Bangladesh Implosion and Global Ramifications

Bangladesh Implosion and its Global Impact

Development. On Monday, 5th Aug 2024, Bangladesh’s Prime Minister Sheikh Hasina was forced to resign by the current Army Chief, General Waker-Uz-Zaman. Within hours, she fled the country. This development follows weeks of intense protests and violent clashes across the nation. Street protests are not new in Bangladesh but the recent violence has been described as some of the worst in living memory. Since the protests began in July, nearly 400 people have been killed and violence is now ebbing out. The General has appealed to the public and assured that an interim government would be formed to address the protesters' demands. He has also indicated that if the situation improved, there would be no need for an emergency state.

Why did this happen? Students began protesting against a new government policy reserving 30% of government jobs for families of veterans from the 1971 Bangladeshi war of independence, arguing it was discriminatory and favored supporters of Prime Minister Sheikh Hasina’s (SH) Awami League (AL) party. They demanded a merit-based system instead. Ironically, it was Hasina’s party which abolished the system of reservation in 2016. The government had no qualms in agreeing with the students demand and referred the judgement to country’s Supreme Court which later annulled the reservation policy, ruling that 93% of government jobs will be merit-based. However, things morphed between those two weeks of July when lower court stayed reservations and supreme court over ruled t. In this intervening period, security forces used excess cruelty to disperse the protesters. The internet was shut down, making reliable information scarce.

How did the protest morph into a revolution? Though the protesters' initial demands were met, the movement rapidly evolved into a wider anti-government protest, calling for the Prime Minister’s resignation. Visibly, there were just two reasons. One, excessive and brutal violence used to suppress the largely peaceful protests and second, a statement that catalyzed the protest. Hasina, in an interview made a critical error of stating that “who should get the benefit of the reservation if not freedom fighters, the Razakars? (Razakars were the people who sided with Pakistan army during Bangladesh’s liberation). Though it was tongue in cheek comment that came out of simple frustration, it was twisted for interpretation by social media and given a color where protesters took to assume that they were being termed as Razakars. Chants of “I’m Razakar and you are a dictator” came in response and the situation snowballed and exploded.

Underlying causes. Beyond what was obvious, if you scrape the surface, you will find the real reasons that precipitated the crisis. These are intertwined and overlapping.

1. Rigged Elections. In 2011, Hasina removed the process of interim caretaker government which would oversee a fair electoral process. SH and her party literally stole Jan 2024 elections. Her best supporters will deny her the credibility for winning fairly. Massive anger stemmed from the fact that people never got chance to vote in a fair election. She converted the country into a party state.

2. Corruption. Corruption in Bangladesh remains endemic. High-profile political actors are reportedly embroiled in various corruption and embezzlement scandals. Allegations against some of SH former top officials including her household assistant stealing state funds close to $ 34 Million created a negative impression in the minds of local youth.

3. Police excesses. Police violence in clamping down the protesters was an obvious corollary of years of using the agency in most brutal manner. Peaceful protestors were shot at and put in jails. This unqualified use of force against its citizens even compelled the UN to release an appeal against its use.

4. Unrealistic Image illusion. SH created a personality cult around her father, Sheikh Mujibur Rahman, the liberator of the nation. Much as he is revered, liberation happened 50 years ago. The current youth does not relate much to such glory and vintage achievements.

5. Social media blitz. Rabid antigovernment campaign on social media, mostly by the opposition actors based outside the country leading to inflaming passions on a completely factually incorrect basis

6. Opposition driven proxies. The main political opposition, BNP and the Jamaat e Islami are very well organized outside the country they have lobbying groups, they have very systematic methods of accessing leadership in various countries to put their point of view across and one of the ways that they tend to influence opinion also both in the countries they’re

7. Islamic radicalization. Pro India and Pro Hindu Stance. Too pro India and too pro Hindu. She earlier tried to control Islamist group and later tacitly played with them giving them some hand of freedom.

External Orchestration. While there are speculations that the protests are being orchestrated from outside. Pakistan carries a history of strained relations with BD since its liberation. It always saw Hasina as India’s ally. ISI in known to have provided close ideological support to Jamaat. China has already established a substantial foothold in Bangladesh, supplying around 70% of its weapons and equipment, including leasing two submarines. Recently, a port deal that was initially set to go to China was awarded to Japan by Hasina’s government in order to balance India’s regional concerns. The U.S. has openly criticized Hasina in recent years, indicating dissatisfaction with her governance. While some analysts do propound the theory of external manipulation via funding, in reality, it is extremely difficult to control such movements beyond a point. These protests of this size and stature always have roots in genuine grievances among the populace, making them the prime driver of a grassroots movement. Ultimately, the beneficiaries of this unrest are likely to be Pakistan and China, who may find opportunities to expand their influence in a post-Hasina political landscape.

