Bangladesh: Yunus faces a rough terrain

Nobel Peace Prize-winning economist Muhammad Yunus has become the leader of Bangladesh's caretaker government on August 08, 2024 following weeks of turmoil that began when student-led protests rose up against the government and climaxed with the dramatic resignation of Prime Minister Sheikh Hasina.

As Yunus and the interim government have tough work ahead to quell social unrest, they also have to deal with mounting expectations for structural reforms and prepare for free and fair elections to be held sometime soon.

Who is this Nobel Prize winner, what sparked the rage that chased away Hasina and how are neighboring countries reacting?

Yunus is best known for his work with Grameen Bank, which traces its origins to small unsecured loans he began making to poor families in 1974. Hasina saw this champion of the underclass as a political threat, indicting him on what many saw as a long history of trumped-up charges.

Bangladesh was under the firm grip of Hasina until a few weeks ago. With her now out of the country, many citizens are waking up to a hopeful future for "a new Bangladesh" under the nonpartisan interim government headed by an 84-year-old economist, despite a series of economic challenges and the lingering effects of unrest.

Hasina enjoyed a good relationship with Indian Prime Minister Narendra Modi. But in the wake of her resignation and fleeing the country, uncertainty hangs over the two nations. As India's biggest South Asian trading partner, Bangladesh has received much investment from its neighbor, politically and financially

Hasina had recently signed a slew of economic, trade and public health agreements with China. With the countries also having elevated their relationship to a "comprehensive strategic cooperative partnership," how will Beijing find working with the next government?

For Yunus, who will lead the caretaker administration, the first and most urgent task will be to reestablish the rule of law.

However, the bigger and more difficult tasks will be to prevent interference of United States and continue to receive aid/ financial support from China and Russia.

Yunus has to quickly come up with a “home grown plan” to break the IMF shekels. The largest source of foreign exchange for Bangladesh is “textiles and clothing” and the major buyers are United States and members of European Union, who may opt for pressure tactics to keep Bangladesh away from China and Russia.