on Bangladeshi soil and tasked with leading the interim government. Yunus said he hoped to “restore calm and rebuild Bangladesh after 15 years.” On one hand, it’s profound to see an eminent economist take charge; he was the students’ choice as the masses rejected military rule. But it remains to be seen if this is a new hope or merely a band-aid for a deep political and economic gash.

The situation in Dhaka has introduced more turbulence to the region and keeps New Delhi up at night. Both the Prime Minister and the External Affairs Minister have made statements assessing how New Delhi is closely monitoring developments.

Impact of Bangladesh Crisis On India

On the one hand, the Awami League was seen as friendly to India. Although Teesta disputes existed, by and large, it was a strategic relationship with Sheikh Hasina, especially in a neighbourhood traditionally hostile to India—cue nuclear adversaries in Pakistan and China.

Furthermore, India had made deep investments in Bangladesh, in infrastructure connectivity and security aspects, and had a growing trade relationship. While Delhi hedged its bets on the Awami League, the rival Bangladesh Nationalist Party (BNP) has been historically unfriendly to India. Meanwhile, Jamaat-e-Islami (JI) is almost an unacceptable alternative, with its hardline stance, and both parties share a camaraderie with Islamabad.

US’s Reaction to Bangladesh Issue

Washington is at its wit’s end with the war in Ukraine, the dire humanitarian situation in Gaza, a tense stand-off in the Middle East, and simmering tensions between Israel and Iran, as well as Hezbollah in Lebanon. If that’s not enough, add a cantankerous election year into the mix, with the most bizarre month in American politics—an assassination attempt on former President Donald Trump and an incumbent President exiting the race.

The State Department has issued anodyne statements regarding the situation in Bangladesh, stating they’re “monitoring the situation” and “calling for calm.” Washington has a lot on its plate, and Bangladesh isn’t at the top of the agenda. Still, it will keep a watchful eye, knowing that a political vacuum in China’s neighbourhood could allow Beijing to leverage the chaos and expand its influence.

In terms of influence, the ousted Prime Minister, Sheikh Hasina, has alleged that Washington had insidious interests in the region, particularly regarding St. Martin's Island. It’s a tiny stretch of land, spread over merely 3 square kilometers. Its size, however, has been inflated by reports that Hasina claimed she could have remained in power had she willingly parted ways with St. Martin’s for the United States.

At a time of consolidating the Indo-Pacific against Beijing’s belligerence, this small yet geopolitically significant island, located in the Bay of Bengal, holds considerable weight for America’s regional maritime control.

Hasina's remarks point to the possibility that the U.S. viewed the island as a critical asset, suggesting influence over their stance during the political upheaval in Dhaka. These claims remain unfounded but underscore strategic interests in the Bay of Bengal and the Indian Ocean.

Scenes of Chaos from Bangladesh

On land, the scenes of anarchy that engulfed Dhaka included protestors attacking the lofty golden statue of Sheikh Mujibur Rahman, fondly referred to in Bangladesh as Bangabandhu or “Friend of Bengal.” His grandson and Sheikh Hasina’s son, Sajeeb Wazed Joy, has been rhapsodizing in television interviews and, in a melancholic tone, stated that Bangladesh was ungrateful for everything his family had sacrificed their lives and service for. He went on to state that “Building a new Bangladesh is not possible without the Awami League.”

But the desecration of Bangabandhu’s statue has ripple effects on the changing perception of dynastic politics, a problem that’s been enmeshed in South Asian politics—India, Pakistan, and Bangladesh, all of whom have had kleptocratic dynasties. Shifting sands as Gen-Z eschews the sycophancy that was once prevalent among Boomers and Gen X’ers.

Back in 2019, Pervez Hoodbhoy, the eminent physicist and author from Pakistan, argued that Bangladesh had overtaken Pakistan, its once Western counterpart. Hoodbhoy’s thesis was that Dhaka didn’t see itself as a security state and prioritized human development and economic growth. He called it an “Asian Tiger” and said, “eschewing militarism in favor of human development.” Only time will tell if that prophecy ages like milk or if Bangladesh will bounce back from the political quagmire it finds itself in.

While there are dangerous undercurrents, political violence, and extremism that have arisen, many scholars note that Bangladesh is also a country brimming with activists, artists, writers, thinkers, intellectuals, and civil servants—a strong civil society.

What Future Holds for Bangladesh and Its Neighbours?

This is reminiscent of the movie ‘The Third Man’, where Orson Welles’ character Harry Lime evocatively says: “In Italy for thirty years under the Borgias, they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance.”

So, while it’s hard to read the tea leaves, perhaps there is something to be sanguine about in Bangladesh’s long-term fundamentals.

As of now, the outlook looks bleak around India’s neighbourhood. Afghanistan in 2021, with the civilian government falling to a resurgent Taliban. Sri Lanka’s political and economic turmoil erupted in 2022. Then 2023 saw Pakistan’s political tumult, and now 2024 is witnessing turmoil in Bangladesh. No soothsayer wants to touch what will happen in the region in 2025.

There are SAARC optimists who insist that, despite political differences, the trade bloc can build economic bridges in one of the least economically integrated regions. The conundrum is the same: economic bridges can’t be built across regions while literal bridges are being singed.