1. Dubious History. From 91 till 2006, a caretaker constitutional interim body did see fair conduct of elections and clear transition of regimes as result of electorate majority. An exception to this political narrative occurred in 2006 when Khaleda Zia, term ended. General Moinuddin Ahmed assumed the role of caretaker for three months to conduct elections. However, he extended his tenure, promoting himself to a General and later attempted to disqualify both Zia and Hasina from contesting. This brought the two women together for a brief period where they together found a common rival in Moinuddin. He eventually oversaw a fair election bringing SH to power in 2009.

2. Abolishment. Hasina saw the vulnerability of the institution of caretaker government system and therefore abolished it in 2011. Every consecutive election was thereafter held under aegis of SH ruling party and each time she was elected with negligible opposition as result of sham elections. It is this change that actually took away the democratic right of the public to elect a government is considered the key trigger to the unrest.

3. The new Interim Government. Army has set in a new Interim Govt. Most imp work will now be to restore stability and Law and Order. Police needs to be brought back. While we may not see Martial Law, there will be substantial backhand army control. The elections are unlikely happen quickly as the interim task force not only has to restore order but also weed out SH bureaucratic appointees in myriad institutions. Elections are unlikely in near future and make take up to a year to unfurl. What will be debilitating is a repeat of 2006 when the interim govt controlled by Army stuck around for three years and was forced to conduct elections by yet another civil unrest in 2008.

The institution of Army. Military influence in politics has been a recurring theme in Bangladesh. However, after a period of 16 years of Army rule from 1975 to 1991, the country saw democratic process setting roots. Arter 1991, 27 army chiefs (exception 2006 to 2009) retired and returning to civilian life to play golf. The current army chief is the tenth to hold the position since 1991 and only a month old at the helm. However, this the fifth time in nation’s history that Army is assigned to oversee democratic process. While the official period is three months to hold the elections, in exceptional circumstances this is extended by the Army. The current chief has announced immediate establish of an interim government to restore order and will prepare for upcoming elections. The key is the time lines of a smooth transition. Legacy reminds us of Gen Moinuddin who came to oversee a caretaker government in similar circumstances in 2006 and stayed on for three years.

Paradoxes of Economic Growth. Bangladesh has experienced a remarkable economic transformation over the past few decades. GDP growth rate reached 7.2% in fiscal year 2021-2022, positioning it among the fastest-growing economies globally. SH government is known to have pulled out BD’s economy from sludge. From 2009 till date, the GDP per capita grew three time over in 15 years from $800 to $3000. However, there are fundamental structural anomalies in its economic framework. There is evident lack of policy framework and a formal approach to initiate reforms. There is a complete absence of ‘Start Up’ eco system. The country, in fact, is a classic case in unequal's. The wealth is clustered in small section of the population who enjoy the combined fruits of entrepreneurship and corruption. The impact of any downturn is felt by the plebian. In last two years, the country has been grappling with a severe economic crisis characterized by several interrelated challenges. S&P Global Ratings downgrading the country's long-term sovereign debt rating in July 2024. There are three major issues

1. Global slowdown and its ground level impact. Demand for its ready-made garments (RMG) exports, after a brief Covid 19 shock and recovery, has dropped by 30% with direct impact on its foreign exchange. RMG industry is completely privatized and almost entirely informal. Approx 75% of garment workers in Bangladesh are women whose average minimum wage is approximately $80 per month. In absence of statutory guardrails on wages, the only way to help them cope with inflation is extra work and overtime pay. Without this additional income, especially in light of rising inflation, their lives are impacted.

2. Ukraine conflict and subsidized fuel. In Bangladesh, power is always in deficit. The country's power grid, which relies completely on imported fuel, has faced a serious challenge due to sanctions on Russian oil imports. Subsidies were removed and prices shot up by 50% leading to rationing and rolling blackouts. Buses and taxis raised fares shot overnight and food got more expensive. Thousands took to the streets to protest.

