Wednesday 24th of July 2024

Bangladesh wedged between political upheaval and economic crises in 2023
Saimum Parvez
Region : Asia, South Asia, Bangladesh, Economy,
Issue : Politics,
For Bangladesh, the two most important trends in 2022 were a strong comeback of political opposition and the country’s myriad economic challenges. These critical and interrelated trends represent a grim scenario that will likely affect Bangladesh in the coming years.
In recent years, the strong economic growth of Bangladesh has been portrayed as a neoliberal success story and poster child of development. The legitimacy of the long-ruling Awami League (AL) regime came from its promises of economic growth and infrastructure development. Until 2022, the creeping authoritarianism and democratic backsliding were largely offset by narratives of development success.
Despite the ruling regime’s grandiose promises, Bangladesh experienced an economic setback in 2022. Prices were hiked as inflation increased, foreign reserves were depleted and the banking sector saw unprecedented irregularities and corruption. According to the World Economic Forum, Bangladesh will continue to face sustained inflation, debt crises and severe commodity price shocks in the coming years.
In May 2022, the Bangladeshi government announced that 100 per cent of its population had access to electricity. But after two months people started to suffer from severe load shedding and called the government’s claim into question. The revelation that the government had been paying a staggering amount for capacity charges for quick rental power plants and controversial coal-fired power deals while increasing electricity and fuel prices made many outraged.
As inflation hit a 10-year high and foreign exchange reserves sunk, Bangladesh sought a $4.5 billion loan from the International Monetary Fund (IMF) over a three-year period and US$1 billion from the World Bank. As IMF loans come with conditionalities — including institutional and price reforms — the government was forced to remove the subsidies and continue to increase energy prices. While ordinary people bear the heavy burden of energy price hikes, the government continues to pay massive subsidies to power producers such as the Adani group.
2022 also marked the opening of two mega-projects — the long-awaited Padma Bridge and the country’s first-ever metro rail in Dhaka. While mega-projects like these are impressive feats and enhance connectivity in a developing country like Bangladesh, all projects except the Padma Bridge are financed by foreign loans.
Bangladesh has 40 loan packages, 13 of them — amounting to over US$32 billion — are due for repayment by 2024. While these visible infrastructure developments would surely give the ruling party extra leverage in the upcoming election, the country is likely to face a major economic shock when the time for debt repayments comes.
Along with the economic predicaments, 2022 saw human rights issues take centre stage. The year started with the United States imposing sanctions on Bangladesh’s top law enforcement agency officials for severe human rights violations.
After visiting Bangladesh, then United Nations High Commissioner for Human Rights Michelle Bachelet expressed her concern about allegations of forced disappearances, extrajudicial killings, torture and the lack of accountability for such violations.
Not surprisingly, economic setbacks and human rights violations impacted political developments. The AL regime seemed to loosen its grip on containing opposition protests. Taking this opportunity, the main opposition party, the Bangladesh Nationalist Party (BNP), organised ten divisional rallies between July and December, in which a surprisingly huge number of people participated. These massive gatherings undermined previous assumptions about the declining strength of the opposition and uncertainty regarding the BNP’s leadership structure.
Although the government permitted opposition-led protests in 2022, there were considerable crackdowns. In the last four months of 2022, police killed a total of 10 BNP activists during protests that focussed on opposing price hikes and demanding an election under a neutral and non-partisan government. The increasing attacks, harassment and arrests against the BNP activists and top leaders raised concerns about potential violence and oppression increasing before the upcoming national election, expected to be held at the end of 2023 or early 2024.
One interesting political development in 2022 was the BNP’s decision to develop a consensus among other opposition parties to keep a distance from the major Islamist party Jamaat-e-Islami, while the supposedly secular AL continued to nurture a close relationship with the conservative Islamists. Prime Minister Sheikh Hasina’s meeting with Hefazat-e-Islam leaders in December 2022 and her decision to allow the Islami Andolan Bangladesh party to hold political protests without police harassment indicate a trend of acquiescing to the Islamists. This is probably for the benefits that a controlled and subdued opposition might bring in the upcoming national election.
In the foreign policy arena, Bangladesh’s usual non-alignment stance regarding relations with China, India, Russia and the United States witnessed a major shift in 2022. In December 2022, US ambassador to Bangladesh Peter Haasvisited the families of the victims of enforced disappearances but cut his meeting short following security concernscaused by a large crowd of ruling party supporters.
AL leaders subsequently labelled the visit as interfering in internal affairs. When Moscow backed AL’s position and preached non-interference to the United States, Washington responded by asking if such principles also apply to Ukraine. As Bangladesh gradually tilted toward Russia and China it became a rhetorical battleground between the United States and Russia.
Bangladesh entered 2023 with political upheavals and a looming economic crisis. Bangladesh’s economic and political future will depend on the possibility of a consensus between two battling political parties. Negotiating a political solution to the ongoing crises will only be possible by creating a framework that allows free, fair and credible elections.
Dr Saimum Parvez is a Marie Skłodowska-Curie postdoctoral fellow at the Vrije Universiteit Brussels (VUB), Belgium, and senior lecturer at the North South University, Bangladesh.
This article is part of an EAF special feature series on 2022 in review and the year ahead.
This article originally appeared in East Asia Forum
The views expressed above belong to the author(s)

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