For the last few years, economically strained Bangladesh has been running from pillar to post to secure a multi-billion dollar package from the IMF and nations like China. However, the violent ouster of elected PM Sheikh Hasina has brought along aggravated challenges on the economic front.
Its economy which heavily relies on the textile industry has suffered a major hit. Since 5th August, its international buyers have opted for socially stable and reliable alternatives. Dhaka is struggling with its depleting dollar reserves, failing to foot its electricity bill and keep its economic activities afloat as imminent power cuts could further jeopardise its nosediving economy.
Amidst its struggling economy and worsening social situation, the newly propped-up governance body – the so-called Interim government – added insult to injury as it decided to burn its bridges with its reliable, and friendly neighbour India.
‘Interim govt’ turning Bangladesh hostile towards India, a nation that helped it gain Independence from Pakistan
The ‘Interim govt’ in Bangladesh has not just given a free pass to the Islamist elements in the country, it has allowed several dreaded terrorists to go scot-free. This includes Jashimuddin Rahmani, the chief of a terror group that plotted attacks on India, who was released from jail, raising security concerns for India. The development highlighted how the Interim government has posed political and security challenges to India.
Strikingly, while a substantive section of Bangladeshi society, predominantly members of Jihadi groups like the Jamaat-e-Islami, have been rabid Hindu and India haters, it was earlier reported that ‘external players’ were actively working to orchestrate and peddle smear campaigns against India to cast the latter as an “enemy nation”.
During the initial days of unrest, it came to light that Pakistani intelligence agency ISI, its stooges Jamaat-e-Islami was dehumanizing Bangladeshi Hindus painting them as ‘collaborators of Indian intelligence agencies’ to desensitize their supporters in attacking the Hindu community. The brutal purge of the Hindu community that intensified on 5th August, continues to date. While attacking or issuing threats to the Bangladeshi Hindu community, the Islamist groups in India had been asking them to display anti-India statements.
Conspicuously, the US which has been facing allegations of pulling a regime change operation in Bangladesh, also kick-started a toolkit to paint India in a negative light. The Western media which is a dominant player in the US ecosystem, falsely alleged that India caused the flash floods in Bangladesh, even when India had repeatedly busted falsehood on this issue.
Furthermore, several ‘advisers’ of the ‘Interim govt’ had been issuing veiled threats at India demanding that India should hand over Sheikh Hasina if it wants to have good diplomatic ties with Bangladesh. Additionally, in another sign of hostilities, the nation recently became a hosting venue for the “get-together” of Jihadi groups and fanatic members of terrorist outfits like Taliban, Hamas and radicals from Pakistan.
Meanwhile, the ‘Interim govt’ has adopted an apathetic attitude to the attacks on the Bengali Hindu community. It has unabashedly allowed radical elements to spew venom against India. It was earlier reported that painting India as an ‘enemy nation’, a Dhaka University professor called for the nuclearisation of Bangladesh ‘to deter India’. The controversial professor demanded that Bangladesh develop a Nuclear Treaty with Pakistan and also deploy Ghauri missiles on the India-Bangladesh border. Such elements have been allowed to go scot-free thus emboldening radical elements to foster anti-India hatred.
“We have to develop a Nuclear Treaty with Pakistan. Pakistan is the most reliable and trustworthy security ally of Bangladesh. This is exactly what the Indians don’t want us to believe.”
~ Professor Shahiduzzaman, Dhaka University while addressing military officers at a seminar pic.twitter.com/gfAeZrTJcj
— Fidato (@tequieremos) September 14, 2024
In another move by the ‘Interim govt’ to ‘distance’ and ‘delink’ Bangladesh from India, the Interim government has reportedly decided to reroute its apparel and textile market away from India. As per reports, the world’s second-largest garment producer has opted to bypass India and ship its textiles to global markets through the Maldives.
Nonetheless, Bangladesh – which was often cited as an economic success by Indian leftists and Islamists – is now eyeing prolonged blackouts, sparking a vicious cycle of economic downturn.
From Riches to Rages: Bangladesh’s economy nosedives since 5th August
Ever since the anarchic situations broke out in Bangladesh earlier this year in August, its textile industry has been one of the worst-hit sectors which was ironically the country’s growth engine. The textile industry contributes nearly 80 percent of its exports and 13 percent of its GDP.
As per reports, the country’s textile exports to the US, its largest export destination, fell 11% to $3.40 billion in January-June 2024. It was $3.82 billion in the same period last year. According to Bangladesh Bank, Bangladesh’s garment exports fell 4.34 percent to $44.47 billion in FY24.
While the Bangladeshi ‘Interim govt’ wants to hurt India, the violent flux in Bangladesh has benefitted Indian textile exporters. In the first 6 months of this Financial year, Garments exports from India have registered an 8.5% increase. Incidentally, it was down by 15% in the same period on a year-on-year basis. In September alone, India saw a 17.3% jump year-on-year in apparel exports.
Now, according to a Bangladesh media report, the anarchy-gripped nation is struggling to foot its electricity bills and it could soon face prolonged power cuts for non-payment of outstanding dues to Indian power companies. For those unversed, Bangladesh heavily relies on imported energy resources to meet its power demands. However, the high global energy prices have increased its import bills. With its depleting foreign currency reserves, it is failing to clear outstanding electricity dues which are running into several hundred million US dollars.
As per media reports, Bangladesh currently has outstanding dues of around 1 billion US dollars which it needs to pay to the Indian power distribution companies or it could suffer longer power cuts including blackouts in several areas across the nation.
Bangladeshi media outlet, The Daily Star reported this week that India’s Adani Power Jharkhand Limited has halved its power supply to Bangladesh for not paying $846 million.
According to the Power Grid Bangladesh PLC data, the plant now produces around 700MW from a single unit. However, the substantive 50% drop in power supply is not a random development as the APJL had earlier warned Bangladeshi officials of ‘remedial actions’ if they didn’t clear its dues by 30th October.
In the letter seen by The Daily Star, Adani wrote, “Otherwise APJL shall be constrained to take remedial action under the Power Purchase Agreement (PPA) by suspending power supply on October 31.”
The letter, dated 27th October, added, “As you [secretary] are aware, the deadline is approaching shortly and till date, PDB has neither provided LC for an amount of $170.03 million from Bangladesh Krishi Bank nor cleared the outstanding amount of $846 million.”
Speaking with The Daily Star, a PDB official claimed that they had cleared a portion of previous dues earlier, but since July, Adani has been charging more than the previous months.
He added that the PDB has been paying around $18 million weekly, while the charge is more than $22 million.
In a troubling sign of the failing economy, the Bangladeshi official added that they had submitted last week’s payment to Krishi Bank as well, but the bank failed to open a letter of credit against the payment due to a “dollar shortage”.
As Adani Power has halved its electricity supply to Bangladesh, energy-intensive industries like manufacturing and textile will take the major hit leading to a further depletion in the revenue source for Bangladesh.