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Who is Controlling Bangladesh NOW?

Updated: Apr 2


Background



Bangladesh is currently witnessing significant unrest, marked by widespread protests against the government's job quota system. These protests, predominantly led by students and supported by various societal groups, have been ongoing for weeks.


Key Points


The crux of the unrest lies in the government's job quota system, which reserves a certain percentage of government jobs for specific groups, including descendants of freedom fighters, minorities, and women. Critics argue that this system is discriminatory and undermines merit-based recruitment, leading to widespread discontent. The protests have escalated into violent confrontations between demonstrators and security forces, resulting in fatalities and injuries. This has further intensified the unrest and highlighted the urgent need for a resolution. In an effort to restore order, the government imposed curfews, restricted internet access, and deployed security forces across the country. Despite these measures, the protests continued.


The Supreme Court of Bangladesh intervened, reducing the quota for descendants of freedom fighters from 30% to 5%. However, this adjustment did not satisfy the protesters, who demanded the complete abolition of the quota system. The unrest severely disrupted businesses, trade, and daily life, negatively impacting the economy. The protests and violence created a climate of fear and uncertainty, further hampering economic activities.


Protesters' Demand


Protesters argued that the quota system was discriminatory and unfair to those who do not fall under the reserved categories. They believe that government jobs should be allocated based on merit. The demand was for a system where every citizen has an equal chance to compete for government jobs. Protesters called for a fair and impartial recruitment process devoid of favoritism or bias. The Supreme Court's decision to reduce the quota for descendants of freedom fighters from 30% to 5% was a significant step. However, it was not been sufficient to placate the protesters. To control the protests and maintain law and order, the government deployed security forces across the country. Curfews were imposed in various areas to curb violence and manage the protests. The government restricted internet access to limit the spread of misinformation and coordination of protests.


Implications


The ongoing unrest has disrupted businesses, trade, and transportation, leading to a negative economic impact. The instability affected investor confidence and hindered economic activities. The rulers faces increasing pressure to find a lasting solution to the crisis.


Key International Actors


As Bangladesh's largest neighbor, India has interest in its stability. While maintaining a neutral stance publicly, India likely plays a behind-the-scenes role in diplomatic efforts. As a growing economic and political power in the region, China has interest in Bangladesh. Its involvement is primarily through diplomatic channels to ensure stability. The US has a long-standing relationship with Bangladesh, particularly in terms of development aid. While not directly involved in mediation, the US monitors the situation closely and may offer diplomatic support or aid if needed.


Indian Business in Bangladesh


India and Bangladesh share a good economic relationship, with numerous Indian companies having significant investments in the country. Despite the recent unrest, the business environment in Bangladesh has generally remained positive, driven by factors such as a growing middle class, favorable government policies, geographical proximity, and complementary economies. Major Indian Companies in Bangladesh include :-


  • FMCG- Marico, Emami, Dabur, Asian Paints, Pidilite, Godrej.

  • Pharmaceuticals- Sun Pharma.

  • Automobile- Tata Motors, Hero MotoCorp.

  • IT and Telecom- Several Indian IT companies operate in Bangladesh through partners.

  • Other Sectors- Various Indian companies operate in banking, construction, and infrastructure.

The recent protests posed challenges to business operations.


The Human and Economic Toll of Bangladesh's Protests


In three weeks of protests and shutdowns, Bangladesh has faced a staggering array of losses, affecting both its people and its economy. The following breakdown highlights significant areas of impact:


  • The most heart-wrenching consequence has been the loss of lives, with at least 300 people, loosing lives in the chaos.

  • Preliminary estimates indicate that the economic losses will run into several thousand crore taka. The Power Division alone reported a loss of Tk 1,200 crore, the ICT ministry Tk 600 crore, Dhaka North City Corporation (DNCC) Tk 230 crore, and Bangladesh Council of Scientific and Industrial Research (BCSIR) Tk 7 crore. These figures represent a significant blow to the national economy, impacting future growth and stability.

