Bangladesh: Not The Right Time For American Experiment

  • After 15 years of sustained growth, the Bangladeshi economy is now showing vulnerability.
  • Given its volatile and violent past, a slight misstep may make it politically vulnerable, which will be bad news for the subcontinent and especially for India. 
  • Pratim Ranjan BoseMonday, May 29, 2023 8:39 am IST
    Bangladesh Prime Minister Sheikh Hasina.
    Bangladesh Prime Minister Sheikh Hasina.

    It is a fact that democracy failed to deepen its roots in Islam-majority countries, including Bangladesh.

    It is also a fact that until recently, the US has had undisputed clout in the Islamic world. 

    The lack of democracy in Pakistan never became a hurdle for the US to provide them with unending money and arms. In the end, therefore, it’s all about suitability, narrow interests or geopolitics. 

    That explains the latest US visa norm to restrict access to “individuals and their immediate family members if they are responsible for, or complicit in, undermining the democratic election process in Bangladesh.” 

    The concern here is if the US will end up inviting fresh instability in the subcontinent, which is detrimental to Indian interests, in the guise of fake morality. There is enough precedence for that apprehension around us. 

    Policy Shift

    Denying a visa is within the rights of any country or government. By that standard, the US cannot be held responsible for interference. America announced similar measures about Nigeria, in January this year. 

    However, seen in the light of the US sanction, in December 2021, against Bangladesh’s Rapid Action Battalion (RAB) and its top officials — including the inspector general of police — there is a continuity in the American approach. 

    Clearly, the Joe Biden administration wants to make its presence felt in Dhaka vis-a-vis both China and India. And, that’s a definite shift from the policy approach of the Barack Obama and Donald Trump administrations of the US. 

    People in the know in Dhaka say the last time the US became so active was in January 2007, when a military-backed caretaker government replaced a civilian caretaker government. 

    The civilian caretaker was facing allegations of political bias in favour of the Bangladesh Nationalist Party (BNP), one of the two main contenders to power in Dhaka. The takeover by the military is referred in Bangladesh as “one-eleven.”

    The caretaker government held the 2008 election, in which Prime Minister Sheikh Hasina of Awami League came to power. She has won two successive elections since. 

    The 2014 election was held in the backdrop of the Liberation War crimes trial that took some of the dreaded names of the hardline Jamaat-e-Islami — then electoral ally of BNP — to justice. 

    The Western lobbies opposed the trial in the name of human rights violation. But, Hasina was unmoved. She had also come down heavily on the Islamists who resorted to widespread violence in 2013. BNP boycotted the poll. 

    Dhaka, however, has a lot of explaining to do on the 2018 election that reported 80 per cent polling with nearly 75 per cent of the votes polled in favour of the ruling party. BNP got only seven seats in a 300-member Parliament. 

    Foreign policy observers in India were keen for Hasina’s win in 2018 but, they expected the BNP to get a sizable number of seats. 

    Tough Times

    A lot changed in Bangladesh over the last 15 years.

    On the brighter side, the country has witnessed unprecedented infrastructure-building activity, including the Padma bridge. The size of the economy grew by over 4.5 times. Per-capita income grew at a faster pace. 

    From untold enemies, India and Bangladesh became development partners, with areas of cooperation ranging from economy to security.

    Connectivity increased manifold. Nearly 26 lakh Bangladeshis visited India in 2019. Trade volume increased by nearly 4.5 times to $15.7 billion in 2021. 

    Article Hero Image

    Source: macrotrends 

    On the flip side, the unprecedented availability of foreign assistance and, weak governance opened floodgates of corruption. From Padma bridge to Dhaka metro rail, the unit cost of infrastructure building in Bangladesh is among the highest in the world. 

    With roughly two-thirds of the seats in Parliament in their control, the business lobby strengthened its grip on the government. In Bangladesh, it translates into unbridled ‘gaming’ of the monetary and financial system. 

    According to a recent World Bank publication, the country has the second highest ratio (nearly 10 per cent) of bad debts after bankrupt Sri Lanka (12 per cent), in South Asia. Leading economists of the country privately blame it on siphoning of funds. 

    Reckless fiscal management took a heavy toll on the economy. Over the last year, the foreign exchange reserves declined by nearly one-third to $29.9 billion. Inflation has been on the rise since June 2022 and has reached 9.24 per cent in April 2023. 

    Debt-dependency, though still at manageable levels, is increasing at an alarming rate. Between September and December 2022, external borrowing increased by 3.83 per cent. Government sector borrowing was up by 6.9 per cent. Debt serving as percentage of exports has been on the rise. 

    Sustained uncertainty for the last three years and a slowdown in key markets (for its textiles) in the West, exposed the inherent weaknesses of the economy. Bangladesh has turned up to International Monetary Fund (IMF), which approved a $3.3 billion programme to ensure macroeconomic stability. 

    Not A Time To Experiment

    After 15 years of sustained growth, the Bangladeshi economy is now showing vulnerability. Given its volatile and violent past, a slight misstep may make it politically vulnerable, which will be bad news for the subcontinent and especially for India. 

    From the 10th largest economy in 2014, India’s improved its ranking to fifth. It is growing at the fastest speed (among peers) in the post-Covid pandemic world and is all set to take the third slot in a year or two. 

    Delhi is already managing pressure on both the northern and the western borders, fresh trouble in the east may jeopardise its growth plans. That wouldn’t benefit the global economy, which is passing through the worst phase since the Second World War. 

    Apparently, a small, resource-poor country like Bangladesh doesn’t fit into the wider interests of the US. Yet, it is keen to increase its stake in Dhaka, where two regional biggies — India and China — are already jostling for space. A similar trend is also visible in Nepal. 

    This is not a welcome situation either for the region or for India. The only solace that Delhi may take home is, with the US acting like a guardian angel of democracy, no one in Bangladesh can blame India if Hasina is re-elected. 

    Bangladesh is suffering from an absolute dearth of new leadership in any party. There is no third popular face after Hasina and Khaleda Zia (BNP), both above 75. 

    Islamists are the main support base of the BNP. Islamists have also filled the rank and file of the League over the last few years. The only difference between the two is Hasina’s secular, growth-oriented face. 

    Hasina stopped the use of Bangladeshi territories for cross-border terrorism, bringing a sigh of relief to the subcontinent which is already suffering from the breeding grounds of terrorists in Pakistan. 

    It is natural, therefore, that in these difficult times, India will look forward to maintaining the status quo on the eastern border. The US should remember that.

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