3. Remittance from foreign migrants. Bangladesh experienced an 8.41% decline in remittances. This is attributed to several factors: a stagnant stock of Bangladeshi migrants abroad, reduced earnings per worker, and changes in their saving and remitting behaviors. The number of migrants securing jobs overseas has decreased, with only 450,000 workers finding employment in 2013, down from 680,000 in 2012. Additionally, many migrants are returning home due to unresolved legal status issues in countries like Saudi Arabia and the UAE. Factors such as increased unemployment and wage reductions for illegal migrants in Gulf Cooperation Council (GCC) countries have contributed to this situation.

Islamic Fundamentalism and Instability Islamic fundamentalism has increasingly influenced Bangladesh's socio-political landscape over recent decades, challenging the country's secular and democratic principles. This trend began in the 1970s, when military regimes promoted Islamic identity to gain legitimacy. The 1988 constitutional amendment declaring Islam as the state religion further accelerated this process. Militant groups like Harkatul Jihad al-Islam (HUJI) and Jamaatul Mujahideen (JM) Bangladesh emerged during the 1980s, carrying out attacks against secular institutions and minority communities. The rise of Jamaat-e-Islam as a political outfit in 2010 underscored the growing power of Islamist forces, as the group pushed for political reforms to establish an Islamic state under Sharia law. Additionally, the Bangladesh Nationalist Party (BNP) has formed alliances with Islamist parties, contributing to the rise of religious intolerance. Hasina’s Awami league pitched a strong counter balance managing jihadi elements in last 15 years. Now, there are serious concerns about the potential empowerment of fundamentalist groups and threats to religious minorities, particularly Hindus and Christians in near future.

Future of Minorities The ongoing political turmoil in Bangladesh has exacerbated the plight of religious minorities, particularly Hindus, who have faced a surge in targeted attacks. Hindu temples, businesses, and homes have been targeted in multiple districts, forcing monks to flee for safety. Despite some efforts by local Muslim groups to protect Hindu sites, the attacks have not ceased entirely. Minority rights groups have warned that the difficulties faced by religious minorities in Bangladesh have intensified in recent years, with persecution, land theft, and threats of violence continuing under successive governments. The violence targeting Hindus jeopardizes their safety and threatens Bangladesh's diplomatic relations with India. The crisis has created an environment of fear and uncertainty for vulnerable communities already facing marginalization and discrimination in the country.

Impact on India as Neighbor. India is BDs closest neighbors and second biggest trade partner in Asia accounting for 12% of its exports. The ousted Awami League was considered a pro India and pro Hindu party despite a strong anti-India sentiment in public. "Boycott India" movement in Bangladesh gained significant traction following the general elections held on January 7, 2024. The campaign emerged in response to allegations of Indian interference in the electoral process and the subsequent re-election of Prime Minister Sheikh Hasina. The movement was notably fueled by social media, with prominent figures like exiled physician Pinaki Bhattacharya (Paris based you-tuber) through viral hashtags. There are few areas of concern for India.

1. Return of Indian Nationals. There are approx. 10000 Indian nationals including students, workers and diplomats which are currently in the country. Their safety and return will be on top of Indian establishment list.

2. Safety of Minorities. Bangladesh has roughly 10% of its population as minorities, 8% of which are Hindus. This is not the first time minorities have been targeted. It happened in 1975 when Mr Mujibur Rehman was assassinated as well as in 2009. India now has a legal provision under its new Citizenship Bill to accept its minorities relocating in India and this will help Hindus who may wish to move borders.

3. Infiltration and Refugee crisis. India shares 4096 Km of its borders with unfenced gaps and 54 rivers that constantly change their course. It’s largely porous improbable to humanly man each section. Currently the security is beefed up with additional resources however its unsustainable in long run. India will see spurt in infiltration. In attack on minorities spiral, it will lead to a mass of exodus of refugees piling up along. There is an indication of this already beginning. The numbers will directly depend on level of persecution and could well go up to millions. Every refugee exodus does bring along a sad humanitarian withering that’s takes years to heal.

4. Economic Imbroglio. There is a significant Indian investment in developing border roads, rail and port infrastructure in BD. Last two years witnessed over dozen MoUs signed in field of space, telecom, railways, water sharing and energy exchange between the two nations. India now exports 40% of Power to BD. In July, India secured the operating rights to a terminal in the country’s Mongla port, to transit and trans-shipment cargo vessels for a cost. This was seen as a significant strategic step forward in strengthening the partnership between the two countries. Hasina’s abrupt exit has presented India with an imbroglios how much of these investments and exchanges be sustained and how much leveraged to the new govt

