Bangladesh at 54! Democracy at crossroads

Bangladesh, hailed once as the poster child of globalization for its resounding economic success, saw a massive student-led movement last year in July-August, which ignited a political earthquake in the country. Sheikh Hasina, the longest-serving prime minister, was ousted; streets throbbed with protesters; and there was a massive downturn in the democratic edifice itself, even though an interim administration under Nobel laureate Mohammad Younis is in place to walk the tightrope of transition. The interim administration hasn’t delivered on many fronts, given the country has been witnessing massive unemployment, a fractured political space, division within opposition ranks, a delayed election process, and human rights abuses. This is a curious case of “complex interdependence,” where the story isn’t about elections and political rivalries; rather, it is about how external alignments matter as much as internal politics.

The textile industry has taken the biggest hit due to the political uncertainty. As the country sits at a strategic supply chain network, the transport, railways, and ports were halted due to political uncertainties. The economic sector had already been going through many headwinds, particularly the garment industry with fluctuations of the demand and supply.

The ouster of Sheikh Hasina pulled BNP and Jamaat-e-Islami out of their dwarfed existence to the forefront of political prospects again. One can gauge from the fact that ‘Chatra Shibir,’ the youth wing of Jamaat, won Dhaka University elections with a massive mandate, thanks to its grassroots mobilization done by Jamaat for years despite the Sheikh Hasina government initiating a massive crackdown and conviction of the organization and its cadre. There is more to the story; for the national elections to be conducted, for a country that recently celebrated more than fifty years of independence, the challenge is daunting. It won’t be easy for Bangladesh to balance democracy, development, and its geopolitical bets between China, the US, India, and Pakistan.

The political rupture

The proximate trigger was a student movement against a public-sector quota system that students described as fundamentally unfair. What began as sit-ins and campus protests metastasized into a nationwide uprising against entrenched patronage and perceived authoritarianism. A country born out of deep scars again sits at the interesting crossroads of fragile democracy with many loose ends. The dynastic duel between Sheikh Mujibur Rehman and military strongman Zia ur Rehman defined the politics of the country for three decades, making the politics less about democracy and more about survival. This delayed the process of democratic deepening, and outsourcing of the realms of survival to external actors became a norm. Streets saw bloodshed, the economy witnessed headwinds, the social fabric started weakening, and old scars resurfaced, with elites calling for the shots and complex interdependence. The interim administration seems to have lost it; peace hasn’t been restored, civil liberties are still not protected, the abuses against minorities have not been investigated, and elections are being delayed time and again. This renewed exclusion might reignite street politics and subsequently more chaos and uncertainty.

Economic Growth, Fragile Foundations, and Supply-Chain Risks

Bangladesh has long been celebrated as a development success story, with GDP growth averaging 6 to 7 percent between 2009 and 2019, sharp reductions in poverty, and rising life expectancy. Its garment industry transformed the country into the world’s second-largest apparel exporter, employing millions and accounting for over 80 percent of exports. Yet beneath this impressive narrative lay deep vulnerabilities. The COVID-19 pandemic revealed fragile supply chains and overdependence on a single sector. Inflation soared above 9 percent in 2023, foreign exchange reserves fell from $48 billion in 2021 to under $20 billion by mid-2024, and the taka depreciated significantly. Youth unemployment remains stubbornly high at 12–15 percent, fueling frustration on campuses where Islamist student groups have reemerged as political actors. Political turmoil has further aggravated these structural weaknesses: IMF assessments point to slowing growth in FY25, persistent inflation, and external-sector stress, all of which have tightened policy space for the interim government and discouraged private investment. The garment sector has been especially exposed, facing production stoppages, input delays, worker unrest, and the risk of buyers diverting orders to competitors in South and Southeast Asia. Even short-term supply chain shifts threaten lasting damage, from factory closures to job losses and supplier attrition. Restoring predictability in production, reassuring international buyers on compliance and safety, and providing social protections for workers are now urgent priorities if Bangladesh is to stabilize both its economy and its social fabric.

People, Politics and Institutions

The yardstick of quantifying Bangladesh’s politics is how its streets are doing, who calls for boycotts, and how the campuses conduct themselves, not just looking at the ballots. Successive tampering of institutions by the Awami League and BNP has eroded the trust in institutions. The judiciary is accused of serving the executive; journalism suffers from the digital security laws and constant ostracization of civil liberties, targeting minorities at a whim. The closing of democratic conduits has resulted in the celebration of religious groups trying to arm dissent left by the democratic deficit with an agenda-driven systematic engineering. The population explosion and dislocation due to constant and cyclic violence have produced refugees and chambers of civil hazards.Although the interim government has pledged to investigate past violations, pathways to impartial justice remain narrow, raising fears that impunity could merely shift from one ruling elite to another. Against this backdrop, the credibility and timing of the next national election are central. While the interim authority argues that institutional repairs are needed before a transfer of power, delays risk delegitimizing the process.

