By Sudipto Ganguly and Ruma Paul
DHAKA (Reuters) – Stabilising a fractious political landscape and fixing an economy still reeling from the ripple effects of the Russia-Ukraine war should top Prime Minister Sheikh Hasina’s agenda for her next five-year term, analysts said on Monday.
Hasina, 76, secured a fourth straight term as expected with her party winning almost 75% of seats in Sunday’s general election amid low turnout in the vote boycotted by the main opposition Bangladesh Nationalist Party (BNP).
During her 15 years in power, Hasina has been credited with turning around the economy and the country’s massive garments industry, though critics have also accused her of human rights violations, and suppressing free speech and dissent.
Improving the economy would, again, be the main aim for the next five years, Hasina said on Monday.
Canberra-based economist Jyoti Rahman said, however, the next term could be harder than ever, given how economic and political conditions have changed.
The war in Ukraine set off a rally in global energy and food prices that sharply boosted Bangladesh’s import costs, blowing a hole in its currency reserves and triggering a cost-of-living crisis that sparked violent protests in the months leading to the election.
“She didn’t face this level of dissent, this level of concerted opposition to her rule before the pandemic, because the economic conditions were different,” Rahman said.
He said, if cost of living pressures continued they could create a vicious circle of more labour unrest, which would deter investment, which in turn could hurt Bangladesh’s exports, weakening its currency and leading to even higher prices.
Debapriya Bhattacharya, a macro-economist and public policy analyst, said bringing down inflation, which ran at 9.5% in November, was paramount for the government ahead of the budget for next fiscal year, which starts in July.
“Inflation is almost 10% and it is affecting not only the urban middle class but also the rural poor,” he said.
However, securing more funding in addition to a $4.7 billion bailout agreed with the International Monetary Fund last year, was the most pressing task, Bhattacharya said.
“Over and above that is our outstanding external dues,” he said. “The government will need access to budgetary support measures, beyond the IMF, from World Bank and Asian Development Bank to finance outstanding import dues.”
While analysts say economic reforms are urgently needed they also stress that before Hasina’s government can proceed, the ruling party and the opposition need to reach some form of an understanding to end the political unrest.
Shakil Ahmed, assistant professor at Jahangirnagar University in Dhaka, warned that the election, in which a large part of the electorate did not participate, in itself will not put an end to violence.
“This election is not the answer,” he said. “We may see in the coming days the continuation of street violence as a form of confrontational politics,” Ahmed said, adding that political settlement was essential for peace and prosperity of Bangladesh.
(Additional reporting by Sam Jahan in Dhaka and Xiao Xu in Singapore; Editing by Tomasz Janowski)
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