Will Yunus Be Able To Yank Bangladesh Out Of An Economic Morass?

The country with about 200 million people has high expectations from the 84-year-old Yunus, recipient of the Nobel Peace Prize in 2006 for founding Grameen Bank.

Not only will he have to restore peace in the country and make way for general elections so that a full-time government can be put in place, but his mettle will be especially put to the test as he is expected to announce a fresh economic roadmap.

Apart from a few, Yunus will be overseeing most ministries and departments including defence, education, agriculture, road highways and bridges, land, food, housing and public works, textiles and jute, labour and employment among a host of others.

The economic crises in Bangladesh have been getting worse with rising unemployment, high inflation rate of more than 9 per cent, ballooning external debt and falling exports. After a steady fall in foreign exchange, the country’s foreign exchange reserves increased to US$ 26.8 billion in June from US$ 24.2 billion in May.

However, reserves have been falling steadily for the last one year. The total reserves in Bangladesh fell by US$ 11.9 billion in 2023 compared to the previous year.

Bangladesh's foreign debt in 2010 was at US$ 20.33 billion but by February 2023, it touched US$ 59.21 billion.

An acute power crisis has severely impacted the crucial readymade garment industry, one of the world's largest, earning about $46 billion. Several factories have been forced to shut down due to the power crisis.

The political unrest culminating in a month-long students' agitation further crippled the garment sector, resulting in supply chain disruptions all over the globe. Cancellation of orders has only been rising.

“To what extent he (Yunus) can turn the economy around and how much time he will have to lead the government remains a big question, especially with a council of advisors whose experience in governance is hardly anything to write home about,” Syed Badrul Ahsan, political analyst and noted Bangladeshi author told The Secretariat.

“He will also need to act against the syndicates which have kept markets in their grip through manipulating prices,” Ahsan said, adding that a host of banks are clearly in the red too, with many on their management having decamped with unbelievably large sums of money. 

Besides Yunus, former governor of Bangladesh Bank Salehuddin Ahmed, Brigadier General (retd) and former election commissioner M. Sakhawat Hossain, Professor Md Nazrul Islam (Asif Nazrul), human rights activist Adilur Rahman Khan, former attorney general AF Hassan Ariff, former foreign secretary Md Tauhid Hossain, chief executive of Bangladesh Environmental Lawyers Association Syeda Rizwana Hasan are among the 17-member advisory council besides Yunus.

Also Read: Interim Government In Bangladesh, What Are Its Implications For India And The World?

Will India Be Impacted?

India, which has been increasing its investments in Bangladesh, has adopted a wait-and-watch policy.

For now, trade between the two countries has come to a halt. But Ajay Sahai, Director General and CEO, Federation of Indian Export Organisations (FIEO) said that trade is expected to resume by next week.

“The chunk of items that India exports to Bangladesh are essential in nature and key for their own economy. They are not luxury items,” Sahai told The Secretariat.

India and Bangladesh have been jointly developing several infrastructure and connectivity projects as well. While sources said that the new administration in Bangladesh is likely to review the existing projects and schemes, there may not be any significant deviation in policy measures at this juncture.

An upbeat Yunus, who was outside the country when former prime minister Sheikh Hasina was ousted, on his return on Thursday said that Bangladesh has created a new victory day.

Policy measures and actions of Yunus, though a popular figure in Bangladesh currently basking in an almost unprecedented glory, will now be scrutinised carefully.

“If we are not careful this time, we might end up with the same old game with a revolving set of players wreaking havoc on the country,” Zahid Hussain, former lead economist of the World Bank's Dhaka office wrote in an article published in the Daily Star. 

“After a month-long bloody struggle, we have crawled out of the black hole of despotism and tyranny. But the black hole is still there, patiently waiting to swallow us once again. The nation must not let its guard down,” he said.