Bangladesh is currently grappling with severe socio-economic turmoil following the resignation of Prime Minister Sheikh Hasina in August 2024. The political landscape has been marked by violent student protests over job quotas, resulting in approximately 130 deaths and widespread chaos. In the wake of these events, Hasina fled to India, leading to the formation of an interim government supported by the United States and Pakistan. This new administration, led by Nobel laureate Muhammad Yunus, is tasked with addressing a faltering economy that was already strained by the COVID-19 pandemic and rising fuel prices [b4b22494].
As of August 2024, inflation has reached 9.52%, and GDP growth is projected to remain below 6% for the next two years. The garment industry, which constitutes 80% of Bangladesh's exports, is heavily impacted by the unrest and economic instability. Reports indicate that the sector is struggling to maintain operations, with significant losses anticipated due to ongoing protests and curfews [5f1bf086].
In a recent seminar held in Dhaka on September 28, 2024, speakers emphasized the urgent need to restore macroeconomic stability, law and order, and rebuild confidence among entrepreneurs. Key issues highlighted included ensuring food security, containing inflation, and boosting the tax-GDP ratio. Dr. KAS Murshid stressed the importance of broad-based growth and investment in food and energy security, while Dr. Mohammad Abu Eusuf identified the ready-made garment (RMG) sector, remittances, and rice production as critical areas for recovery. He also noted that with adequate support, the leather sector could generate $10 billion annually [50b89043].
The economic challenges are compounded by a drop in foreign exchange reserves to approximately $20.5 billion, while external debt has surpassed $100 billion. The interim government is currently seeking a US$3 billion loan from the International Monetary Fund (IMF) to stabilize the economy [545d3efc]. DCCI President Ashraf Ahmed called for mid-term reforms and maintaining loan disbursement in the CMSME sector, warning that labor unrest could hinder growth [50b89043].
Despite the turmoil, it's important to recognize the significant achievements under Hasina's leadership, which included GDP growth rates of 6-8% from 2009 to 2022 and a reduction in poverty from 44% in 1991 to 18.7% in 2022. However, the rapid shift from success to crisis underscores the necessity for effective governance in developing nations, especially in the face of global challenges [b4b22494].
As the interim government navigates these turbulent waters, the future of Bangladesh's economy and political stability remains uncertain. The need for reforms and a return to stability is critical to restore confidence among international buyers and foreign investors, as the garment sector's exports are projected to drop by 10-20% this year [f750be11].