Bangladesh on 'EU watchlist', overwhelming support for interim govt wanes: ICG

Highlights: 

• EU Watchlist identifies where European Union, its member states can enhance prospects for peace
• ICG says "overwhelming support" for interim govt has waned
• New challenges, such as opposition, student leaders, Islamist groups likely to grow
• Ongoing efforts to fix economic problems will take time to show results
• EU can support democratic transition
• Interim govt can hold elections to usher in new era in Bangladesh politics
• EU can help in asset recovery
• Dhaka can be encouraged not to fan anti-India sentiment

The honeymoon period for Bangladesh's interim government is now well and truly over with political challenges likely to increase this year as political parties and other key players negotiate over reforms and jockey for electoral advantage, the International Crisis Group (ICG) has said. 

In its latest Watch List, published today (30 January), Bangladesh found its name alongside Moldova, Colombia, North Korea, Sudan, the Great Lakes, Ukraine, Syria, Israel-Palestine and Iran. 

Each year, ICG publishes an "EU Watchlist", identifying where the European Union and its member states can enhance prospects for peace.

"The overwhelming support that the interim government enjoyed in  the immediate aftermath of Hasina's downfall  has begun to wane, and Yunus is now facing  pressure to deliver concrete results. His government has not only struggled to contain rifts with  other political forces, but it is also facing public  criticism over its day-to-day management," the report said. 

The report, titled "Bangladesh: The Dilemmas of a Democratic Transition", also pointed out that the challenges were likely to grow in the coming year as "opposition parties, student leaders,  Islamist groups and other key players jockey for electoral advantage." 

It also pointed out the strained relations with neighbour India, which "staunchly backed Hasina's regime until the very  end" and presents "a further hurdle to maintaining  stability." 

"Meanwhile, the interim government is  also saddled with the responsibility of managing over a million Rohingya refugees, as well as  dealing with instability along the border with  war-torn Myanmar," it said.  

Crisis Group's Senior Consultant on Myanmar and Bangladesh Thomas Kean said, "The interim government is also under pressure over rising prices – a legacy of former prime minister Sheikh Hasina's mismanagement – and it will be some time before the Bangladeshi people really see the benefits of ongoing efforts to get the economy back on track. Relations with India remain strained, and there is little prospect of Rohingya refugees returning to war-torn Myanmar any time soon."

He, however, also struck an optimistic note on reforms.

"Nevertheless, over the next year Bangladesh has a rare opportunity to reshape its national political system and render it more inclusive and accountable. Reform commissions have started reporting back with hundreds of proposals to this end."

On the issue of polls, he said foreign partners had an important role to play – rhetorically, technically and financially – in supporting the reform process and ensuring the interim government is able to steer Bangladesh through to a national election. 

"For the EU specifically, Bangladesh presents an opportunity to support a democratic transition and improve its standing with an important trade partner in a region of critical geopolitical importance," Kean added.

Earlier in August, Crisis Group released a report saying Bangladesh was entering a political uncertainty. 

Elections in spotlight

The country now has the chance to move beyond the hyper-partisan, winner-take-all electoral dynamics that have caused so much damage to Bangladeshi politics over the past three decades, Kean said at the time.

In the excerpt from the Watch List 2025, Crisis Group highlighted actions the EU and its member states can take to support the country's democratic transition.

Led by Nobel laureate Prof Muhammad Yunus, the government and its supporters hope the vote will not just restore democracy but also herald a new era in Bangladeshi politics after fifteen years of increasingly autocratic and repressive rule.

The European Union (EU) member states should actively help the Bangladeshi government recover the numerous assets acquired illegally by those who were part of or close to the Hasina regime, said the Crisis Group, adding that many of these assets are in Europe.

EU can encourage Dhaka to not fan anti-India sentiment

Improving the relationship between Bangladesh and India should also be a priority for the EU, said the Crisis Group.

It said European diplomats should emphasise to New Delhi that remaining wedded to the AL is no longer a viable strategy, adding that its perceived failure to support the interim government is only stoking anti-India sentiment within the country and is detrimental to its long-term interests.

In parallel, it should encourage Dhaka not to fan anti-Indian sentiment and to take further steps to address legitimate Indian concerns, such as by offering assurances that it will meet all its legal obligations related to bilateral projects initiated under Hasina.

Dhaka can step up engagement with Arakan Army

The ICG said the EU and its member states should strive to maintain their support for the humanitarian response to the Rohingya refugee crisis.

International funding has been declining in recent years, with the UN's 2024 response plan just 56 per cent funded.

While the EU remains one of the largest donors, some European countries have cut back assistance.

The trend risks accelerating, given the strong probability that the Trump administration will slash the US aid budget, making European funding all the more important.

Similarly, the Crisis Group said, the US is expected to reduce the number of refugees it accepts for resettlement every year; the EU's member states should strive to resettle more Rohingya.

That said, even in the best-case scenario the vast majority of Rohingya refugees will remain in the sprawling camps that host them in southern Bangladesh for the foreseeable future – and, as mentioned earlier, more could cross over from Myanmar as conflict rages across the border.

The EU should work with Dhaka to adopt policies that foster refugee self-reliance and minimise the costs of delivering vital services, support Bangladesh's efforts to convene a high-level Rohingya conference later in 2025 and encourage Dhaka to step up its engagement with the Arakan Army, which is now an inescapable interlocutor for any repatriation plans, said the ICG.

'ICG's observations highlight need for political stability in Bangladesh'

Dr Shahab Enam Khan, a professor at the Department of International Relations at Jahangirnagar University, expressed concerns about the current political climate in Bangladesh.

Talking to The Business Standard, he said, "The honeymoon period is over. There is no denial about it. This is a hard political truth. The government hasn't been able to clearly outline the political process. They have been discussing reforms, but the integration of political parties is largely missing."

He emphasised the deteriorating law and order situation, stating, "This will certainly put the government into a deep crisis. Therefore, the ICG's observations and the need to address various forms of violence cannot be ignored. The sooner Bangladesh returns to a political process, the better the stability will be."

Khan further stressed the importance of implementing the reform agenda alongside a return to politics, asserting, "So, I think the ICG report should be taken into consideration. The government should act swiftly, which means arranging for an election as soon as possible."