The new Government’s first test: Stability and Credibility

When a new government assumes office following a national election, public expectations extend well beyond a mere transfer of power.

Citizens look for a tangible shift in the nature of governance, policy priorities, and the philosophical direction of state management. In the present context—where the economy faces multidimensional pressures, inflation persists, confidence in the banking sector is fragile, foreign exchange reserves are strained, inequalities in healthcare and education are pronounced, and administrative efficiency is under scrutiny—the first 120 days become a critical period for policy reset. While this timeframe may not resolve every systemic challenge, it can signal the government's direction, priorities, and the degree of inclusiveness and responsibility embedded in its governing philosophy.

Restoring economic stability must be the foremost priority, as no reform can be sustained without it. Controlling inflation cannot rely solely on market monitoring or mobile court interventions. What is required is a coordinated economic stabilisation framework, with effective synchronisation among the Ministry of Finance, Bangladesh Bank, the Ministry of Commerce, and the agriculture sector. Structural weaknesses across essential commodity supply chains—from import stages to retail distribution—must be identified through data-driven analysis.

Temporary tariff and VAT adjustments, targeted agricultural incentives, improved storage infrastructure, and focused subsidy programmes can help reduce inflationary pressure. Simultaneously, a contractionary yet balanced monetary policy would restore liquidity discipline. Interest rate policy must strike an equilibrium—containing inflation while supporting investment. Targeted interest reduction programmes for small and medium-sized enterprises could also help generate employment and strengthen economic resilience.

Restoring confidence in the banking and financial sector will be one of the greatest tests for the new administration. Non-performing loans, weak regulatory oversight, and inadequate corporate governance have long exposed the sector to systemic risk. Establishing an independent Banking Reform Commission within the first 120 days—tasked with publishing a credible assessment of default loans, ensuring politically neutral board formation, and strengthening risk-based supervision—would send a positive signal to domestic and international investors.

Introducing refinancing schemes for SMEs and start-ups could accelerate employment generation. An economy is not merely a reflection of GDP growth; it is built on confidence. Rebuilding that confidence is now the central challenge.

Tax reform is equally essential. Increasing taxation on luxury goods while reducing the tax burden on essential commodities, fully digitising tax administration, and expanding the tax net would enhance revenue mobilisation while reducing taxpayer harassment. Automation and round-the-clock operations in port management would strengthen Bangladesh's position within global supply chains and improve export competitiveness. Low-interest refinancing for production-oriented industries, combined with simplified logistics support, could accelerate industrialisation.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has historically played a key role in policy dialogue. However, if the business community views its representation as questionable or its democratic processes as weak, the resulting uncertainty can undermine economic confidence. Conducting free, transparent, and competitive elections across the FBCCI and major trade bodies within the first 120 days would serve not only as organisational reform, but also as a powerful message to investors. Strong public–private dialogue platforms also reassure markets about policy continuity and the stability of the business environment.

Inequality in healthcare has become a major concern for social stability. While urban specialist services have expanded, rural populations remain deprived of access to quality healthcare. Within the first 120 days, mandatory telemedicine connectivity at the upazila level, digital tracking of public hospital medicine supply chains, and publication of a draft national health insurance framework could reduce out-of-pocket health expenditure. Mobile medical units focused on maternal and child health services could deliver rapid, measurable outcomes. Healthcare is not only a social service—it is a key driver of economic productivity.

While Digital Bangladesh is now a reality, digital security vulnerabilities threaten its sustainability. Establishing a national cyber response task force, conducting cyber audits of critical infrastructure, and strengthening data protection laws are urgent priorities. Multi-layered security systems must be implemented across banking, healthcare, and government databases. A digital public service fast track integrating birth registration, land records, health data, and academic certification under a unified digital identity would reduce administrative costs and processing times.

Bangladesh must now move beyond being a technology user to becoming a technology creator. In this context, AI diplomacy is strategically significant. Technology partnerships with advanced economies now extend beyond software services into semiconductors, data architecture, and strategic capabilities. Joint research, technology transfer, and skills development partnerships—particularly with the United States—could gradually build domestic capacity in semiconductor and chip manufacturing.

