11th General Election
The 2018 election produced a decisive victory for the Sheikh Hasina-led Awami League [AL], securing an unprecedented third consecutive term for her as PM. Despite criticism of heavy-handed policies against a fragile opposition and other electoral malpractices, AL’s victory at the polls was a foregone conclusion. The opposition parties made a valiant, albeit, desperate attempt to form a joint unity front or a Bangladeshi “Mahagathbandhan”. The opposition’s game plan failed to enthuse voters and they only managed to win 7 seats in a 300-seat Parliament. The Bangladesh Nationalist Party [BNP], the main opposition party, was hobbled to such an extent that it had to seek a place under the umbrella of the joint unity front, organized by the veteran jurist Dr Kamal Hussain, a former Foreign Minister who fell out with Sheikh Hasina and quit the AL to form the Ganoforum. The Bikalpadhara, led by former President Badruddoza Chowdhury, first joined the joint unity front and then abandoned it, delivering a crucial blow to the opposition.
Opposition in Disarray
The election also exposed the political bankruptcy of the BNP and allied parties. Left leaderless, with Begum Khaleda Zia in jail for several convictions on corruption charges and her son, Tarique Rahman, deputy leader of the BNP, in exile in London, also convicted for corruption and murder charges, the BNP’s descent into decline was inevitable. The venal governance of the BNP-JeI coalition, led by then PM Khaleda Zia and controlled by her son Tarique Rahman during 2001-2006, was also a substantive reason for voter rejection. Like most developing countries, majority of Bangladeshi voters are young and aspirational. They voted overwhelmingly for AL for the impressive economic progress the country has achieved under the stewardship of PM Sheikh Hasina and her secular leaning policies. AL’s electoral victory is an emphatic rejection of the Islamist leaning and anti-Indian politics of the BNP and its principal ally, the Jamaat-e-Islami [JeI], the latter widely regarded as a proxy for Pakistan.
The JeI, the largest Islamist party, was debilitated by convictions and hanging of most of its leaders on 1971 war crimes charges. The JeI was also banned as a political party by the Election Commission because in its charter, it virtually disowned the Constitution of Bangladesh as man-made and the JeI Charter asserted that all laws had to follow God-given Sharia. The JeI put up 22 candidates using the BNP election symbol. Post-election the JeI has faced further setbacks when its younger leadership, either resigned or were expelled from the party, blaming the elders in the party for failing to apologize for its heinous role as collaborators in the genocide committed by the Pakistan Army during the 1971 war of liberation. The older leadership of the JeI are still unwilling to atone for their role as Pakistani collaborators, their genocide and working against the independence of Bangladesh.
The AL’s electoral triumph has raised questions about whether Bangladesh is heading towards a one-party dominated country. It has raised memories of the pre-1975 one-party BAKSAL era, when Sheikh Mujibur Rahman, Sheikh Hasina’s father, had abolished political parties and introduced a one-party system at a time when newly-independent Bangladesh was wracked by post Liberation war problems. AL’s margin of victory has given traction to persistent allegations of electoral malpractices, hounding of the opposition with large scale arrests, ballot stuffing and intimidation of voters. Giving credence to these allegations were instances of opposition candidates withdrawing their candidature. While there have been instances of election malpractices, international observers have certified that the election were, by and large, free and fair, burying allegations of any large-scale manipulation
In the post-election phase Bangladesh faced a strange problem of convening a Parliament where there was no opposition. The 5 BNP MPs refused to take oath as Parliamentarians, though 2 MPs belonging to the Gonoforum [Dr Kamal Hossain’s Party], have broken ranks and taken oath as MPs recently. Boycott of Parliament by the losing Party and allies has been a recurring theme in Bangladesh. In 2104, when the BNP and allies boycotted elections, in the mistaken belief that external pressure will make PM Hasina bow to their pre-conditions for holding elections, the Parliament functioned sans a real opposition. There arose a bizarre situation when a section of the Jatiyo Party, and ally of the AL, headed by Raushan Ershad functioned as the opposition. At the same time a member of this party became a Cabinet Minister.
