Bangladesh new interim leader Yunus heads home, government to be sworn in on Thursday

By Ruma Paul and Sudipto Ganguly

DHAKA (Reuters) -The Nobel Peace laureate tapped to lead an interim government in Bangladesh called for calm and boarded a flight on Wednesday to return home, a day before his new government is expected to be sworn in to replace ousted Prime Minister Sheikh Hasina.

Muhammad Yunus, 84, was picked by President Mohammed Shahabuddin to lead the new interim government, a key demand of student demonstrators whose uprising drove Hasina to flee to India on Monday.

"Let us make the best use of our new victory," he said in a statement to Reuters before departing Paris, where he had been receiving medical treatment while out on bail from criminal cases brought under Hasina. "I fervently appeal to everybody to stay calm. Please refrain from all kinds of violence."

Outside the airport, he told reporters: "I'm looking forward to going back home and see what's happening there and how we can organise ourselves to get out of the trouble that we're in."

"I'll go and talk to them. I'm just fresh in this whole area," said Yunus, an economist who was awarded the 2006 Nobel Peace Prize for founding a bank that pioneered fighting poverty with small loans to ordinary people.

President Shahabuddin said the rest of the interim government needed to be finalised soon to overcome the crisis and pave the way for elections. Nahid Islam, a key student leader, said he expected the members to be chosen by late Wednesday.

Army chief General Waker-Uz-Zaman said that he was hopeful the interim government would be sworn in by late Thursday and that the situation in the country was improving and was expected to become normal in the next 3-4 days.

He also said that military leaders had held discussions with student leaders, political parties, and the president and that he was confident that Yunus would be able to take the country towards a democratic process.

President Shahabuddin also announced the appointment of a new police chief, Mohammad Mainul Islam, to replace Chowdhury Abdullah Al Mamun as part of a shake-up of the security top brass that also included a new head of the technical intelligence monitoring agency and changes among senior army officials.

'NO DESTRUCTION OR REVENGE'

Ahead of the arrival of Yunus, a court overturned his conviction in a labour case in which he was handed a six-month jail sentence in January. Yunus had called his prosecution political, part of a campaign by Hasina to quash dissent.

The main opposition Bangladesh Nationalist Party (BNP), buoyed by its chief Khaleda Zia's release from house arrest on Tuesday, drew hundreds of people to a rally in Dhaka and demanded elections within three months.

Zia, 78, a former prime minister and Hasina's arch rival, addressed the rally by video link, as did her exiled eldest son Tarique Rahman, who was introduced as the country's next prime minister. Both called on their followers not to seek revenge.

"No destruction, revenge or vengeance," Zia said from her hospital bed. Her son said: "National elections should be held soon and power should be handed over to a government elected by the people at the earliest."

Zia had feuded and alternated power with Hasina since the early 1990s. She and Rahman were convicted of graft in 2018, in what they called a trumped up case.

Hasina's resignation triggered jubilation across the country and crowds stormed and ransacked her official residence unopposed after she fled, ending a 15-year second stint in office.

The daughter of state founder Mujibur Rahman, Hasina survived the assassination of her father and most of his family in 1975. She ran Bangladesh for 20 of the last 30 years.

Public anger against Hasina was also in part due to economic distress. Bangladesh's $450 billion economy expanded under Hasina as the mainstay garments sector grew. But costly imports, high inflation, youth unemployment and shrinking reserves in recent years pushed it to seek a $4.7 billion loan from the International Monetary Fund.

"The protests...have exacerbated downside risks to economic growth, fiscal performance, and external metrics," ratings agency S&P said in a note on Wednesday. "The damage to credit metrics may be contained if the sociopolitical situation normalises soon and Bangladesh forms a new government."

Though calm has mainly returned there were still signs of lingering unrest.

Protests broke out at on Wednesday the headquarters of the Bangladesh Bank in Dhaka on Wednesday when hundreds of officials from the central bank forced four of its deputy governors to resign over alleged corruption, two sources at the bank said.

The bank did not immediately comment.

India, target of anger from some Bangladeshis for taking in Hasina, evacuated all non-essential staff and their families from its embassy and four consulates in the country, two Indian government sources said.

Most schools and university campuses in Dhaka and other cities reopened after having been shut for weeks. Garments factories that had been shut for days also began opening on Wednesday.

The movement that toppled Hasina rose out of demonstrations against public sector job quotas for families of veterans of the 1971 war of independence from Pakistan, seen by critics as a means to reserve jobs for allies of her Awami League party.

(Reporting by Ruma Paul in Dhaka, Sudipto Ganguly in Mumbai, Krishn Kaushik in New Delhi, Charlotte Greenfield in Islamabad, Liz Lee in Beijing, Shounak Dasgupta in Bengaluru and Xiao Xu in Singapore; Writing by Shivam Patel; Editing by Raju Gopalakrishnan and YP Rajesh)