US intervention and neoliberalism deepen political turmoil in Bangladesh

Weeks of student-led, often violent protests forced the resignation and exile of Bangladeshi Prime Minister Sheikh Hasina on Aug. 5. The demonstrators were responding to inflation, unemployment, government and banking corruption, and a quota system that gives preferential government jobs to descendants of those who fought for national liberation. The brutal police crackdown and killings were a reminder of Bangladesh’s long history of repeated coups, protests, and deadly violence.

Sheikh Hasina’s Awami Alliance won a large parliamentary majority in elections held in January 2024, and she remained prime minister. She served from 1996 to 2001 and again from 2008. Sheikh Hasina faced little opposition in the low-turnout elections. The large Bangladesh Nationalist Party (BNP) did not participate

Her political party harks back to the Awami League, a key figure in the liberation struggle that transformed the former East Pakistan into an independent state in 1971. Sheikh Hasina’s father, Sheikh Mujibur Rahman, was an Awami leader and the first president of Bangladesh. He and most of his family were killed in a 1975 coup.

In this article, we consider the economic factors contributing to people’s unrest and dissatisfaction, as well as the role of the United States in the country’s difficulties.

Indian economist Prabhat Patnaik suggests that the Sheikh Hasina government was unaware of both the changing economic situation in the country and the worsening living conditions. He points out that until recently, “the growth in Bangladesh’s apparel exports (was) so rapid that it was even suggested that in a very short time, Bangladesh would meet as much as 10 per cent of the global demand for apparel.” In 2022-2023, the industry contributed 84.58 per cent of Bangladesh’s export earnings.

Now production and exports are limited. Patnaik points to “the rise in imported fuel prices following the start of the Russia-Ukraine war (which) contributed to a severe shortage of foreign exchange, caused prolonged power outages, and also caused energy prices to rise, with cost effects on the entire economy.”

Factors contributing to inflation include “the depreciation of the exchange rate against the dollar” and “the increasing fiscal pressure that the government is forced to enforce in a neoliberal environment.” The government is unable to “insulate people from the effects of inflation.” Furthermore, “raising the minimum wage as a means of compensating workers in the face of inflation is… (impossible) in a neoliberal environment”; “export markets” would suffer.

Patniak’s report appears on People’s Democracy, the website of the Communist Party of India (M). It suggests that “the transcendence of neoliberalism requires mobilising people around an alternative economic strategy that gives a greater role to the state, focuses on the domestic market and on domestic control over minerals and other natural resources.”

Nobel Peace Prize winner Muhammad Yunus now heads a caretaker government backed by the Bangladesh military. The army chief and representatives of three political parties are meeting to form a caretaker government of “advisors.” Preparations are underway for elections.

Awami League is not taking part. Patnaik notes that “if Awami League is not allowed to take part in the elections that are due to be held, then right-wing parties will become the main beneficiaries of the political upheaval; Bangladesh will be pushed to the right, to the delight of imperialism and the country’s corporate oligarchy.”

The US government is paying attention. Assistant Secretary of State Donald Lu visited Bangladesh on May 17. In an interview, he indicated that the discussions concerned Bangladesh’s role in the US strategy for the Indo-Pacific region. He denied reports that the United States wants to build an air base in Bangladesh.

The U.S. State Department announced sanctions against retired Army Gen. Aziz Ahmed on May 20 for “significant corruption.” Its statement reflected the U.S. “commitment to strengthening democratic institutions and the rule of law in Bangladesh.”

Prime Minister Sheikh Hasina addressed a meeting of leaders of political parties that are part of the Awami League on May 23. She said an unnamed foreign country was seeking her consent to build an air base in Bangladesh and would reward her with protection for her term in office. The proposal, she said, came from a “white-skinned country”. She insisted that “I do not want to acquire power by renting or giving away certain parts of my country to someone else”.

Hasina’s hold on power was precarious. At a June 4 follow-up meeting, independent Awami League candidates and heads of political parties affiliated with the League joined in vigorously opposing the January 2024 election results.

Hasina had earlier predicted that “if the (opposition) BNP comes to power, it will sell the island to the United States.” She was referring to St. Martin Island, located in the Bay of Bengal at the southernmost tip of Bangladesh. It is eight kilometers (5 miles) off the west coast of Myanmar.

In 2003, the US ambassador to Bangladesh, Mary Ann Peters, dismissed speculation about a US air base in the country. In parliament on June 14, 2023, MP Rashed Khan Menon, chairman of the Workers’ Party, Bangladesh’s largest communist party, he claimed that “the US wants the island of Saint Martin and wants Bangladesh in the Quadrilateral Security Dialogue (Quad). They are doing everything to destabilize the current government.”

The Bay of Bengal is crucial to maritime trade throughout the region. An Indian observer notes that “the island is ideally situated to facilitate surveillance in the Bay of Bengal, which has gained strategic importance due to China’s assertive actions in the Indian Ocean region.” A Myanmar analyst describes China as “the most influential foreign actor in Myanmar (and) the largest investor” in the region.

The U.S.-backed “Quad” alliance against China includes India, Japan, Australia and the United States. The U.S. government has long pressed Bangladesh to join, while China has urged Bangladesh to maintain its nonaligned status.

In his speech, Menon condemned the visa policy announced by the US State Department on May 24, 2023, as “part of their ‘regime change’ strategy.” The US government would suspend visas to Bangladeshis (including family members) who are perceived to be “undermining the democratic electoral process in Bangladesh.”

Menon had more to say: “During our liberation war, (the United States) sent the Seventh Fleet with the aim of depriving us of our hard-won victory. In the midst of a great famine, they diverted a grain ship from the Indian Ocean, a calculated move to disrupt Bangabandhu’s administration. Their covert influence was also involved in Bangabandhu’s assassination. They are now repeating such tactics, doing everything in their power to undermine the existing government.” (“Bangabandhu” is an honorific title of Sheikh Mujibur Rahman, the father of Sheikh Hasina.)

Under Sheikh Hasani’s leadership, U.S.-Bangladesh relations have cooled, largely in response to U.S. accusations of human rights abuses and U.S. economic sanctions. During a July 10 visit to China to seek $20 billion in new loans, Hasani signed 28 bilateral agreements focused on trade and investment. Through its Belt and Road Initiative, China has modernized the country’s infrastructure.

Bangladesh, it seems, is a small country tied to the world economic system serving the great powers, but always close to social and economic catastrophe. Its fate is not unique.

Patnaik elaborates on the subject as follows: “Due to the global capitalist crisis, many third world countries pursuing neoliberal policies are sinking into economic stagnation, high unemployment and growing external debt, which will make the centrist regimes ruling there, which retain a certain degree of autonomy from imperialism, unpopular; however, this creates conditions for right-wing regimes supported by imperialism to overthrow these centrist regimes and seize power.”

In an authoritarian turn, the new government’s security forces on August 22 arrested and detained Labour Party President Rashed Khan Menon along with other Sheikh Hasina cabinet ministers. They were blamed for the deaths resulting from street protests before August 5. His defenders see “political revenge” on the way.