5. Threat manifestation. Indian officials believe a dominant hand of Islami Chhatra Shibir (ICS) the student wing of hardline Bangladesh Jamaat-e-Islami, whose ultimate objective is to establish a Taliban type of government, in inflaming the streets and turning the protest over quotas into a determined effort to replace Hasina. Together with Jamaat ICS, they are believed to have fanned what started out as a genuine student movement in earlier July into a violent nationwide agitation for regime change. India, overnight, is now surrounded by three hostile neighbors sharing its land borders, tossing its détente and foreign policy into a twister. Hasina kept terror at bay for India. With her gone, not just the Jamaat but also the opposing BNP, a very likely future political power in BD, is likely to be inimical to India’s interest. India will have to deal with not just cross border threats but also watch the nesting ground for major anti India activity. Poverty, Islamic fundamentalism with strong anti-India sentiment plus implicit support from state and non-state actors in Pakistan and China will make a dangerous cocktail and an entirely new strategic challenge that is likely to keep Indian establishment at the edge. India will only hope that the army will have a moderating influence on the new government and new forces will keep India security concerns.

6. Shelter to Sheikh Hasina. Its evident that forces in power in Bangladesh will not happy with India providing shelter to SH. She has been a longtime trusted friend for India. She took refuge earlier as well in 1975 when almost her entire family was assassinated. India is unlikely to overlook the past relations with her. Being a credible power in the region, it is very likely to continue to umbrage her as a refugee and keep her safe. Her party is It also the political force that India is more comfortable with.

Impact on Business. The country is bound to see short term disruption. The apparel sector, which constitutes 90% of the country's exports, is currently blanked out due to factory closures, impacting major brands like Uniqlo, Zara, and H&M. The business is unlikely to suffer major short-term impact as workers will soon return to factories after a brief period of quiet. In long term, the impact will depend completely on how the caretaker government under the aegis of immensely respected noble laurate Mohamad Yunis, re-establishes a smooth transition to the democratic form of governance. In view of combined effect of economic downturn and governance vacuum, the region may soon see a sudden outflow of foreign investments, as political instability, previously not seen as a risk in Bangladesh, may deter global corporate interest.

Arab spring Movement? The current political crisis in Bangladesh has drawn parallels to the Arab Spring, with significant unrest manifesting through protests and violence. Statues of Sheikh Mujibur Rahman, the nation's founding leader, are being destroyed, and members of the Awami League (AL) are facing raids and targeted violence. The situation has created a power vacuum, leaving the military as a potential alternative to the current government. There are two possible outcomes: Bangladesh could descend into a failed state like Syria, where groups such as the Muslim Brotherhood or Jamaat-e-Islami could gain influence, either directly or through proxies. Alternatively, the country may fall under a military dictatorship similar to Egypt's experience during its transition. The protests appear to be driven by three main factors i.e. students advocating for reform, Islamist groups like Jamaat, and external influences, possibly including that of Pakistan, China and U.S. This complex interplay of forces raises concerns about the long-term stability of Bangladesh, as the unrest is likely to persist. The outcome of this crisis will significantly shape the future political landscape and social cohesion in the country, with the potential for increased sectarian violence and a shift towards authoritarianism if not managed carefully.

The writer has drawn data and inferences from multiple publications , articles and podcassts available in open source.

Background of a young nation.

For someone who finds current development tectonic must know the history of Bangladesh, a nation that gained independence just 50 years ago. This country has faced significant political upheaval, including two military coups.

1. Military rule. In its fourth year after liberation, country faced its first coup in 1975, following the assassination of Sheikh Mujibur Rahman, the country's founding leader, who aimed to establish a democratic government. His assassination paved the way for General Ziaur Rahman to seize power and rule as a dictator. Gen Zia was assassinated in 1981 and period thereafter very quickly witnessed another army chief General Hussain Muhammad Ershad, continuing under martial law till 1991 where he was forced to resign due to widespread protests. Both regimes were infamous for its political repression and widespread corruption.

2. Rise of dynastic Women. Since 1991 Bangladesh saw a notable trend leadership transitions, this period saw Khalida Zia, widow of Gen Ziaur Rehman and Sheikh Hasina, daughter of slain father of the nation. These two rivalled and alternated political powers for 15 years from 91-2006. Khaleda Zia's party aligned itself with Islamist groups, while Hasina's Awami League has viewed these groups as adversaries. urged the public to return home, indicating a potential shift in governance.a and inferences from multiple publications and articles available in open source.

3. Institution of caretaker government. According to the Bangladeshi constitution, a caretaker government is meant to oversee elections for a three-month period to ensure fairness.

Bangladesh Implodes