Staff Reporter :
Bangladesh’s interim government is grappling with mounting political and economic challenges as its initial wave of support wanes, according to the latest Watch List report by the International Crisis Group (ICG), published on 30 January.
The report, titled Bangladesh: The Dilemmas of a Democratic Transition, highlights increasing pressure from opposition parties, strained relations with India, and concerns over governance and stability.
The ICG notes that while Nobel laureate Professor Muhammad Yunus leads the administration with a vision for reform, his government has struggled to manage political divisions and growing public discontent.
The report warns that the coming months will bring intensified competition among political parties, student groups, and Islamist factions, each vying for influence ahead of future elections.
One of the key concerns is Bangladesh’s deteriorating relationship with India, which had strongly supported the previous Awami League government led by Sheikh Hasina.
The ICG suggests that the European Union (EU) should encourage both Dhaka and New Delhi to rebuild diplomatic ties and ensure regional stability. It warns that rising anti-India sentiment within Bangladesh could undermine cooperation on bilateral projects initiated under Hasina’s administration.
Economic hardships also present a significant challenge. Rising inflation and the high cost of living, attributed to previous mismanagement, have fuelled public frustration.
Crisis Group’s Senior Consultant, Thomas Kean, emphasised that while Yunus’s government has initiated economic reforms, their impact will take time to materialise.
He called on international partners, particularly the EU, to provide technical and financial assistance to help stabilise the economy and support a smooth democratic transition.
Another pressing issue is the ongoing Rohingya refugee crisis. Bangladesh currently hosts over a million Rohingya refugees, yet international funding for humanitarian aid is declining.
The ICG warns that this trend may worsen, particularly if a new US administration reduces aid contributions. It urges European nations to increase financial support and resettle more Rohingya refugees to ease the burden on Bangladesh.
The ICG also highlights the role of the Arakan Army, a key player in Myanmar’s conflict, suggesting that Dhaka engage with the group to facilitate potential repatriation efforts for the Rohingya. It stresses the need for policies that promote refugee self-reliance and reduce the cost of humanitarian aid delivery.
Despite these challenges, the ICG remains cautiously optimistic about Bangladesh’s potential to build a more inclusive and accountable political system.
The report acknowledges the efforts of reform commissions tasked with drafting policy recommendations but stresses that sustained international engagement will be crucial for a successful transition.
For the EU, Bangladesh represents both an opportunity and a responsibility. The ICG urges European nations to support efforts to strengthen democratic institutions, combat corruption, and ensure economic stability.
It also recommends that the EU assist Bangladesh in recovering assets allegedly acquired illegally by figures from the previous government, many of which are believed to be held in Europe.
As Bangladesh navigates this critical period, the success of its interim government will depend on its ability to balance domestic reforms with international cooperation. The coming months will test its capacity to maintain stability while steering the nation towards a credible electoral process.
