Dhaka Tribune: What do you consider the most critical pressures facing the interim government?
Kugelman: The biggest pressure point is the general public. It supports the interim government, but that support could have a short shelf life: The public will grow more impatient if the government struggles to stabilize the economy and make progress on the reforms front. The fact that the government still hasn't given a timeframe for elections ensures that the public will remain uneasy. So, we can talk about critical pressures in a policy sense—the sputtering economy, a volatile law and order situation, the need to show progress on reforms and so on—but given that the government is unelected and lacks a public mandate, the biggest pressure point will be the populace.
Do you anticipate any changes in US policy towards Bangladesh if Donald Trump wins the elections?
I don't think Trump would support the current framing of the relationship, which revolves around cooperation on delivering US assistance to Bangladesh to help it rebuild and stabilize.
A Trump administration would want to focus the relationship around the issues that drove the partnership when Trump was president the last time—trade and great power competition. However, Bangladesh's economic struggles and the interim government's likely desire to move closer to China could pose obstacles. If there is a Trump victory, Dhaka would have its work cut out for it trying to ensure the relationship doesn't take a turn for the worse—an outcome that Dhaka can't afford, given the importance of the US as a donor and trade destination.
How significant do you view the recent GDP growth decline from 6.9% to 3.9% in Bangladesh, and what are the potential long-term implications for the economy?
Quite significant. That decline refers to a period earlier this year, before the mass protests and large-scale violence of this summer. One can expect that the growth figures could dip even more over the remainder of this year, given the impact that the large-scale violence this summer—which led many businesses to shutter operations—and a long internet shutdown during the crisis had on the economy.
The Bangladesh growth story, successful though it has been, has yielded to a very different economic reality over the last few years. Perhaps it's the natural consequence of certain vulnerabilities that hadn't been properly addressed—from the lack of a more diverse export base, to an inability to attract more foreign direct investment. External economic shocks, especially from COVID and the Ukraine war, have made things even worse. And the internal shock provoked by the mass movement and abrupt political change has made the economic environment even more precarious. In that regard, the recent growth figures reflect a worsening economic trajectory.
In your opinion, what steps should be prioritized to stabilize the economy and ensure progress in reforms, given the high expectations from the public?
Inflation has to be brought under control, and to its credit the government is applying a laser-like focus, with recent plans to raise interest rates. Bringing prices down will produce the type of economic relief that could ease public pressure on the government, or at least give it some breathing room.
The reform front is tougher, especially as it's unclear what the government's end game is. At a minimum, in the immediate term, it's important to show the public that the government has a plan beyond simply forming commissions to talk about what to do.
What challenges do you think the interim government faces in balancing reform and democratization while managing public expectations?
Yunus and his advisers are well aware of the balancing act of taking time to implement reforms while also being mindful of the public's desire for elections. A prudent path forward would involve identifying specific objectives to achieve on the reforms front; developing ways to measure if those objectives are being achieved; and agreeing on a timeframe to start preparing for elections. This way, you give yourself time to achieve some successes on the reforms front, but you also commit to a formal political transition to avoid antagonizing a restless public.
What strategies could the interim government employ to rebuild public trust and confidence?
I think it's less an issue of rebuilding trust and confidence and more one of retaining those two things. The country turned against Hasina during her final days in power, and it has rallied around the new interim government—but, to amplify a critical point, that support is not open-ended.
This is why it's important for the government to be able to show some meaningful progress that the public can feel on direct levels—bringing down inflation, stabilizing law and order, reducing the scope of corruption in public institutions, and so on. But the government must also do this while making clear to the public that it understands the importance of holding elections and continuing with a political transition.
There are steps that can be taken to restore broader public trust, such as reforming institutions and bringing down corruption everywhere. But these are longer term outcomes—they can't materialize overnight—and the public may not have the patience to see them through.
How can the interim government effectively navigate the tensions within the political landscape, particularly with the Awami League and other opposition groups?
The interim government could set a healthy precedent by holding back from retributive politics, and refraining from bans and other draconian measures against the AL and its allies. By all means it should carry out legal actions against those involved in the brutal violence this summer and others suspected of crimes over the years during AL rule.
But by waging war on its critics, including innocents, the interim government would further poison the political environment and complicate efforts to restore stability and democracy—the very outcomes that the interim government claims are so important to achieve.
With the increasing number of Rohingya refugees entering Bangladesh, how should the interim government address this humanitarian crisis while also focusing on domestic stability?
This is yet another difficult challenge for the interim government—an administration, it should be noted, that has many sharp and accomplished people leading it, but completely lacks executive governing experience.
The core goal should be ensuring that foreign donors continue to provide assistance for the Rohingya—an objective that's not as easy as it may seem, given competing humanitarian crises around the world and donor fatigue risks.
The interim government will also need to take measures to ensure that security remains in place on the border with Myanmar. This is also not an easy task, given that as the war has gotten worse in Myanmar, the junta in Myanmar no longer has as much control over border areas. That means that if the interim government holds talks with the junta on border security, there's no guarantee that the junta would be able to follow through on any assurances it gives to Dhaka.
