Bangladesh’s Political and Economic Decline: Who Is to Blame?

Saifullah Syed

Bangladesh in recent years has drawn global attention for its success in emerging from poverty through economic growth and agricultural development. From the early 2000s until 2023, while population growth declined from 1.2 percent in 2013 to 1.03 percent in 2023, economic expansion remained a powerful driver of poverty reduction. Agriculture alone accounted for 90 percent of the reduction in poverty between 2005 and 2010, according to the World Bank.

Despite frequent natural disasters and population growth, food grain production tripled between 1972 and 2014, rising from 9.8 million to 34.4 million tonnes. As a result, the country became almost self-sufficient in basic food production, while net overseas development assistance (ODA) as a percentage of GNI fell from 8 percent in 1977 to less than 1 percent in 2023.

Alongside agricultural development, booming exports—led by the garment sector—and remittance inflows pushed foreign exchange reserves beyond $30 billion. With growing confidence and resources, the country launched major infrastructure projects, including large bridges, a deep-sea port, urban metro rail systems, highways, airport modernisation and mega power projects, including a nuclear power plant.

This progress, however, was followed by what many describe as a deluge of corruption and a decay in the moral fabric of governance under the Awami League government led by Sheikh Hasina. While the administration publicly highlighted its achievements, critics argue it simultaneously engaged in widespread corruption, crony capitalism and large-scale financial irregularities, including politically motivated control of banks. The government also alienated young people by restricting access to public sector jobs through a quota system that favoured party supporters.

As a result, student-led protests culminated in the fall of the government and the formation of an interim administration headed by Nobel laureate Professor Muhammad Yunus. The transition was widely welcomed, with hopes for political renewal and reform.

Prof Yunus inherited a country that was politically fractured, financially strained, short of foreign currency reserves and burdened by a weakened banking sector due to unrecoverable loans extended to politically connected individuals. His government appointed experienced economists to key financial positions and successfully stabilised the financial sector.

However, critics argue that weak leadership, flawed reform priorities and inadequate governance have since pushed the country into further uncertainty. While institutional reform was emphasised, law and order deteriorated, with reports of land grabbing, extortion, corruption, arson and violence becoming widespread.

Education and research were also neglected, with budgetary allocations falling to one of the lowest levels in the country’s history relative to GDP—well below international benchmarks. The business community has expressed frustration over factory closures, rising unemployment and limited consultation on labour reforms.

Although agricultural production remained resilient and exports continued to grow for a time, poor governance and uncertainty have increasingly affected economic performance. Poverty is rising, productivity is weakening and confidence among investors is eroding.

Politically, the absence of credible governance alternatives has fuelled support for both Islamist parties and the Bangladesh Nationalist Party (BNP), despite concerns over their past records and ideological positions. This has left voters facing a difficult choice between governance quality and the preservation of mainstream Bengali socio-cultural values.

As the country approaches the February 2026 election, Bangladesh stands at a critical crossroads. The outcome will shape not only political leadership but also the future direction of governance, economic stability and social cohesion.