Thursday, 10 July, 2025
Bangladesh’s interim government has embarked on a delicate political journey. Last Friday the National Consensus Commission – chaired by Prof. Ali Riaz – held a dialogue with the Jatiyatabadi Samamona Jote (the BNP-led alliance) to begin crafting a National Charter for restoring democracy. Prof. Riaz told the meeting that the charter’s goal is to “fully restore democracy in Bangladesh,” reached by broad consensus. He urged all sides to “compromise from their respective positions” in the interests of national unity and reconstruction. Riaz noted that the July 2024 student-led uprising “laid the foundation of the national unity, which is essential for the country’s progress”, and he appealed to parties to “come together” on the fundamentals of state-building.
The message delivered by Prof. Ali Riaz, however, was echoed by Samamona Jote leaders: coalition coordinator Fariduzzaman Farhad reported that their 166-point submissions to the commission were largely accepted (112 agreed, 26 disagreed) and he warned that “an unelected government” overstaying its welcome “creates various problems.” Farhad bluntly urged the Chief Adviser to “ensure an election where people can say, after 15 long years, we have finally witnessed a real vote.” In other words, the people must feel they have “re-established their voting rights and formed a government of their choice”. This intense dialogue – along with talks held since February with all major parties – underscores a rare spirit of compromise. The Commission’s mission, as Riaz put it, is to find “common ground” on core issues of governance and accountability, a mission born of the unity forged by last summer’s uprising.
The July uprising itself was not just about quotas – it was a broader demand for rights and accountability, the right to choose leaders without fear. Today’s interim government can take heart from the fact that citizens have shown they will rise for democracy.
These political efforts come amid a sharp economic downturn that makes timely reform urgent. Inflation has been stubbornly high – above 9 percent for well over two years – and in 2024 it averaged nearly 10 percent. Prices spiked around July 2024 and have since ebbed only slightly, but remain entrenched. For example, the Bangladesh Bureau of Statistics reports that consumer inflation has stayed “over 9 percent since March of 2023,” hitting 9.35 percent in March 2025. Food prices, the largest expense for the poor, have been even more punishing: food inflation topped 14% in July 2024 – the highest in over a decade – and though it later eased, food costs remain above 10 percent. As a result, the poorest households are hardest hit. A recent study notes that chronic price pressures have “worsened the situation of poor people,” even as public food-distribution under social programs fell by over 7% year-on-year through FY25. In short, basic staples are pricier than they have been for years, eroding rural and urban living standards. Remarkably, Bangladesh now endures one of the highest inflation rates in South Asia.
The external and fiscal accounts have also been under strain. A World Bank update reports that the current‐account deficit narrowed to about $6.5 billion (FY2024), thanks to plunging imports and a rebound in remittances. Worker remittances have indeed recovered: official data show that by April 2025, remittances reached $24.4 billion (up 2% from FY2023-24), providing a welcome cushion for foreign reserves. But the Bank warns that “pressure on the external sector is expected to persist,” and that balance-of-payments fragility remains. Domestically, the government is running a large deficit. The fiscal gap eased only marginally – around 4.5% of GDP in FY2024 – and the authorities are aiming for just 4.3% in FY2025. Public investment has slowed (ADP implementation fell to 81% of plan in FY24), reflecting both capacity and financing constraints.
In this tough environment, economic growth is faltering. After a post-pandemic rebound, GDP growth has slowed to just 5.2% in FY2024, with forecasts around 4% for FY2025. That is the weakest pace since 2020, and well below the 7%-plus rates of the past decade. The World Bank now projects that about 3 million more people will slip into extreme poverty this year, lifting the extreme-poverty rate from 7.7% in 2023 to roughly 9.3% by FY2025. Inequality is rising, and jobs are scarce. In short, Bangladesh is confronting a severe economic squeeze even as it undertakes this grand political project.
Given these challenges, credible elections are needed urgently to restore confidence in governance and unlock long-term solutions. The July uprising itself was not just about quotas – it was a broader demand for rights and accountability, the right to choose leaders without fear. Today’s interim government can take heart from the fact that citizens have shown they will rise for democracy. Prof. Riaz and other leaders have repeatedly stressed that new elections should be held within a set timeframe. As Farhad put it to the Chief Adviser, the public must be able to declare that after “15 long years” they have finally had a “real vote”. Only timely, free and fair elections – with all major parties participating – can lend political legitimacy to future policies. Legitimate leadership will in turn make it easier to carry out the difficult fiscal and structural reforms that the World Bank and others say are urgently needed.
