By Ashish Singh
Bangladeshi-Swedish writer Anisur Rahman spoke with a measured calm, his voice carrying the weight of observation and distance. His reflections on Bangladesh’s current economic turbulence were rooted in both experience and concern. Behind his analysis lay a deeper unease — a recognition that the nation’s crisis is not only statistical but structural, tied to questions of governance, confidence, and survival.
Since August 2024, Bangladesh has been grappling with intensifying macroeconomic distress. Inflation continues to climb, foreign reserves have sharply declined, and unemployment has surged across industrial towns. “Food inflation, in particular, has remained persistently high,” Rahman noted. In November 2024, food prices rose to nearly 14 percent, hitting households already strained by job losses and stagnant wages. Thousands of garment workers, he added, have been displaced after factory closures—many of them going unpaid for months. “The economy,” he said, “has become a disaster since the exit of Sheikh Hasina’s government.”
The political transition, led by the interim administration under Muhammad Yunus, has shaken investor confidence. Bangladesh’s once-booming garment sector, a symbol of resilience, now faces contraction. “Both domestic and foreign investors are hesitant,” Rahman observed, describing how social unrest, insecurity, and reports of arson have deterred investment. Foreign direct investment inflows fell by more than half in early 2025, reflecting a widespread perception of instability.
The challenge, Rahman explained, is not merely economic but systemic. Bangladesh’s institutions of governance—tax collection, banking oversight, and anti-corruption mechanisms—remain fragile. “The state is struggling to maintain transparency and fiscal discipline,” he said. Gross foreign currency reserves, which once stood at over 48 billion dollars in 2021, have fallen to less than half that figure. Limited revenue collection, low public trust, and rising imports have together created a fiscal imbalance that threatens the country’s developmental ambitions.
At the same time, Rahman warned that Bangladesh’s overreliance on the ready-made garments industry leaves it vulnerable to external shocks. “Diversifying exports, strengthening rural subsidies, and generating employment are now essential,” he said. Growth projections for 2025 stand at around four percent — modest for a country that once prided itself on being a South Asian success story. He stressed that reforms in financial management and greater accountability in public institutions are crucial for long-term recovery.
Rahman’s concern extended beyond economics to the broader question of political legitimacy. “Without a free, fair, and inclusive election, no recovery will be sustainable,” he argued. The absence of public confidence, he believes, deepens economic fragility. Rising youth unemployment, estimated at nearly 17 percent, poses a further risk of unrest. “The social contract,” he said, “is wearing thin.”
As Bangladesh recalibrates its foreign policy after Hasina’s departure, new alignments are emerging. Rahman described how Dhaka’s growing closeness to China and a cooling relationship with India are reshaping the regional order. “Bangladesh is seeking balance,” he said, “but the Bay of Bengal is becoming a new theatre of competition between the United States and China.” Whether the country can navigate this geopolitics without losing its economic footing, he suggested, will depend largely on whether democracy can reassert itself at home.
Through his words ran a quiet conviction that Bangladesh stands at a turning point — a moment where history, politics, and economics intersect with human endurance. “The country’s strength has always been its people,” Rahman concluded, “but no nation can build a future on uncertainty alone.”
(Ashish Singh is a social and political scientist.)
