A big mistake by Bangladesh

IT IS ALMOST a year since the start of the uprising that toppled Sheikh Hasina, Bangladesh’s despotic former ruler. More than a thousand people died in those few weeks of turmoil; many more were hurt. Shortly after the deposed prime minister fled to India on August 5th 2024, a caretaker government led by Muhammad Yunus, a Nobel peace-prize winner, took office. It promised to restore order and rejuvenate democratic institutions that years of misgovernment had ruined.

Eleven months on, the going is tough indeed. Political demonstrations continue (a march in late May is pictured). Many politicians seem keener to lash out at enemies than build bridges: Sheikh Hasina’s party, the Awami League, has been banned. America’s aid cuts and tariffs threaten development; relations with India, Bangladesh’s biggest neighbour, are in crisis. Is this country of 174m going to squander its fresh start?

Mr Yunus insists his project is on track. In a recent interview with The Economist, the 84-year-old said that achieving the deep reforms Bangladeshis are seeking will take time. On the economy, at least, his government has good news. Bangladesh’s growth will slow from 4.2% to 3.9% in the year ending in June, reckons the Asian Development Bank (ADB): not stellar, but miles better than expected last year. Remittances are arriving, foreign-exchange reserves have surged, and the annual inflation rate has dipped from nearly 12% in July last year to 9% in May. The government has sought to clear bad loans from the banks and started hunting for billions of dollars that the previous government is believed to have siphoned abroad.

Encouraged by this, in recent weeks both the International Monetary Fund and ADB have approved multi-billion-dollar loans. The catch is that so far the government’s reforms have focused only on “low-hanging fruit”, points out Chandan Sapkota of the ADB. Bangladesh still depends heavily on exports of textiles, has woeful infrastructure and is not creating enough jobs for its youngsters. These issues have grown urgent now that America is waging tariff wars.

If action on the economy has won nods abroad, the government’s foreign policy raises eyebrows. Mr Yunus says that Bangladesh is “reaching out to everybody”. But in March he was in China for his first big bilateral trip, where he signed a handful of agreements. Reports suggest Bangladesh may buy Chinese J10C and JF17 fighter jets—the same aircraft used by Pakistan in its conflict with India in May. On June 19th China, Pakistan and Bangladesh held their first-ever trilateral summit.

All this dents ties with India, which used to be Bangladesh’s strongest ally and is providing sanctuary to Sheikh Hasina. Bangladeshis do not care: a survey last year found 75% of them view China positively, while only 11% say they like India. But alienating a big neighbour is risky. In April India cancelled a trans-shipment facility that allowed Bangladeshi goods to be sent abroad from Indian airports; that will increase costs for firms.

Aligning with China could also hurt relations with America. Before that country cut foreign aid, Bangladesh was one of its biggest beneficiaries; much of the money helped Bangladesh host the 1.1m Rohingya refugees who live near the border with Myanmar. America is also the biggest market for Bangladeshi exports. Last month Bangladesh opened negotiations on trade, as it seeks to avoid being subject to reciprocal tariffs of 37% that are due to take effect on July 9th.

Yet the biggest question facing Bangladesh is how quickly it can restore democracy—and how long that achievement will endure. Mr Yunus has suggested that elections may be held in February 2026, or at least no later than April. In advance he wants politicians to sign off a document, called the “July Charter”, that will set ground rules for the poll and list reforms to be completed by its winner. Exactly what politicians will agree to insert in this contract remains fuzzy.

Nearly 150 parties have signed up to compete in the polls, more than twice as many as were registered before. Newcomers include the National Citizen Party (NCP), a student-led group that emerged from the protests. The caretaker administration is keen to nurture a new generation of politicians. So this is hopeful news. The problem is that these minnows seem unlikely to do very well. Among voters who have already made up their mind, only 5% will plump for the NCP, according to a poll by Innovision, a local research firm. The old guard is doing much better: the Bangladesh Nationalist Party (BNP) gets backing from 42% of decided voters. Jamaat-e-Islami, an Islamist group, is polling at 32%. Liberals fear the Islamists would indulge religious extremists. As for the BNP, many Bangladeshis think it as venal and complacent as the party they have just removed from power.

That outfit—the Awami League—will not be taking part. After months of pressure from other parties, the interim government banned it from political activity in May, citing “national security” concerns. In theory the ruling is temporary, pending court cases, but legal proceedings might take years. The risk is that a large chunk of Bangladesh’s voters decide that this decision has denied them a proper choice at the ballot box. The Awami League remains surprisingly popular: it is first choice for 14% of decided voters, and that is almost certainly an undercount (many Bangladeshis prefer not to admit that they still back it). Mohammad Arafat, an Awami leader, insists half the country still sympathises with his party.

Awami claims that 24 members or supporters have been killed in custody since last year’s revolution. Human Rights Watch, an NGO, has accused the interim government of “arbitrarily” targeting Awami supporters in a way that “mirrors the previous government’s abusive clampdown on political opponents”. Lasting change will require bringing all Bangladeshis together, not dishing out punishments, argues Arafat Khan, a legal scholar at the London School of Economics. Bangladesh sorely needs a “Nelson Mandela moment”, he says. ■

Editor’s note: This story has been amended by naming the research firm behind a poll we cite.