The Economics Behind the Fall of Autocracy in Bangladesh
Photograph Source: Rayhan9d – CC BY-SA 4.0
Naheed Islam was not yet born in 1996, when prime minister Sheikh Hasina of Bangladesh began her first term in office. In 2009, when she was elected to her second term, Islam had just turned 11. On August 5, he brought an abrupt end to Hasina’s 15-year long autocracy.
The 26-year-old Islam, a sociology major at Dhaka University, led the democratic uprising against Hasina’s patronage hires that had solidified her power base. Ostensibly, this patronage was meant to reward the relatives of those who fought for the country’s independence in 1971, when Bangladesh broke away from the mother country Pakistan. Over the years, however, this pretense thinned out as a fig leaf for stacking the government with party loyalists. The Awami League, which Hasina’s father Sheikh Mujibur Rahman founded, and she led, dished out jobs to those who pledged fealty to the party. Patronage hires, in turn, helped suppress dissent and accelerate concentration of power in the ever-grasping hands of Hasina.
During the democratic uprising, Hasina called on her party loyalists government-wide to crush the protesters whom she contemptuously slurred as Razakars (hired assassins). Those beholden to her answered the call with ardor, swarming the streets confronting, bullying, and even slaughtering protesters. Dhaka University, which was the epicenter of the uprising and Naheed Islam’s headquarters, saw countless bloody encounters in which party loyalists unleashed brutality against protesters. Similarly, security services were merciless to protesting students and their allies. Yet, in the face of lethal violence, protesters stood their ground while dying in the hundreds.
What fortified protesters’ determination to push back against state violence was their uncertain economic future. College and university students who swelled the ranks of protesters were dejected at ever-scarce jobs in the private sector, which was dominated by textiles that account for 80 percent of the country’s exports. Despite its staggering contribution to the GDP, the textile industry cannot soak up thousands of freshly minted graduates each year. The textile sector employs around 4 million workers, but it is a highly gendered sector: 80 percent of all textile workers are women. That’s why public-sector employment became ever more attractive. But to land such jobs, college and university graduates had to grease the party machine with party loyalty.
As many as 30 percent of government jobs were reserved for patronage hires that party bosses would distribute to those who swore fidelity to the party, i.e., the Awami League. This led to the political capture of government by one party and one person who brooked no dissent, which she ruled unpatriotic. Dissidents found themselves jailed or exiled. Khaleda Zia, leader of the main opposition party, Bangladesh National Party (BNP) and the political nemesis of Hasina, had to spend the past 15 years in jail or house arrest. She was released the day after Hasina fled into exile.
Zia’s freedom owes itself to mass disaffection over quota jobs, which had been simmering for years. Hasina had been see-sawing with protesters: suppressing them when she could, retreating when she couldn’t. In 2018, she suspended the quota after mass protests by students. But in June this year, she had the Supreme Court restore the same on appeal that ignited a new round of protests in July through early August.
A month of democratic uprising brought Hasina to heel. She was, however, hopeful of surviving the mass revolt, as she did in the past. Hours before her motorcade of over a dozen vehicles headed for a nearby military airbase to fly her out of Dhaka, Hasina was still huddling with her defense and security chiefs. She was instructing military leaders to follow the example of her police and paramilitary forces that had sternly dealt with protesters. By then, they had already slain over 400 of them. The chief of army staff, who is Hasina’s relation by marriage, pleaded with her that violence was not the answer to a mass movement that had swept the country and whose advancing throngs were within striking distance of her residence. Hasina was adamant that the protest movement could be tamed by the strategic deployment of violence. As this back and forth continued, Hasina’s sister, who was visiting her, intervened and called her sibling out of the huddle to have a word in private.
Minutes after, Hasina returned to the meeting unpersuaded. By then, the chief of army staff had Hasina’s son, who lives in the United States, on the phone to speak with her. The son politely told his mother that it was over. By the time Hasina came around to the chief of army staff’s pleading, she didn’t even have time to write her resignation. She hurriedly gathered what came to hand and left her residence. Her motorcade had to make several detours to evade the frightening surge of protesters. Hours after her departure, protesters were swarming her palace, helping themselves to food, flowerpots, fans, and wall clocks ripped off the mansion’s walls. A young woman was seen getting a workout on a treadmill. The chaotic scenes evoked the images in 2022 of protesters breaching the mansion of the Sri Lankan president, who also had to flee the country in the face of public protests.
Hasina, however, presided over a booming economy that quadrupled on her watch from $102 billion in 2009 to $437 billion in 2023, making Bangladesh the second largest economy in south Asia, next only to India. The country’s per capita GDP of $2,529 in 2023 was highest in the entire south Asia. More importantly, she saw the poverty rate slashed from 44 percent in 1991 to 18.7 percent in 2022. The unemployment rate, at 5.1 percent in 2023, was the lowest on the subcontinent.
What, then, caused the mass eruption against her and her government?
It began with the pandemic in 2020 that put immense pressure on the household economies. Bangladesh, having been a textile-dominated economy, endured a dramatic dip in garment orders. About a million workers, one-fourth of the entire textile sector’s workforce, were rendered jobless. On top of that, the Russian invasion of Ukraine caused a steep spike in fuel prices that Bangladesh massively subsidized. To make matters worse, multilateral institutions forced the government to cut fuel subsidies in half. This cut raised the price of everything that needs fuel to operate: electricity, food, transportation, groceries, and all manner of everyday staples. Remittances that finance the current account (trade balance) and keep the foreign exchange reserves replenished dropped as well. This sent food and fuel prices soaring. Faced with a gathering financial drought, the government went to the IMF in 2022 to seek $4.5 billions in loans to pay the bills.
It is tempting to paint former Prime Minister Sheikh Hasina as the villain of the piece. But in the grand scheme of things it is the neoliberal economic order that felled her. Similar trends are sweeping across south Asia. In 2022, Sri Lanka, once a prosperous economy, suffered the collapse of government after going into default. The same year, the Pakistani government fell, again over fears of default. This year, India’s ruling Bhartiya Janta Party was humbled at the ballot box, losing its absolute majority in parliament because it courted crony capitalism.
And now Hasina’s government. She suspects that the United States played a role in her ouster since she refused to give it St. Martin Island, whose strategic location could help surveille the Bay of Bengal and the entire Indian Ocean. The State Department laughed off the suggestion. It seems that every fallen leader finds it seductive to claim cheap martyrdom by blaming their fall on the United States. True to this pattern, Imran Khan, a former prime minister of Pakistan, accused the United States of toppling his government in 2022 because he denied it military bases, a canard that even Noam Chomsky debunked as nonsense. That said, Hasina is as much victim of the neoliberal reality as she is a villain to her detractors.
The bottom line is that the bottom line led to Hasina’s ouster.
This first appeared on FPIF.
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