Protests, sectarian violence and a growing spat with India: Bangladesh’s new leaders are beset with challenges to its democracy

Following Hasina’s fall, angry mobs set fire to numerous police stations and killed 44 on-duty policemen. Much of the police force has become demoralized, fearful and hesitant to enforce lawful crowd-control measures.

An economy in crisis

Making matters worse, years of economic mismanagement and corruption have left Bangladesh struggling with high youth unemployment, runaway inflation and a collapsing banking sector. Its external debt has jumped from US$62 billion to over $100 billion in just five years, which critics have blamed, in part, on large infrastructure projects rife with corruption.

Managing this debt will pose a significant challenge. Bangladesh’s dwindling foreign reserves make debt repayments and currency stabilization difficult, while also exerting inflationary pressure on the economy. And inflation remains persistently high, with essential goods becoming increasingly unaffordable for many Bangladeshis.

Adding to these problems is a wave of labor unrest. Workers across various sectors have organized protests over unpaid wages and unsafe working conditions. Some of this labor unrest has turned violent, forcing hundreds of factories to shut down. Moreover, factories owned by individuals close to the Hasina government have also been targeted, including a suspected arson attack of a tire factory.

The bleak economic situation and ongoing labor unrest has seriously affected the garment sector, Bangladesh’s main foreign export, which threatens international demand and could further imperil the economy.

The return of extremism

The challenges faced by Bangladesh’s interim government have been exacerbated by the resurgence of Islamic extremism and sectarian violence that have long plagued Bangladesh, particularly since the return of Bangladeshi mujahadeen fighters after the Afghan-Soviet war.

Though temporarily suppressed during Hasina’s authoritarian rule, Islamic extremists and vigilantes have gained confidence in recent months and have violently attacked religious and ethnic minorities, as well as sex workers. Vigilantes have destroyed thousands of Hindu homes, businesses and places of worship across the country, causing deep insecurity within the minority Hindu community, which makes up 8% of the population. Extremists have also vandalized about 40 Sufi Muslim shrines.

Meanwhile, Bengali Muslim settlers have attacked ethnic Indigenous groups in the Chittagong Hill Tracts in the country’s southeast, resulting in the deaths of at least three people and the burning of numerous homes and businesses.

The recent violent attacks on the offices of two leading newspapers, which had been accused of anti-Islamic bias, further highlight the threat posed by emboldened religious extremists.

Neighborly squabbles

Attacks on Hindus have also strained diplomatic relations with neighboring India.

Under Hasina, Bangladesh maintained a close alliance with India and Prime Minister Narendra Modi. In addition to joint security collaboration to counter Chinese influence in South Asia, Delhi has also made substantial infrastructure investments in Bangladesh, including $8 billion in loans for various development projects.

But Indian-Bangladeshi relations have been tense following Hasina’s ouster. The former autocratic leader fled to Delhi, where she currently resides, despite plans by the interim government to seek her extradition. Yunus has accused Hasina of continuing her political operations and trying to undermine Bangladesh’s new leaders while being harbored by India.

The arrest of Chinmoy Krishna Das on sedition charges has only exacerbated Indian-Bangladeshi tensions. India’s government has expressed “deep concern” over the monk’s arrest and called for the protection of Hindus in Bangladesh.

The chief minister of West Bengal, India, called for deploying a United Nations-led peacekeeping force in Bangladesh to safeguard minorities, while some leaders from India’s ruling Hindu nationalist BJP party have demanded trade embargoes on Bangladesh.

India holds significant leverage over Bangladesh, both economically and geopolitically. With bilateral trade volumes of $14 billion, India is Bangladesh’s largest trading partner and a key source of essential imports. If India perceives the new government as hostile, it could impose punitive measures that might further cripple Bangladesh’s fragile economy, similar to its unofficial blockade of Nepal in 2015 that led to a severe humanitarian crisis.

The Indian High Commission in Dhaka is highly influential and deeply connected to Bangladeshi politics. A key part of its influence comes from issuing about 2.5 million visas each year to Bangladeshis traveling to India for medical and other reasons. Since Hasina’s fall, India has restricted the issuing of these visas.

A return of autocratic rule?

Given the two countries’ deep economic ties and geographic proximity, I believe Yunus needs to delicately navigate bilateral relations with India. He has to be particularly mindful that Hasina’s current exile in India and the ongoing attacks on Hindu minorities in Bangladesh could provide India with a pretext to more strongly intervene in Bangladeshi politics.

Bangladesh’s current trajectory is, I believe, worrying. How the Yunus government deals with these heightened risks will say a lot about the future direction of the country. Indeed, any failure in these areas could lead to yet more instability, complicating the country’s long-term prospects and making it easier to envision the return of an authoritarian regime.

Manoj Misra does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.