The same dilemma persists after the current round of election. The Jatiyo Party, with 22 seats in Parliament, has declared that it will function as the opposition, though it fought the election as an ally of the AL. The Jatiyo Party has no representative in the new Cabinet. Hence, two consecutive Parliaments will be without a viable opposition. This situation is certainly not conducive for a healthy democracy. The blame for this state of affairs must be borne primarily by the BNP which misread the situation and have landed in this predicament. The immature and poor leadership of Tarique Rahman is the main cause. The future of the BNP looks bleak, unless it reinvents itself, with or without Tarique and his mother Khaleda. Time is running out for the BNP and it is cornered. There is no indication that it can shake off the baleful influence of Tarique. Meanwhile, other political parties like the Bikalpadhara will steadily gain traction and may well emerge as the 3rd major party, if the BNP sinks into terminal irrelevance.
The electoral victory of the AL owes much to the creditable performance of the Bangladesh economy. In the last two decades, under the leadership of PM Sheikh Hasina, Bangladesh has recorded remarkable economic progress and it is now an “emerging tiger economy”. PM Hasina has also shown stern resolve in rolling back Islamic extremism that had started rearing its head again in Bangladesh. PM Hasina’s handling of the Rohingya refugee issue has earned her international acclaim, though it has led to some unhappiness in bilateral relations with India. Bangladesh expected India to back its stand, forgetting that India’s ties with Myanmar were also at stake. India had no choice but to balance its approach to the Rohingya refugee issue, given the emotive factor in Myanmar. Both countries are integral to India’s “Neighbourhood First” and “Act East” policies. India has, however, stepped up humanitarian aid to Bangladesh for dealing with the Rohingya refugees.
Bangladesh is now on track to overtake Pakistan’s GDP per capita this year. This is no mean feat for a country that was once the poorest in South Asia. It suffered from egregious exploitation by the governing elite based in Islamabad, during the years it was East Pakistan. After its war of liberation and the aftermath of emergence as Bangladesh, its economy and people were often battered by natural disasters, poverty and famine. Bangladesh’s economy rebounded in the early years of this century and by 2006, the GDP growth rate started exceeding that of Pakistan by approximately 2.5 % per annum. In the Current year Bangladesh’s GDP growth rate will exceed that of India. With 1.1% growth rate in population [Pakistan’s is 2.0%], Bangladesh’s per capita income is growing faster and hence the expectation that Bangladesh’s per capita GDP will cross that of Pakistan very soon.
Source: World Bank
Bangladesh’s economic transformation owes much to grassroot social and economic empowerment of its female population. Leading NGO’s like Nobel Laureate Prof. Muhammad Yusuf-founded Grameen Bank, BRAC and the government have led the movement to sustain social change among women and giving them economic instruments to take decisions at the personal and public domains. Bangladesh’s average expectancy at 72 years has surpassed that of India – 68 years and Pakistan’s – 66 years. This is by any yardstick a phenomenal achievement. World Bank estimates that bank account holders are now making 34% transactions digitally  and only around 10% of bank accounts are dormant [no transactions in 2016]. These figures are better than South Asia’s average of around 27% digital transactions. India’s dormant bank accounts are around 48%.
Bangladesh has fought off the threat of mass starvation and is close to self-sufficiency in food production for its 170 million population. According to the World Bank, per capita income has reached USD 1750 and people loving below the poverty line [under USD 1.25 per day] has gone down to less than 9% of the population. Bangladesh will graduate out of its LDC status by 2024. While these are impressive figures, poverty and lack of jobs persist and remains push factors for Bangladeshis to look for work abroad, including in India, leading to illegal migration. Bangladesh’s large diaspora of around 2.5 million sends home USD 15-17 billion in remittances.
Another important economic driver of the Bangladesh’s economy is the garment manufacturing sector which contributes around 80% of the country’s exports. This sector has prospered because of favourable labour laws, large size of the manufacturing units and the overwhelming preponderance of female labour. Bangladesh’s garment sector has led in boosting exports by 15% in recent years and is set to hit the target of USD 40 billion by 2020. Pakistan’s exports by comparison was valued at around USD 25 billion. The 1947 Industrial Disputes Act, enacted a few months before independence, was inherited by India and Pakistan. The latter repealed it in 1958, freeing the economy from the restrictions of this Act which has deterred companies in India to increase employment. Bangladesh may have more favourable labour laws but has a considerable distance to travel to protect labour from occupational hazards at the workplace. Frequent breakout of fires at garment manufacturing units and other workplaces have exposed poor regulatory governance, corroded by corruption, nepotism and growing inequality.