  • Private companies suffered extensive damage due to arson attacks on motorcycles, buses, trucks, and cars in Dhaka, Narayanganj, Madaripur, Gazipur, Chittagong, and other districts. The destruction of these assets not only represents a financial loss but also disrupted the livelihoods of those who depend on these vehicles for their daily work.

  • More voilence was reported from 04 August 2024 onwards across various districts—Pabna, Feni, Lakshmipur, Narsingdi, Rangpur, Magura—resulting in numerous casualties. In Dhaka, a hospital was vandalized, and four garment factories were set ablaze.

  • Bangladesh's Chief of Army Staff, General Waker-Uz-Zaman, has commanded officers to safeguard lives, properties, and state facilities.

  • The informal sector, which includes day laborers, transport workers, rickshaw pullers, small vendors, self-employed individuals, SMEs, and shop owners, was hit hard.

  • Large and medium-scale enterprises, especially those in the export sector such as RMG (ready-made garments), textiles, food processing, light engineering, pharmaceuticals, leather, and footwear, faced significant income losses.

  • The service sector, including transport, banking, entertainment, and healthcare, also experienced substantial income losses.

  • According to the Bangladesh Association of Software and Information Services, their member companies suffered losses of approximately Tk 400 crore in just five days.

  • The tourism industry, especially in popular destinations like Cox's Bazar, Sylhet, and Kuakata, has seen a significant downturn. The loss of income in this sector affects not only large businesses but also small vendors and service providers who rely on tourism for their livelihoods.

  • Many workers overseas risk losing their jobs if they are unable to return to their workplaces on time due to the shutdown.

  • Farmers and rural households involved in agro-based farming are severely affected due to the collapse of the domestic supply chain of perishable products, including vegetables and fruits. The inability to transport and sell their produce has led to significant financial losses and food wastage.

Sectoral and Intersectoral Impacts


At the meso level, the losses were both sectoral and intersectoral. Banking and financial transactions through ATMs and mobile financial services (MFS) were hindered due to internet shutdowns. Similarly, the supply chains for domestic goods, particularly perishable items, collapsed, leading to shortages and price hikes in retail markets.


Macro-Economic Implications


The macro-level losses may not be immediately visible but will manifest over time. The disruption of supply chains has reduced the availability of goods in retail markets, driving up prices and increasing inflationary pressures. This economic instability could have long-term repercussions on the country's growth and development.


Conclusion


Government statement suspected the attempt to toppling the government by external agencies, third parties and terrorists. The situation remains volatile, with no immediate resolution in sight.


Sheikh Hasina, at 76, faces one of the most significant tests of her leadership. On August 5, 2024, she resigned and left Dhaka. Her departure was dramatic; first, she flew to Kurmitola by helicopter, then boarded a C-130 aircraft, likely bound for a friendly country. Meanwhile, back home, the opulent residence of the Bangladeshi Prime Minister was overrun by protesters, marking a chaotic turn of events. Statue of Sheikh Mujibur Rahman, referred to as "Bangabandhu" (Friend of Bengal) is being vandalised.


The unrest stems from a quota system that reserves up to 30% of government jobs for family members of veterans from Bangladesh's 1971 war of independence. Initially a protest against this quota, the movement has transformed into a broader anti-government uprising. People from various walks of life—film stars, musicians, and garment manufacturers—have rallied together, with rap songs and social media campaigns amplifying calls for Hasina's resignation.


The current upheaval is reminiscent of the political instability that has plagued several of Bangladesh's neighbors. In Pakistan, military coups disrupted civilian rule in 1958, 1977, and 1999. Myanmar endured military control from 1962 to 2011 and again in 2021. Bangladesh itself experienced coups in 1975 and 1982. Today, it faces a return to military rule.


As the world watches, the future of Bangladesh hangs in the balance. The international community, including India, has advised its citizens against traveling to Bangladesh. Trains from India stand suspended.



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