The announced timeline of April 2026 has divided opinion: some accept it as necessary for reform, others see it as dangerously protracted. Ultimately, unless reforms are coupled with confidence-building measures—restoring press freedom, ensuring civil-service neutrality, and providing legal protections against political vendettas—public suspicion will deepen, and the cycle of street-driven politics may intensify. The human rights backsliding is a worrying trend, particularly for Hindu minorities during elections and otherwise, and makes a perfect recipe for reigniting social tensions. In a country that prides itself on its liberation struggle, this trend is going to open new floodgates of violence and democratic decay.

Unemployment and Youth Disillusionment

The GDP growth of the country stands at 5.2%, down from 5.8% in FY23, and the benefits of the growth haven’t generated employment, and the wealth stays concentrated in just a tiny population. High GDP growth, booming exports, and significant poverty reduction. However, the labor market tells another story. The youth unemployment rate hovers around 12–15 percent, with the figure far higher in urban centers where educated graduates compete for scarce white-collar jobs. Underemployment remains widespread, especially in rural areas. Roughly 85 percent of the labor force is still in the informal sector, with little job security or benefit.

The problem of jobless growth plays well with agitational politics, campus mobilization, and street protests.For many young Bangladeshis, the choice is stark: emigrate, join the garment sector under harsh conditions, or remain unemployed. Any government that prioritizes mega projects over everyday livelihoods with a mounting population has to be prepared for the public outburst. This perennial problem—if left unchecked, rising unemployment could erode the very foundation of Bangladesh’s social stability. It isn’t just an economic issue but a political fault line that will determine the future trajectory of democracy in Bangladesh.

The Military’s Silent Power

From killing Mujib in 1975 and forcing coups in 1975 and 1982 to ‘taking responsibility’ in 2024, the army has walked the horizons of episodic crisis carefully but has never been off the grid. In fact, it is the most decisive factor shaping the history of the country, preferring a backstage role but wielding influence nonetheless. The release of Khaleda Zia, the appointment of Nobel laureate Mohammad Yunus as interim caretaker, and the repeated deferral of elections all carry the imprint of the military’s approval.

The strategic dangers

The post-crisis vacuum left by the absence of democratic outreach and redressal of the rights and employment issues has crafted a perfect space for exploitation. The impartial monitoring and security analysts point to early signs of mobilization and fringe extremist activity seeking to capitalize on instability and identity grievances. Attacks on shrines, minority targets, and the civic space for pluralist voices provide openings for radical narratives. The emboldening of extremist groups sanctioned and protected by parties like Jamaat raises the red flags of more violence as the elections near.Where domestic polarization, economic collapse, and external patronage converge, it would see increased violent radicalization and regional spillovers.

The geopolitical scenario

Over time, South Asia has become a glaring example of how geopolitics works and how major powers contest the muddied waters. Bangladesh unfolding into a crisis-torn nation has put the region back at the center stage of world geopolitics. The strategic community views the developments in South Asia in general and Bangladesh in particular with utmost caution. Under Sheikh Hasina, Bangladesh leaned toward India while cautiously balancing ties with China and engaging Western partners; the interim government under Muhammad Yunus has sought to diversify further, courting Beijing, Washington, and others. For India, Bangladesh is vital for its trade and secure eastern flank.

The increased involvement of Pakistan in the country post the ouster of Sheikh Hasina is carefully watched by New Delhi. For China, this has opened up substantial space for investments and access to the Indian Ocean and the affairs of Bangladesh. It has poured billions into ports, bridges, and power plants, becoming Dhaka’s largest trading partner and a growing defense partner. India remains indispensable for trade, transit, and security. The United States, meanwhile, has mixed human rights pressure—including sanctions on the Rapid Action Battalion—with calls for free and fair elections, complicating ties with the old ruling elite. For Bangladesh, the challenge is clear: it cannot alienate China’s economic weight, disregard India’s geographic centrality, or ignore the U.S.’s market access and diaspora influence. Its domestic turbulence is thus inseparable from the wider web of global power competition and interdependence.

Conclusion: a fragile window for democratic renewal

Bangladesh stands at an inflection point. The July–August 2024 protests removed an entrenched leadership but also created a governance vacuum that the interim administration must fill responsibly. The twin tasks are arduous: to rebuild public trust by delivering credible, timely elections and impartial justice and to stabilize an economy whose export engine has been rattled by political shock. In geopolitical terms, Bangladesh’s choices—and those of its neighbors and partners—will shape South Asia’s balance of influence for years.

For India and other external actors, the strategic calculation is straightforward yet politically demanding: support Bangladesh’s stability and legitimacy without appearing to choose sides. That requires a blend of economic support, quiet institutional capacity building, and principled diplomacy. The alternative—external partiality, or inward-looking securitization—risks turning a fragile transition into a prolonged crisis that would be costly for Dhaka, New Delhi, and the wider region.

Mehraj Bhat, researcher in south asian geopolitics