A democratic mandate would itself help stability. History shows that elected governments in Bangladesh enjoy greater public legitimacy to make tough choices. Free, credible polls would revive public confidence in government and markets, enabling the very investments – in infrastructure, education, and health – that will reignite growth.
Specifically, the interim government should now commit to clear, enforceable steps: 1) Schedule genuinely competitive elections under impartial supervision, so that all voters can choose their leaders. 2) Strengthen institutional transparency, especially around the Election Commission and media freedom, to build trust. 3) Pursue prudent macroeconomic management: rebuild reserves, maintain a flexible exchange rate, and tame inflation through monetary and fiscal discipline. 4) Expand social protections to shield the vulnerable during adjustment – for example, by widening targeted food support and other safety nets. 5) Improve coordination among institutions (finance, planning, monetary and social agencies) to ensure reforms are mutually reinforcing. In short, democracy and economic reform must go hand in hand.
A democratic mandate would itself help stability. History shows that elected governments in Bangladesh enjoy greater public legitimacy to make tough choices. Free, credible polls would revive public confidence in government and markets, enabling the very investments – in infrastructure, education, and health – that will reignite growth. The National Consensus Commission is correct that the problems of state-building ultimately require parties to give ground to the national interest. What it does not require is continued uncertainty. Bangladesh has a proud record of high growth and poverty reduction, but that record depends on stable, representative government. The dramatic events of July 2024 remind us that the people will not tolerate exclusion or stagnation: they reclaimed their voice through protest. Now their voice should count in elections. Politics can no longer be a drag on the economy. Only by holding the promised elections and embracing transparent reform can Bangladesh renew its development momentum.
It is in this spirit of unity and responsibility – as underscored by Prof. Riaz and others – that the country must press ahead. The Commission’s mission, after all, is to rebuild a democratic and accountable governance system. That mission cannot be detached from economic reality. Ultimately, Bangladesh’s growth and stability depend on mutually reinforcing progress in both politics and economics. A credible, timely election will restore the people’s faith in governance, unleashing consensus for the reforms necessary to tame inflation, rebuild reserves, and sustain growth. The masses have demanded and are entitled to a say in their future. The time to deliver on that promise – with necessary reform in hand – is now.
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Bangladesh’s interim government has embarked on a delicate political journey. Last Friday the National Consensus Commission – chaired by Prof. Ali Riaz – held a dialogue with the Jatiyatabadi Samamona Jote (the BNP-led alliance) to begin crafting a National Charter for restoring democracy. Prof. Riaz told the meeting that the charter’s goal is to “fully restore democracy in Bangladesh,” reached by broad consensus. He urged all sides to “compromise from their respective positions” in the interests of national unity and reconstruction. Riaz noted that the July 2024 student-led uprising “laid the foundation of the national unity, which is essential for the country’s progress”, and he appealed to parties to “come together” on the fundamentals of state-building.
The message delivered by Prof. Ali Riaz, however, was echoed by Samamona Jote leaders: coalition coordinator Fariduzzaman Farhad reported that their 166-point submissions to the commission were largely accepted (112 agreed, 26 disagreed) and he warned that “an unelected government” overstaying its welcome “creates various problems.” Farhad bluntly urged the Chief Adviser to “ensure an election where people can say, after 15 long years, we have finally witnessed a real vote.” In other words, the people must feel they have “re-established their voting rights and formed a government of their choice”. This intense dialogue – along with talks held since February with all major parties – underscores a rare spirit of compromise. The Commission’s mission, as Riaz put it, is to find “common ground” on core issues of governance and accountability, a mission born of the unity forged by last summer’s uprising.
The July uprising itself was not just about quotas – it was a broader demand for rights and accountability, the right to choose leaders without fear. Today’s interim government can take heart from the fact that citizens have shown they will rise for democracy.
These political efforts come amid a sharp economic downturn that makes timely reform urgent. Inflation has been stubbornly high – above 9 percent for well over two years – and in 2024 it averaged nearly 10 percent. Prices spiked around July 2024 and have since ebbed only slightly, but remain entrenched. For example, the Bangladesh Bureau of Statistics reports that consumer inflation has stayed “over 9 percent since March of 2023,” hitting 9.35 percent in March 2025. Food prices, the largest expense for the poor, have been even more punishing: food inflation topped 14% in July 2024 – the highest in over a decade – and though it later eased, food costs remain above 10 percent. As a result, the poorest households are hardest hit. A recent study notes that chronic price pressures have “worsened the situation of poor people,” even as public food-distribution under social programs fell by over 7% year-on-year through FY25. In short, basic staples are pricier than they have been for years, eroding rural and urban living standards. Remarkably, Bangladesh now endures one of the highest inflation rates in South Asia.
