The next phase of Bangladesh’s story began last week with the landslide election of the Bangladesh Nationalist Party. Following his victory, Prime Minister Tarique Rahman noted that his government will focus on fixing “a fragile economy that’s beset by weakened institutions and deteriorating law and order.”
Rahman’s acknowledgement of the economic situation and the absence of law and order was, at face value, a nod to the frustrations which drove the July 2024 protests. But to close onlookers, it was also a tacit acknowledgement of the Interim Government’s 18-months of failure.
Despite claims of having achieved economic “stabilization” that led to a “structural rebalancing” of the core economic pillars, the Interim Government largely pursued a targeted retribution campaign – seemingly without regard for the rule of law – against businesses and their owners, undermining industry confidence.
Across the Interim Government’s tenure, business conglomerates including Summit Group, Alam Group, Gemcon Group, S Alam Group, Nassa Group, Orion Group, Nabil Group, and others were targets of alleged wrongdoing. Just three days after the election, Singaporean businessman Muhammed Aziz Khan, the chairman of Summit Group, had assets in Bangladesh frozen following allegations the group enjoyed “exemptions on project income”.
Now, Rahman must now contend with this inherited situation in which the crackdown on businesses was on those “perceived to be connected to the Hasina administration” and distinguish fact from fiction. It’s of little help that the lack of ownership and transparency over the Interim Government’s shortcomings will only make it harder for the BNP and Rahman to get to grips with the country’s economic reality.
And what of that reality? Inflation has remained at a stubborn and persistent high – jumping to 8.58% in January – with the cost of everyday commodities increasing by 0.6%. A seven month-long drop in private credit growth saw loans dry up and economic investments stall amid ongoing uncertainty. The ready-made garment sector, kneecapped by US tariffs and the Interim Government, has been exceptionally slow to respond, leaving the majority female workforce extremely vulnerable. While at the international level, relationships with key economic entities like the IMF and the World Bank have been extremely fraught, leading to delays in the release of crucial IMF funds.
Meanwhile, the grander visions of economic reform that Bangladesh Bank Governor Ahsan Mansur attempted to ram through have, thankfully, amounted to nothing. Decisions over the independence of the central bank have been rightly stalled.
The Bangladesh Bank Order proposed a fundamental reorientation of the central bank and any such shift needs the full consideration of a duly elected parliament. But the unwillingness of the Interim Government to rubber stamp the order was not taken lightly by members of the bank, who organised a protest calling for the resignation of the Finance Minister. It’s telling that rather than strike a note of hopeful unity in their final days of power, those responsible for the country’s economic future battled it out in the press, attempting to eek out any remaining influence.
For those not in positions of influence or power, the final days of the Interim Government leaves little resolution to the underlying issues which led to the July protests. Inequalities remain deeply entrenched, while cronyism has gone unpunished, and the voices of those women and students who stood at the forefront of the protests have been all but silenced. In the end, the Interim Government’s tenure at the helm of Bangladesh may just leave more questions than answers.
