Unemployment, political chasms, economic distress: Bangladesh interim government has its hands full

In a dramatic and unexpected turn of events, Bangladesh’s long-serving Prime Minister Sheikh Hasina resigned on August 5 and fled the country amid rising protests and widespread civil unrest. What began as a movement against job quotas rapidly transformed into a nationwide uprising, culminating in Hasina’s sudden departure.

Now, Nobel Laureate Muhammad Yunus has been appointed to lead an interim government, charged with the monumental task of restoring order and steering the nation through its most critical political transition since independence. Yet, the challenges that lie ahead are daunting.

In January, Hasina secured a fourth consecutive term as prime minister in a controversial election. Her tenure had seen significant economic growth, improvements in infrastructure and efforts to lift millions out of poverty. Under her leadership, Bangladesh even outpaced neighboring India in per capita gross domestic product and life expectancy. However, beneath this economic success, dissatisfaction was growing, particularly among the youth who felt suffocated by her government’s authoritarian and partisan approach.

The catalyst for the recent upheaval was the student-led protests against a job quota system that reserved a significant portion of government positions for descendants of 1971 war veterans. This system, viewed as discriminatory and biased toward Hasina’s supporters, sparked widespread anger. The protests quickly expanded into a larger movement against economic inequality, corruption, and the decline of democratic institutions. Despite Hasina’s efforts to quash the unrest through curfews, internet blackouts, and a heavy-handed police response, the movement only grew stronger.

With Hasina’s departure, Bangladesh stands at a crucial crossroads. The appointment of Yunus, a globally respected figure known for his work in microfinance and poverty alleviation, as the head of the interim government has been welcomed by many. Yunus, often called the “banker to the poor”, has long been a vocal critic of Hasina’s authoritarianism and was targeted by her administration. His selection signals a break from the oppressive practices of the previous regime and a move toward a more inclusive and democratic governance.

However, the challenges facing the interim government are immense. The first and most urgent task is to restore law and order in a nation still reeling from weeks of violence and unrest. The protests have claimed over 300 lives, with thousands more injured and detained. After the fall of the Hasina regime, there have been widespread attacks against her party supporters and the minority population. Protesters have also forced the chief justice of Bangladesh to resign.

Bringing peace and rebuilding trust in the security forces and judiciary, particularly the police and paramilitary units discredited by their brutal crackdown on protesters, will be critical.

Beyond restoring order, the interim government must confront the economic challenges that fueled the unrest. While Bangladesh’s economy has shown impressive growth on paper, it is plagued by structural issues such as high inflation, blatant corruption, youth unemployment and is overly reliant on the garment industry. This industry, which accounts for 83% of the country’s export earnings, is particularly vulnerable to prolonged political instability.

The recent protests have already caused significant economic disruptions, with losses estimated in the billions of dollars. Rebuilding investor confidence and stabilising the economy will require swift and effective action from Yunus and his team.

Youth unemployment remains a critical issue, as the job quota system failed to meet the aspirations of the country’s young population. Addressing these economic inequalities, exacerbated by years of cronyism and corruption, will be essential to prevent future unrest and ensure a stable and prosperous Bangladesh.

Politically, Bangladesh is deeply divided. The protests have exposed the extent of public dissatisfaction with the Awami League’s dominance, and there is little appetite for a return to the status quo. However, the path to political stability is unclear. The interim government must work to build consensus among the country’s major political parties, including the opposition Bangladesh Nationalist Party and Jamaat-e-Islami, both of which were marginalised under Hasina’s rule.

The release of Bangladesh Nationalist Party leader Khaleda Zia, imprisoned on corruption charges, is a significant development that could reshape the political landscape. Yet, the deep-seated animosity between the Bangladesh Nationalist Party and the Awami League, coupled with the recent violence against Awami League supporters, suggests that achieving political reconciliation will be a formidable task.

Yunus’s role as head of the interim government will likely be more symbolic than executive. He is likely to serve more as a unifying figure rather than a hands-on leader. His credibility and international stature will be crucial in garnering both domestic and international support for the transitional process.

However, the real challenge lies in organising free and fair elections that reflect the will of the people while ensuring that the military, historically a powerful force in Bangladeshi politics, remains out of direct governance.

Bangladesh’s instability has significant implications for the region, particularly neighboring India, which shares a long and porous border with Bangladesh. India’s relationship with Bangladesh under Hasina was characterised by cooperation on security and economic issues, but her departure has left New Delhi scrambling to reassess its strategy.

The potential for increased migration, the rise of religious extremism, and the possibility of Bangladesh tilting towards China are all concerns that India will need to address in the coming months.

Bangladesh stands at the beginning of a new chapter in its history. However, it faces many challenges. The interim government must restore law and order, stabilise the economy and lay the groundwork for a peaceful and democratic transfer of power.

Yunus’s leadership will be crucial in guiding the country through this turbulent period, but the success of the transition will ultimately depend on the willingness of Bangladesh’s political leaders to work together for the common good.

Ashok Swain is a professor of peace and conflict research at Uppsala University, Sweden.