Crisis and Reform in Bangladesh

Bangladesh’s political landscape changed dramatically on 5 August 2024, when nationwide protests against a discriminatory job quota (reservation) system led to the resignation of Prime Minister Sheikh Hasina. After nearly two decades in power, Hasina’s administration, often criticized for its authoritarian tendencies, faced mass opposition, especially from the country’s students and youth, calling for equitable governance. Now, an interim government led by Nobel laureate Professor Muhammad Yunus is navigating high expectations to bring stability, economic recovery, and democratic reform to Bangladesh.

The crisis was rooted in a quota system that reserved 30 percent of government jobs for descendants of the 1971 independence war veterans, perceived as benefiting Hasina’s loyalists. In a country where youth unemployment is high, this policy stoked frustration and led to protests that quickly escalated nationwide. The government’s violent crackdown on protesters, killing over 1,000 in only three weeks, only fuelled the public’s anger. Hasina’s labelling of protesters as “Razakars” (a term associated with traitors) further intensified calls for her resignation.

The national movement culminated with Hasina’s resignation and departure, and the formation of a 17-member interim government led by Prof. Muhammad Yunus, who serves as the chief advisor. This cabinet features a diverse array of members, including notable civil society figures, prominent human rights activists, former bureaucrats (including the governor of Bangladesh Bank and election commissioner), and key leaders from the student movement who played a pivotal role in the ousting of Hasina. The inclusion of student representatives, such as Nahid Islam and Asif Mahmud, underscores the government’s commitment to democratic reforms and engagement with the youth, reflecting a collective hope among Bangladeshis.

Navigating the Political Minefield

Yunus and some of his advisers from the NGO sector who are known as civil society moderates are running the government, primarily with the mandate of the coalition of the students’ movement. The students seem to be the main driving force. However, they are ideologically divided, with one faction connected to Jamaat-e-Islami (JI) and another aligned with left-wing Islamic ideologies.

JI provides significant ideological direction to the current administration. Although JI’s former ally, the Bangladesh Nationalist Party (BNP), now finds itself on the margins, it retains influence due to its widespread support base. However, ideological tensions persist: JI and student leaders oppose Hasina’s party, the Awami League (AL), participating in future elections, while civil society moderates and a faction within the BNP support a reformed AL’s involvement.

Adding to the complexity, the army remains a formidable force, having previously intervened in Bangladeshi politics. Officially, President Shahabuddin, as the supreme commander, oversees the military, but questions over real influence and authority remain. Balancing diverse ideological interests will be crucial in defining Bangladesh’s path forward.

Bangladesh is at a critical juncture, with Yunus’s interim government holding a unique opportunity to implement deep reforms and foster democracy.

Seizing the opportunity presented by the political void and public frustration with the two major parties, the AL and BNP, along with weakened leftist factions, Islamist parties are stepping forward. Bangladesh’s political landscape now comprises 44 active parties, including 13 increasingly influential Islamic parties. Key Islamic players like Jamaat-e-Islami (JI), Hizb-ut-Tahrir (still officially banned), Islami Andolan Bangladesh, and Bangladesh Khelafat Majlis, along with Hefazat-e-Islam (albeit not a formal party) are expanding their reach, particularly in conservative and rural areas. JI, despite its controversial past with Pakistan during 1971 liberation war, seeks renewed influence through coalition-building, community welfare, and a focus on Sharia-based governance.

For the first time, Islamic parties are pursuing coalition-building, traditionally avoided due to theological differences. The BNP, with its nationalist and socially conservative approach, remains a moderate alternative yet struggles with widespread voter disillusionment over the AL-BNP power cycle. The AL, committed to secular modernization, now faces the challenge of redefining its role amid waning public support. Meanwhile, leftist factions, once pivotal in historical movements, are now sidelined and struggling to regain relevance.

Yunus’s Priorities

The interim government’s priorities are stabilizing the economy, addressing youth unemployment, ensuring political reform, and establishing the foundations for a sustainable democracy. Given the severity of the situation, Yunus must urgently address several key areas:

• Economic Stability: Bangladesh’s economy, weakened by political instability and high inflation, demands urgent intervention. Inflation hit a 13-year high of 11.66 percent in July 2024, with food inflation reaching 14.1 percent. Foreign exchange reserves are under pressure, and GDP growth has slowed to 4.8 percent. The interim government must tackle inflation, stabilize the currency, and encourage remittances to strengthen reserves. Immediate actions to manage food and fuel prices are essential to restoring economic stability and public trust.
• Youth Employment and Job Creation: Youth unemployment is critical, with approximately 41 percent of young people neither in employment nor in education or training (NEET). Most jobs (85 percent) fall within the informal sector, lacking income and job security. Job creation programmes focused on skill development, entrepreneurship, and investment in high-potential industries beyond traditional sectors are necessary. Expanding education and vocational training, especially in digital and service sectors, can empower the youth and alleviate economic frustration.
• Political Reforms and Governance: Widespread demands for political reform include ending the authoritarianism that has plagued the country under Hasina. The interim government must implement comprehensive reforms to ensure election integrity, judicial independence, media freedom, and accountability. Institutions that allowed unchecked power must be dismantled, with safeguards for civil liberties to build a strong foundation for future democratic governance.
• Electoral Reforms: Yunus’s interim government has the mandate to build an inclusive, pluralistic democracy by creating an environment for free, fair, and participatory elections. Despite pressure from political parties to hold elections sooner, Yunus has insisted on substantial reforms before any vote, likely pushing elections to 2026.
• Judicial Independence: Calls for an independent judiciary led to the resignation of Bangladesh’s Chief Justice and five top judges. Subsequent student protests demanded further reform, leading the Supreme Court to suspend 12 high-ranking judges perceived as pro-Awami League. The new Chief Justice has prepared a roadmap for judicial modernization, including an independent secretariat and a commission for judge appointments. An impartial judiciary is crucial for establishing public trust and ensuring fair representation in governance.
• Freedom of the Media and Press: Since Hasina’s ouster, more than 150 journalists have faced charges, mostly severe allegations like murder. Media groups such as Reporters without Borders and Human Rights Watch have condemned the government’s persecution of journalists. The Dhaka Union of Journalists asserts that, while journalists should indeed face charges if specific allegations are substantiated, it is unjustifiable to implicate them in murder cases solely based on accusations of supporting the previous government. The interim government must promote press freedom by establishing a safe environment for journalists and ending politically motivated charges.
• Educational Reforms: In response to the mass protests, over 40 of the country’s 56 public universities saw forced resignations among vice-chancellors and senior officials. Normalcy must be restored in educational institutions, with reforms to make the education system more inclusive and accessible to marginalized communities.
• Banking and Taxation Reforms: Bangladesh’s banking sector suffers from corruption, non-performing loans, and weak regulation. It is alleged that tycoons linked to Hasina have siphoned off 15.6 billion euro from the banking sector during her rule. Strengthening governance and oversight is vital to restoring confidence in financial systems. Additionally, Bangladesh’s low tax-to-GDP ratio necessitates reforms to broaden the tax base, improve compliance, and increase revenue collection.
• Social Safety Nets and Labour Rights: Bangladesh’s low-income households face worsening conditions. Most workers endure poor working environments, low wages, and limited social security, with few prospects for career advancement or skill development. Strengthening social safety nets, particularly in healthcare, education, and food security, will alleviate immediate economic pressures on vulnerable populations while supporting long-term recovery.
• Human Rights and Civil Liberties: Almost 1,474 cases of murder and other crimes related to the violence in July and August have been filed involving 92,486 citizens, including 390 former ministers, mayors, and leaders of the Awami League. Around 7,500 people including 59 high-profile individuals have already been arrested. An independent commission investigating recent human rights abuses would demonstrate the government’s commitment to justice and accountability. Bangladesh’s International Criminal Tribunal issued arrest warrants for Hasina and 55 ministers and officials on charges of “crimes against humanity” during the unrest. The interim government should prioritize fair trials and uphold due process to reinforce public confidence in the justice system.
• Climate Adaptation and Sustainable Development: Given Bangladesh’s vulnerability to climate change, the interim government must prioritize policies promoting sustainable agriculture, renewable energy, and disaster resilience. Bangladesh is the seventh-most climate-vulnerable country, with millions at risk from flooding, monsoons, and salinization in coastal areas. International support for climate adaptation initiatives is essential to protect livelihoods, reduce poverty, and ensure sustainable growth.

From Public Support to Political Stability

Bangladesh’s political transition has drawn significant international interest, especially from the US and India, who prioritize regional stability. Yunus’s administration is expected to seek economic support from these allies and multilateral bodies like the IMF and World Bank, although maintaining autonomy will be key. China also plays a crucial role in the region, making strategic diplomacy essential for balancing global partnerships with national sovereignty.

Germany, one of Bangladesh’s major export markets, focuses its development cooperation on areas like climate, governance, and sustainable supply chains. With textiles comprising over 90 percent of Bangladeshi exports to Germany, this partnership supports mutual economic growth while fostering long-term stability.

Yunus’s success will depend on his ability to mobilize support from political, social, and economic stakeholders to ensure that reforms are both enacted and institutionalized.

Yunus’s interim government faces significant challenges in implementing reforms amidst ongoing political instability fuelled by competing factions. Balancing reform efforts with the need to maintain public order is crucial. Economic limitations, coupled with dependence on international support, further constrain the government’s ability to make substantial changes. Opportunistic factions could exploit the political vacuum left by Hasina’s exit, threatening efforts to build a stable, inclusive democracy. While the student movement that played a crucial role in ousting Hasina represents a powerful force for change, concerns about vigilantism arise if this power is unchecked, potentially undermining the reform agenda.

The anti-fascist sentiment among the public highlights the importance of Yunus engaging with civil society. His legitimacy depends on listening to the people. Real reform must come from the people, with political parties in a supportive role rather than seeking dominance. Political parties are extensions of the citizenry, their existence reliant on public trust and engagement.

Bangladesh is at a critical juncture, with Yunus’s interim government holding a unique opportunity to implement deep reforms and foster democracy. By addressing economic instability, empowering youth, upholding human rights, and promoting sustainable development, the government can lay the foundation for lasting stability.

Yet, Yunus’s success will depend on his ability to mobilize support from political, social, and economic stakeholders to ensure that reforms are both enacted and institutionalized. The coming months will determine whether Bangladesh can overcome its turbulent past and move toward a future of democratic governance and social equity.

An edited version of this article initially appeared in Südlink Magazin.