Bangladesh is now giving a determined push to encourage manufacturing, IT and Pharmaceutical. It is in the process of implementing a network of 100 Special Economic Zones [SEZs]. Exports of software and IT services could exceed USD 1 billion. Export of bulk drugs and generics are also on the rise. There is growing confidence that Bangladesh will soon compete with India in these two sectors.
The Asian Development Bank (ADB) has designated Bangladesh as the fastest growing economy in the Asia-Pacific region, likely to achieve 8% GDP) growth for the current fiscal year, given the continuing positive trend in exports and public investments. Substantial progress in the infrastructure sector, particularly the Padma multi-purpose bridge, the Dhaka Metro projects and several Special Economic Zones [SEZs] opening up for investments have added momentum to the economy. On the negative side are ease of doing business, poor banking regulations and corruption.
Source: Asian Development Outlook, 2019
Bilateral ties have reached a high degree of maturity in the last decade. This has been possible because of political pragmatism and positive approach by PM Sheikh Hasina, after she formed the government in 2009. This has been fully reciprocated by India during the governments headed PM Manmohan Singh and PM Narendra Modi. PM Hasina’s strategic decision to eschew seeking leverage via support to anti-Indian insurgent groups, proved to be a decisive step. Handing over ULFA leaders to India and wiping out insurgent camps injected a much-needed fillip to bilateral trust and confidence. In Bangladesh too, there is a growing consensus that anti-Indian policies of the past were damaging bilateral ties and harming economic progress.
The previous BNP-JeI government, led by then PM Khaleda Zia, had taken its anti-India policy to such an extent that Bangladeshi intelligence agencies were collaborating with Pakistan, to supply weapons to anti-insurgent groups in India’s north-eastern states. This policy was supported by Tarique Zia whose collateral motive was to make money by hook or crook. Pro-Pakistan JeI Ministers were willing collaborators in this conspiracy. The intervention by the Army in early 2007 to restructure the Caretaker Administration set up by the Khaleda/Tarique Zia clique was a move welcomed by all. The Army-backed Caretaker Government subsequently organized a free and fair election. The Army’s intervention and the election organized thereafter, were necessary correctives for Bangladesh’s polity.
Currently, bilateral ties have expanded into sectors like Cyberspace and Energy. Bangladesh is now at the core of India’s “Neighbourhood Policy” and “Act East Policy”. Bangladesh has a key role in BBIN and BIMSTEC. As the largest trading partner of India in South Asia, Bangladesh is also a key player in connectivity projects that will link both countries seamlessly and bring in ASEAN countries into this connectivity paradigm in the near future.
The next phase in bilateral ties are becoming more granular as indicated by the following recent 4 agreements signed between the two countries:
- MoU between the Central Bureau of Investigation (CBI) of India and The Anti-Corruption Commission (ACC) of Bangladesh
- MoU between National Centre for Good Governance (NCGG), Mussoorie and Ministry of Public Administration (MOPA), Bangladesh on Training and Capacity building Programme for Bangladesh Civil Servants
- MoU on Co-operation in the field of Medicinal Plants between National Medicinal Plant Board (NMPB), Ministry of AYUSH and Directorate General of health Services, Ministry of Health & Family Welfare, Bangladesh
- MoU by and between Bangladesh Economic Zones Authority and Nidar Industrial Park Pune (Private) Limited, Hiranandani Group
Bangladesh’s exports to India are on track to hit USD 1 billion and India’s exports have reached USD 9 billion. These figures do not include the long tradition of informal trade which continues along the long and porous border. Items of daily necessity flow across the border, carried by people who do not have the resources of capacity to trade via the formal channel which is highly bureaucratized, ponderous and prone to corruption. Hence, both governments have recognized that people-centric arrangements like border Haats can mitigate trans-border informal trade. It must be said, however, that border Haats are a drop in the ocean, given the scale of informal trade. The sad reality is that informal trade with its well organize channels, no paper work and swift hawala payments can never compete with the highly bureaucratized formal trade channels.
