Sheikh Hasina’s Exit Reveals Deep Divisions in Bangladesh’s Political Landscape

The resignation of Prime Minister Sheikh Hasina, hailed by some as a ‘second liberation,’ marks a more complex and potentially destabilizing moment in Bangladesh’s political trajectory. While the immediate celebration among anti-government protesters highlighted widespread discontent with Hasina’s prolonged rule, it risks overshadowing the deeper, systemic challenges the country now faces. Her departure, rather than symbolizing a straightforward victory for democracy, exposes the fragile underpinnings of Bangladesh’s political landscape, where power struggles, authoritarian tendencies, and institutional weaknesses have long coexisted.

The notion of a military-led interim government stepping in to restore stability is fraught with concerns. Military intervention in politics, historically, has led to a concentration of power in undemocratic hands, undermining civil liberties and weakening democratic institutions. The interim government’s challenge will be to stabilize a polarized political environment and avoid the pitfalls of military overreach, which could further erode public trust in democratic governance.

Under Sheikh Hasina’s 15-year leadership, Bangladesh saw significant political stability and consistent development, but the dominance of the Awami League in recent years has led to perceptions of imbalance. Despite these challenges, her government delivered several consecutive election victories, with the Awami League securing a fourth term in January 2024, reflecting broad support for its developmental policies and for the progress that resulted from them.

Sheikh Hasina’s commitment to ensuring a peaceful and cooperative transition was demonstrated during the formation of the interim government. Major opposition parties, including the Bangladesh Nationalist Party (BNP), which had boycotted the 2024 elections, were invited to contribute to the new governmental structure and nominate politicians for the reform agenda. This underscored her government’s effort to foster political inclusivity despite long-standing rivalries.

However, violent attacks on Awami League offices and the tragic deaths of several party leaders threaten to derail these efforts to forge political unity. Sheikh Hasina’s leadership, marked by her resolve to maintain stability in an inclusive and peaceful political climate, has been replaced by turmoil and civil strife.

Bangladesh’s Economic Struggles

The protests that ultimately led to the fall of Sheikh Hasina’s government were sparked by opposition to the reintroduction of public sector job quotas, reflecting deeper economic challenges in Bangladesh. Despite being widely praised for its impressive economic progress in recent years, with its per capita GDP, life expectancy, and female workforce participation surpassing that of neighbouring India, the country’s underlying economic problems remain significant. The economy, which grew at an average of 6.6% in the decade leading up to the COVID-19 pandemic, faces substantial obstacles.

One of the key challenges is high inflation, which reached 9.73% in 2023-24, the highest level since 2011-12. Additionally, growth has slowed, highlighting the vulnerabilities of an export-dependent economy. The readymade garment sector, which accounts for 83% of Bangladesh’s export earnings, is especially susceptible to global disruptions, such as the COVID-19 pandemic and the war in Ukraine.

Another pressing concern is the high rate of youth unemployment. The issue of public sector job quotas became a focal point for anti-government protests, with around 18 million young people (nearly a fifth of those aged 18-24) unemployed or outside the educational system. The competition is intense, with 400,000 new graduates vying for just 3,000 civil service jobs, underscoring the growing frustrations within the youth population. This economic insecurity threatens to undermine the country’s key industries, particularly textiles and garments, where political unrest has already caused disruptions in factories and raised fears of mounting financial losses.

Despite these challenges, the International Monetary Fund (IMF) has reaffirmed its support for Bangladesh, pledging to proceed with its $4.7 billion loan to help promote economic stability. However, political uncertainties and instability raise concerns about Bangladesh’s attractiveness as an investment destination, especially for the garment sector, which relies heavily on foreign markets.

Bangladesh is also poised to transition upwards from the Least Developed Country (LDC) status by 2026, a shift that will require renegotiation of its trade agreements with key partners. Yet, the European Union has delayed talks on a new cooperation agreement due to the government’s response to the July protests. This includes discussions around the EU’s Generalised Scheme of Preferences Plus (GSP+), a trade program that incentivises developing countries to pursue sustainable development and good governance. The interim government will need to prioritise the resumption of these negotiations to secure continued preferential access to the EU, Bangladesh’s primary export market for its garment industry.

Political and Security Risks

The recent protests in Bangladesh, which led to over 300 fatalities and the arrest of 11,000 individuals, highlight the forceful methods employed by the nation’s security forces. The military’s involvement is under intense scrutiny, given the country’s history of attempted and successful coups. Although the military has helped set up the interim government, there are ongoing concerns about a potential military takeover. Divisions within the security apparatus have become evident, with some factions supporting Sheikh Hasina while others aligned with the anti-government movement. The military’s choice not to intervene in the protests, despite the breakdown in law and order, may have contributed to the downfall of Hasina’s government.

Regional and Global Implications

The situation in Bangladesh has significant ramifications for India, as the Hasina government supported strengthening ties between Dhaka and Delhi. With five Indian states sharing altogether a 4,000-kilometer border with Bangladesh, New Delhi is concerned that any instability in Bangladesh could spill over into the sensitive Indian North-Eastern region.

A “Boycott India” movement arose in Bangladesh following the January elections, driven by opposition to Hasina’s perceived pro-India policies. Hasina’s stay in India also poses a problem for New Delhi as it tries to maintain equable relations with the new government in Dhaka.

India is additionally worried about the safety of its citizens in Bangladesh, with over 4,500 Indians returning home in July alone, as reports of attacks on Bangladesh’s 13-million-strong Hindu minority surface.

The situation in Bangladesh highlights differing foreign policy stances, with India and China supporting Hasina’s regime for the stability it brought, while Western nations raised concerns about democratic backsliding. The interim government’s relations with India and China will be closely monitored. India justifies its support for Hasina as part of an ideological struggle between secularism and religious extremism, linked to opposition parties with ties to Pakistan. The instability in Bangladesh raises fears of extremist resurgence and migration caused by religious persecution. 

The interim government faces the immediate imperative to stabilise the country and prepare for new elections, but longer-term structural reforms are essential to ensure security, political stability, and continued economic progress.