The external and fiscal accounts have also been under strain. A World Bank update reports that the current‐account deficit narrowed to about $6.5 billion (FY2024), thanks to plunging imports and a rebound in remittances. Worker remittances have indeed recovered: official data show that by April 2025, remittances reached $24.4 billion (up 2% from FY2023-24), providing a welcome cushion for foreign reserves. But the Bank warns that “pressure on the external sector is expected to persist,” and that balance-of-payments fragility remains. Domestically, the government is running a large deficit. The fiscal gap eased only marginally – around 4.5% of GDP in FY2024 – and the authorities are aiming for just 4.3% in FY2025. Public investment has slowed (ADP implementation fell to 81% of plan in FY24), reflecting both capacity and financing constraints.
In this tough environment, economic growth is faltering. After a post-pandemic rebound, GDP growth has slowed to just 5.2% in FY2024, with forecasts around 4% for FY2025. That is the weakest pace since 2020, and well below the 7%-plus rates of the past decade. The World Bank now projects that about 3 million more people will slip into extreme poverty this year, lifting the extreme-poverty rate from 7.7% in 2023 to roughly 9.3% by FY2025. Inequality is rising, and jobs are scarce. In short, Bangladesh is confronting a severe economic squeeze even as it undertakes this grand political project.
Given these challenges, credible elections are needed urgently to restore confidence in governance and unlock long-term solutions. The July uprising itself was not just about quotas – it was a broader demand for rights and accountability, the right to choose leaders without fear. Today’s interim government can take heart from the fact that citizens have shown they will rise for democracy. Prof. Riaz and other leaders have repeatedly stressed that new elections should be held within a set timeframe. As Farhad put it to the Chief Adviser, the public must be able to declare that after “15 long years” they have finally had a “real vote”. Only timely, free and fair elections – with all major parties participating – can lend political legitimacy to future policies. Legitimate leadership will in turn make it easier to carry out the difficult fiscal and structural reforms that the World Bank and others say are urgently needed.
A democratic mandate would itself help stability. History shows that elected governments in Bangladesh enjoy greater public legitimacy to make tough choices. Free, credible polls would revive public confidence in government and markets, enabling the very investments – in infrastructure, education, and health – that will reignite growth.
Specifically, the interim government should now commit to clear, enforceable steps: 1) Schedule genuinely competitive elections under impartial supervision, so that all voters can choose their leaders. 2) Strengthen institutional transparency, especially around the Election Commission and media freedom, to build trust. 3) Pursue prudent macroeconomic management: rebuild reserves, maintain a flexible exchange rate, and tame inflation through monetary and fiscal discipline. 4) Expand social protections to shield the vulnerable during adjustment – for example, by widening targeted food support and other safety nets. 5) Improve coordination among institutions (finance, planning, monetary and social agencies) to ensure reforms are mutually reinforcing. In short, democracy and economic reform must go hand in hand.
A democratic mandate would itself help stability. History shows that elected governments in Bangladesh enjoy greater public legitimacy to make tough choices. Free, credible polls would revive public confidence in government and markets, enabling the very investments – in infrastructure, education, and health – that will reignite growth. The National Consensus Commission is correct that the problems of state-building ultimately require parties to give ground to the national interest. What it does not require is continued uncertainty. Bangladesh has a proud record of high growth and poverty reduction, but that record depends on stable, representative government. The dramatic events of July 2024 remind us that the people will not tolerate exclusion or stagnation: they reclaimed their voice through protest. Now their voice should count in elections. Politics can no longer be a drag on the economy. Only by holding the promised elections and embracing transparent reform can Bangladesh renew its development momentum.
It is in this spirit of unity and responsibility – as underscored by Prof. Riaz and others – that the country must press ahead. The Commission’s mission, after all, is to rebuild a democratic and accountable governance system. That mission cannot be detached from economic reality. Ultimately, Bangladesh’s growth and stability depend on mutually reinforcing progress in both politics and economics. A credible, timely election will restore the people’s faith in governance, unleashing consensus for the reforms necessary to tame inflation, rebuild reserves, and sustain growth. The masses have demanded and are entitled to a say in their future. The time to deliver on that promise – with necessary reform in hand – is now.
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