To strengthen domestic technological capacity, an AI infrastructure policy committee should be established. This body would oversee national data centre frameworks, cloud governance, high-performance computing capacity, government data standards and cybersecurity architecture. A national AI infrastructure roadmap would enable scalable computing, secure data sharing and rapid innovation across healthcare, agriculture, financial systems and smart manufacturing.

Preparing for the Fourth Industrial Revolution requires a comprehensive national policy integrating innovation, research, start-up ecosystems and skills development. An emerging technology application development fund could accelerate innovation across industries. A dedicated 4IR implementation task force – integrating industry, academia and technology sectors – could drive real-world deployment of robotics, biotechnology, AI applications, industrial automation and smart governance, generating employment and positioning Bangladesh as a regional innovation hub.

Food security extends beyond production; it involves storage, logistics and fair market systems. District-level modern cold storage networks, agro-processing industries and direct farmer integration into digital marketplaces could reduce post-harvest losses. Subsidies for climate-resilient seeds and smart irrigation technologies would help stabilise production and strengthen long-term resilience.

Education and skills development remain the foundation of long-term growth. A national learning recovery programme focusing on mathematics, science and language competency – combined with targeted regional support – could address learning gaps. Aligning technical and vocational education with industrial demand would enhance youth employability and help maximise demographic dividend opportunities.

Energy sector transparency through published audit reports and expanded renewable energy investment is also essential. Without updating long-term energy security strategies, economic stability remains vulnerable. Transparency in energy policy directly strengthens investor confidence.

Balanced diplomacy, export market diversification and improved remittance incentive frameworks would ease foreign exchange pressure. ASEAN markets offer high-growth opportunities. Strengthening tariff advantages, quality certification support and logistics cooperation would enhance competitiveness in garments, pharmaceuticals, IT services and agro-products.

Bangladesh also holds natural advantages in halal food production as a Muslim-majority nation. The global halal economy is already a multi-trillion-dollar market. Strengthening halal certification authorities, developing globally compliant processing industries, and expanding access to Middle Eastern and Southeast Asian markets can increase foreign currency earnings. Halal cosmetics, pharmaceuticals and tourism also offer major growth opportunities.

Administrative reform is essential for the sustainability of all initiatives. Time-bound ministry action plans, performance-based evaluation systems, merit-based promotion structures, and guaranteed independence of anti-corruption and regulatory bodies would strengthen institutional trust. Judicial backlog-reduction task forces and stronger human rights protections would further reinforce state legitimacy.

Skilled migration should become a strategic national priority to secure future foreign exchange flows and labour-market dignity. At present, a large share of Bangladeshi migrant workers remain in low or mid-skill categories, limiting income potential and remittance quality. Yet global labour markets are shifting towards high-demand sectors such as healthcare, IT, semiconductor support services, energy technology, automation operations, marine engineering and care economy services. A national skilled migration roadmap within the first 120 days could enable global skills mapping, country-specific standard alignment and international certification integration.

If technical training institutes, medical technical skill centres, IT academies and industry-linked vocational systems are integrated into an export-oriented skills pipeline, migrant income could rise significantly. Bilateral labour agreements must expand beyond job placement to include skills recognition, social security access and career progression pathways – positioning migrant workers as contributors to the global skills ecosystem rather than merely remittance senders.

Finally, political and social harmony remains critical. Launching an inclusive national dialogue within the first 120 days – bringing together political parties, business leaders, civil society and youth representatives – could help establish consensus-driven governance. Unity, not division, will become the strongest pillar of any new government.

The first 120 days are not a period for miraculous transformation, but they do offer an opportunity to build a foundation. If this period is used to establish transparency, accountability, institutional democracy, technology-driven transformation and bold structural reforms, public confidence can begin to recover. Bangladesh stands at the intersection of possibility and challenge. With the right strategic direction and decisive implementation, these 120 days can mark the beginning of a responsible, inclusive and sustainable state-building journey.