Duty free and quota free entry of Bangladeshi products into India have helped in increasing exports. The next phase of joint effort should concentrate on a strategic upgrade of border infrastructure via which much of bilateral trade flows. Cost of trans-border business remains very high, with non-tariff barriers [NTBs] adding to other barriers. The BBIN Motor Vehicles Agreement is a concrete step towards transport integration. The SEZs for India will, hopefully, promote regional value chains and help Bangladeshi exports into India
The asymmetry in the economies of the two countries is the major factor in the trade imbalance. More Indian investment flows into Bangladesh have to be encouraged. There are good opportunities in the power and energy sectors as reflected in the 13 agreements worth around USD 10 billion signed by Indian companies with Bangladeshi entities. The USD 8 billion Lines of Credit and Grants from India have sought to balance the aspect of trade imbalance. This also helps in building the hard infrastructure like Railways, pipelines for delivery of petroleum products, power plants and also socially relevant projects like local medical clinics.
Future Cooperation and Challenges
Bangladesh’s geographical location makes it inevitable that its strategic policy choices will intersect with that of India’s. The government of Sheikh Hasina has made strategic choices that have given a huge boost to bilateral ties. As the two economies grow at a fast pace trade and economic linkages expand further, both countries will continue to hunger for investments. This is where China’s role in Bangladesh, can become a cause for concern. China is already the largest trading partner and defence hardware supplier of Bangladesh and the most important source of investment funds.
China’s strategic interest in both Bangladesh and Myanmar is to seek access to the Bay of Bengal. While it has succeeded in getting access to the Arabian Sea in the West, with the CPEC in Pakistan, it is in the process of securing access via Myanmar, via the economic corridor that connects China with the port of Kyaukpyu in Rakhine province, from where the Rohingyas fled into Bangladesh. China has been eyeing Chittagong, the biggest port in Bangladesh, also for the same reason. While India has opposed China’s BRI, PM Sheikh Hasina has welcomed the BRI and even said that India could join the BRI and benefit. She has also stated that BCIM should also not worry India.
Bangladesh has, however, navigated very carefully while playing the China card, by not getting into the debt trap diplomacy promoted by China in India’s neighbourhood and elsewhere in Africa. Bangladesh is clearly is playing the China card carefully, hoping to maximize benefits from both countries, without crossing strategic red lines that can vitiate bilateral ties with India. PM Hasina will, no doubt, leverage India’s anxiety regarding China to optimize benefits and concessions for Bangladesh. Bangladesh, like other India’s neighbours, seek to balance their asymmetric ties with India by cosying up with China which now has the capacity to lure governments and seduce the elite with hard cash.
China is already the major supplier of military hardware to Bangladesh and Pakistan. It would be better to seek a balance in the defence domain. Hence, quick utilization of the USD 500 million Indian Line of Credit for procurement of defence-related goods should be given high priority. River water sharing will remain a challenge that is unlikely to go away, given the increasingly bitter exchanges between the Central and State government leaders in the battle of the ballot.
While Bangladesh has taken effective steps against Islamic extremists, the Hasina government has also compromised on its secular credentials by extending concessions to Islamist organizations. The latter are increasingly demanding introduction of Sharia law, removing statues from public places, removing stories and chapters written by Hindus in school books. Bangladesh can slide into Islamic extremism if governance is weak. The Rohingya refugee issue and illegal migration from Bangladesh into India will continue to strain bilateral ties. Both sides should avoid knee-jerk measures that can sour ties. It is high time the issue of migration is inscribed into the bilateral agenda for discussion.
Given the challenges of Climate Change, bilateral cooperation on environmental issues must receive higher profile. The shared Sunderban region, recognized as a unique ecosystem is the obvious domain for such cooperation. Bangladesh has recently adopted the Delta Plan 2100 which seeks to implement long-term strategies that includes interventions for ensuring long term water and food security, economic growth and environmental sustainability, thereby reducing vulnerability to natural disasters and building resilience to climate.
[The author served as Secretary in the Ministry of External Affairs and is a former High Commissioner of India to Bangladesh]