Bangladesh’s descent from quota stir into chaos

How quickly a country that was coasting along for a decade of strong, export-led growth with improvements in poverty, as well as human development indicators and social capital, can crumble!

Bangladesh Prime Minister Sheikh Hasina resigned on August 5 and fled the country. How suddenly her regime unravelled! It started with anti-quota protests, but more about it later.

It was earlier this year that she won her fifth term in office. Her government won its fourth consecutive term, having ruled since 2009. She has been the longest-serving leader since the formation of Bangladesh. In her previous victory of 2018, her party, the Awami League, secured a landslide victory winning 288 out of 300 seats in parliament.

Since 2010, Bangladesh has had extraordinary economic growth, averaging around 6-8 per cent per annum, peaking at 8.2 per cent in 2019. Even during Covid-19, the economy had a growth rate of 3.5 per cent, which then rebounded to 6.9 per cent in 2021. Briefly, Bangladesh’s per capita income, as measured in dollar terms, exceeded India’s.

Since 2010, the poverty rate has fallen from 31 per cent to 20 per cent, and according to the World Bank, Bangladesh will graduate out of the ‘least developed country’ category by 2026. One of Bangladesh’s spectacular successes has been the export of readymade garments, in which it has now overtaken India and is the second largest exporter in the world. The manufacturing of readymade garments constitutes 80 per cent of manufacturing exports, 11 per cent of GDP, employs 2.5 million women, and attracts foreign direct investment. 

But these economic growth and resilience are for nought, thanks to the meltdown caused by countrywide rioting. Since 2022, the economy has been affected by high inflation (upward of 8.5), especially in food and commodities. That inflation is mostly imported due to geopolitics and the conflict in Ukraine. As a result, Bangladesh’s trade deficit has worsened, putting pressure on foreign exchange reserves and causing stress in debt repayment. It is knocking on the doors of the International Monetary Fund (IMF) for relief loans. The financial sector is very vulnerable.

Income and wealth inequality have risen to unprecedented levels. Don’t forget that Hasina’s party’s victory earlier this year was marred by a boycott by the main opposition party and a voter turnout of barely 40 per cent. The turnout was 80 per cent in 2018. This economic backdrop is important to keep in mind as we witness the large-scale riots and crumbling social order in our neighbouring nation. 

The immediate provocation was the reinstatement of quotas in government jobs for relatives and descendants of freedom fighters of the 1971 liberation war. The initial quota of 30 per cent was introduced in 1972. Over the years, it expanded to nearly 56 per cent. But there was increasing resentment against it. It was seen as detrimental to the interests of meritorious candidates. In 2018, due to widespread protests, mainly from young job seekers and students, the quota system was scrapped.

In June, the high court reinstated the quota system, triggering nationwide riots. This time, since inflation and youth unemployment are high, economic aggravation is adding to the quota question. The protests turned violent, causing concern even from the United Nations. More than 300 people died in the civil unrest. The government clamped down harshly, imposing a curfew, banning the assembly of people, and suspending the Internet. On July 21, the Supreme Court overturned the high court’s judgment.

The Bangladesh government has banned the Jamaat-e-Islami, which is also blamed for inciting violence and terrorism. The anti-quota unrest turned into an anti-government movement, and political opponents took advantage of the deteriorating situation. Last year, too, there were violent protests against Hasina and her party, ostensibly against alleged corruption. The constitution of Bangladesh does not allow political parties based on religion, like the Jamaat, but it has managed to survive till now.

There are lessons from Bangladesh’s descent into chaos. The anti-quota protesters felt that meritorious youth were being denied opportunities because of quotas based on birth or blood relationships to freedom fighters. Besides, there was large-scale fraud in obtaining freedom fighter credentials and related certificates.

In India, quotas work based on being part of historically socially disadvantaged groups. However, there have been instances of fake caste certificates to grab quota benefits. In Bangladesh, nearly 40 per cent of those in the age group of 15 to 29 are in the ‘NEET’ category i.e. Not in Employment, Education, or Training. Some 18 million youth are jobless. According to the Bureau of Statistics, about 37 million people faced moderate to severe food insecurity in 2023. The government raised electricity, utility and gas prices thrice within a single year, causing much hardship and inflationary burden.

Amidst charges of corruption, especially in government, inequality was rising. The wealthiest 10 per cent get 41 per cent of the nation’s income, while the bottom 10 per cent receive only 1.3 per cent. The conditions of high youth unemployment, out-of-control inflation, the deteriorating foreign exchange resulting in high fuel prices, and worsening inequality were the recipe for a tinder box. Into this was thrown in the ignition spark provided by reservation. There is also the element of Islamic radicalisation, which tapped into youth discontentment.

How quickly a country that was coasting along for a decade of strong, export-led growth with improvements in poverty, human development indicators, and social capital can crumble? Perhaps Bangladesh will bounce back and show the kind of resilience it demonstrated in its post-Covid-19 recovery. Maybe the extremist elements will be overpowered by larger sections of society with deep roots in Bengali and syncretic culture as well as democratic sensibilities. A stable and prospering neighbour is also in India’s interest.

(The author is a Pune-based economist). (Syndicate: The Billion Press)