It has been one year since the citizens of Bangladesh uprooted fascism and decided to embark on a journey of freedom, prosperity and growth. Albeit this was never an easy task. People from all walks of life, regardless of their social status, decided to walk out into the streets and stand in front of bullets, machetes, and APCs, simply with the hope that the Bangladesh that their future generation becomes a part of will have equal opportunities, no quotas, only talent shall be their sole qualification metric. However, isolated cases of vandalism soon turned into “mobocracy” leaving citizens at the perils of a broken legal justice system.
The United States Commission on International Religious Freedom (USCIRF) earlier stated in its report in July that "tensions and religious freedom concerns still persist". Even with all the constant barrage of protests, conspiracies, and sheer disdain, the Chief Adviser GOB Muhammad Yunus and members of his interim government have tried their best to ensure a smooth transition towards a more open and democratic future. The Chief Adviser’s declaration of the July charter has therefore managed to revive the spirits of everyone political or apolitical regarding this transition. A key component that has been the center point of all these issues have been around “reforms”.
Fifteen high-level reform commissions were formed-covering the electoral system, anti-corruption, constitutional law, police, judiciary, public administration, and more-to lay the groundwork for systemic change. Reports from most commissions were submitted in early 2025, including a proposal to establish a National Constitutional Council to oversee institutional checks and balances. Combining this with the strengthening of the election commission and administrative reforms such as dissolving corrupt boards, replacing top mayors and administrators across different upazilas and constituencies, mandated property disclosures, and promoted merit based appointments across civil service shows the interim government’s commitment towards nation building, and hopefully this is the start of a political culture that will seek to carry forward the commitments “a government” makes and not simply honoring the word from “the supreme leader”.
The culture of vengeance needs to be eliminated, and as such, bodies such as the Anti-Corruption Commission (ACC) backed by Transparency International Bangladesh, is developing policy proposals to tackle systemic corruption and recover laundered assets-including legislation to pursue billions allegedly siphoned overseas. These government bodies shall be responsible for handling the actual case in hand and not simply be treated as a “puppet” for the current government, if things were to ever approach south for innocent party members once they are no longer in the parliament or any government body.
The reason for being hopeful for all of the above is demonstrated by the long, daily meetings at the Foreign Service Academy, where political leaders from major political parties, in particular the largest opposition party the Bangladesh Nationalist Party-BNP participated in month-long debates regarding the implementation of these policies. They resolved many of the issues with regards to the constitution simply through dialogue, a phenomenon that was largely unknown in the Bangladeshi political landscape.
Managing headline inflation which was in the double-digit territory and is now slightly north of 8%, has been a major challenge. Although the opening of new Letters of Credit/ LCs are severely restricted, rising foreign exchange reserves show that the trust of the average individual on the banking system has somewhat returned, with labor remittance inflows and strong foreign investment prospects—including moves toward ASEAN membership, new ties with China, UAE, and Malaysia, and re-opening of migrant worker pathways.
Excluding all of the above, the provisions around the digital security act, have been reviewed, whereby people are now mostly free to express their opinions without fear, but many claim it’s a false rhetoric since hundreds of people, including 266 journalists have been a victim of numerous fabricated charges, according to a recent Daily Star report. According to Human Rights Watch, between August 6 and September 25, 2024, 92,486 cases have been lodged against people, most of them affiliated with the previous regime, with regards to various activities including murder, extortion, and more.
However, while there has been an upgrade for remittance warriors and other expatriates in the country’s primary airport there are critics who are vocal about the sheer volume of visa rejections most Bangladeshis are facing around the world, and a considerable portion of the business community who are still skeptical of the US reciprocal tariff situation.
Bangladesh has secured a 20% tariff level, down from 35%, via a negotiated agreement similar to Vietnam and Pakistan, according to Reuters. It has also signed wheat import deals and pledged greater U.S. agricultural purchases, aiming to reduce the bilateral trade deficit and negotiate favorable terms.
While further efforts are needed for trade negotiation capacity, including pursuing GSP plus status or bilateral frameworks with the U.S, we need to be mindful of our primary weakness which is centered around our export basket. More than 80% of Bangladesh’s exports are RMG and textile oriented. While the business fraternity is worried about increased competition, India is also facing 35% overall tariffs up from 10% earlier with potentially more tariffs on the way, the latest being an added 25% for purchasing Russian Oil during the Russia-Ukraine war earlier in 2021-2023.
Indonesia, Cambodia, and Pakistan have also been hit with 19% tariffs, while Vietnam and China have received 20% and 30% additional tariffs. While tariffs will make it difficult for the Bangladeshi RMG industrialists to compete in the US market, the primary competitors have also been equally hit. As a result, the end consumer will end up paying more or less the same amount as they had been previously paying when adjusted for current prices.
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Bangladesh has a clear advantage in that we have more than 150 LEED factories and our average monthly labor cost still remains as one of the cheapest overall in comparison to our peers mentioned above. In addition to that, if we had to make another distinction, it will be based on overall trade volume. Bangladesh exported roughly $7.5 billion to the US last year whereas; Vietnam exported slightly more than $12 billion. But in retrospect, the US market accounts for 18% of Bangladesh’s RMG exports, whereas in contrast, Vietnam’s garment and textile exports reached around $37 billion in 2024, with its total exports across all sectors exceeded $200 billion (including electronics ~$72.6 billion). Vietnam has a more diversified export basket with strong electronics and manufactured goods sectors, and if the tariff situation gets worse, Vietnam will look to expand on its other trade channels as opposed to its textile and RMG.
Similarly, many other countries will follow suit, and that might be Bangladesh’s chance to grab a bigger share of the total US RMG market. While Bangladesh does have a weakness in terms of an undiversified export basket, further tariffs on other countries might prove to be a blessing in disguise for the Bangladeshi textile industry.
Given the overall agreement between the interim government and major political parties, on reforms, election roadmap, strengthening overall internal party frameworks all while keeping the civil society in mind, the interim government has so far managed to keep the worse at bay. What will be interesting is whether these policies along with the law & order situation stay in check as we approach the national elections in February 2026.
Writer : Sayeed Ibrahim Ahmed
A former investment analyst, Sayeed Ibrahim Ahmed is currently an Assistant Professor of Finance at American International University Bangladesh (AIUB), pursuing research along the lines of capital markets and economic policy.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of Bangladesh Times.
