IS BANGLADESH AT THE BRINK? - ECONOMY, JUSTICE AND THE WAY FORWARD Part II — Economic Anxiety, Judicial Crisis and the Way Forward An Economy Under Pressure Political instability has an economic price, and Bangladesh is now paying that price through slower growth, persistent inflation, industrial uncertainty and declining investor confidence. The country is not necessarily facing economic collapse. But the economy is operating well below the pace required to generate sufficient employment and maintain improvements in household living standards. The World Bank's April 2026 Bangladesh Development Update projects GDP growth of 3.9 percent in FY2026, with inflation around 8.5 percent. The IMF projection cited is somewhat higher, at 4.7 percent growth, but with inflation potentially reaching 9.2 percent. These numbers matter because Bangladesh has a young and expanding labour force. Slow growth means fewer productive jobs, greater pressure on household incomes and increased vulnerability among low-income families. The Industrial Sector at Risk The consequences are already being felt in manufacturing and especially in the ready-made garment sector. The draft identifies several pressures: • labour unrest; • shortages of raw materials; • unreliable electricity; • inadequate gas supplies; • factory closures and reduced production; • declining wages and employment; and • increasing uncertainty among investors. It estimates that nearly three million workers, many of them women employed in the garment industry, have lost jobs or suffered substantial wage reductions. The underlying concern is undeniable: prolonged disruption in the RMG sector would have consequences far beyond individual factories. Garments are not simply an export industry. They are a major source of employment, particularly for women, and an important foundation of Bangladesh's foreign-exchange earnings. If factories cannot operate reliably, workers cannot earn reliably, exporters cannot meet orders, and international buyers begin looking elsewhere, the damage can become cumulative. Capital Flight and Investor Confidence Investment requires confidence. Businesses must believe that their property, contracts, employees and capital will be protected. The draft describes growing concerns over extortion, intimidation and possible attempts to take over private businesses. It also cites reports of a sharp increase in deposits held by Bangladeshi nationals in Swiss banks as an indication of capital leaving the domestic economy. Whatever the precise scale of capital flight, the larger issue is clear: capital will not remain in an economy where investors fear political violence, arbitrary intervention or weak protection of property rights. The reported 600-billion-taka emergency stimulus for export-oriented apparel businesses may provide temporary assistance. But financial support cannot substitute for reliable electricity, adequate gas supplies, physical security and predictable regulation. Economic recovery ultimately depends on restoring confidence. The Judicial Vacuum Perhaps the most dangerous dimension of the current crisis is the weakening of public confidence in justice. The available reports highlight the alleged normalization of so-called "shown arrests"—where an individual who obtains bail in one case is subsequently connected to another case before being released. If such practices occur systematically, they fundamentally undermine the principle that a court order should have practical meaning. The consequences are severe: • prolonged pre-trial detention; • selective application of criminal law; • opportunities for extortion; • political victimization; • weakening of judicial credibility; and • growing public fear. A justice system cannot command public respect if citizens believe that obtaining bail in one case merely means being transferred into another. The problem becomes even more serious when questions arise concerning the integrity of medical and forensic evidence. The Importance of Evidence It is reported that a case from Kurigram involved three journalists accused in connection with the death of Ashikur Rahman, who had been identified as a "July martyr." It reports that hospital records subsequently indicated septic shock associated with a longstanding brain infection rather than traumatic injury. It further states that the attending physician acknowledged falsifying the death certificate under political pressure. Such allegations would illustrate an extremely serious problem: the use of state records and forensic evidence as instruments of political prosecution. A democratic justice system depends upon a simple principle: Facts must determine the case; political interests must not determine the facts. Medical records, death certificates, police reports and forensic evidence must therefore be protected from political interference. Otherwise, justice becomes not a mechanism for establishing truth but a tool for manufacturing it. What Bangladesh Must Do Now Bangladesh cannot solve its institutional crisis through another round of political retaliation. Nor can economic recovery be separated from public security and the rule of law. Four priorities should therefore guide the next phase. 1. Rebuild a Professional Police and Ansar Service Law enforcement must become professional, politically neutral and accountable. An independent Police Service Commission could help establish transparent standards for recruitment, promotion, discipline and professional conduct. Police and Ansar officers must be protected from partisan pressure while being held accountable for misconduct. Civilian police should remain the primary institution responsible for routine public security, while the armed forces should perform their constitutionally defined responsibilities. 2. Restore the Integrity of Justice The government should establish strong safeguards against politically motivated arrests and fabricated cases. Key measures should include: • independent judicial review of questionable cases; • credible forensic and documentary evidence before prosecution; • strict safeguards against repeated arrests after bail; • timely trials; • accountability for custodial abuse; and • transparent review of cases involving credible allegations of political persecution. Justice must be available to government supporters and opponents alike. 3. Protect the Productive Economy Economic recovery requires more than stimulus packages. The government should prioritize: • uninterrupted gas and electricity supplies; • protection of industrial zones; • effective action against extortion; • security for factories and commercial centers; • predictable taxation and regulation; • protection of private property; and • stronger confidence among domestic and foreign investors. The private sector cannot create jobs if entrepreneurs spend more energy protecting their businesses than expanding them. 4. Begin Genuine National Reconciliation Bangladesh's political history has been dominated by cycles of inclusion and exclusion. That cycle must end. A durable political settlement requires space for all lawful political forces to participate peacefully. It is important to call for the inclusion of the Awami League and its allies in the democratic process. Political participation should, however, operate within a clear legal framework. Parties and individuals must be accountable for genuine criminal wrongdoing, but political disagreement should never itself become a criminal offense. A Different Political Future Bangladesh has already demonstrated that it can change governments. The harder task is to build institutions that do not have to change every time the government changes. The country needs a police service that serves the law, not the ruling party. It needs courts that protect citizens rather than political interests. It needs an administration that functions regardless of who occupies the Prime Minister's office. It needs an economy where businesses can invest without fear and workers can earn without uncertainty. And it needs a political culture in which disagreement is accepted as part of democracy rather than treated as an existential threat. The three political eras since 2024 provide three different warnings. The Hasina period demonstrated that development without sufficient institutional accountability can produce fragile stability. The Yunus period demonstrated that political transition without institutional continuity and efficient management capacity can create dangerous vacuums. The BNP period now presents a different test: whether electoral authority can be transformed into institutional legitimacy. Institutional accountability and capacity to handle the economy continue to be a challenge. Bangladesh's future will not ultimately be determined by which party wins the next election. It will be determined by whether the country's institutions are strong enough to survive the next election. That is the real measure of democratic maturity. The choice before Bangladesh is therefore not simply between one political party and another, or between one government and its predecessor. It is a choice between political cycles and institutional continuity; between vengeance and reconciliation; between fear and confidence; and ultimately between a state controlled by politics and a state governed by law. Bangladesh has enormous human, economic, and social potential. Its development achievements demonstrate what the country can accomplish when institutions function, and resources are mobilized effectively. But development cannot be sustained without justice, security, and trust. The country has changed governments before. Now it must change the way government itself works.

Author: Ali Kabir, Management Specialist, Toronto, Canada