From ‘darbesh era’ to ‘mob era’: Dynamic banking, judiciary and revenue board essential for economic recovery

President Trump's tariff policy has shaken the global economy. After the Supreme Court scrapped one round of tariffs, uncertainty continues, sometimes it is 10%, sometimes 15%. Countries are now afraid to even revisit previous trade agreements. How do you see this situation?

First, as an economist, I believe everything must be discussed with measurement and statistics. 

What we are witnessing is not sudden irrationality, but a response to America's internal economic crisis, its debt. The US economy is worth roughly $32 trillion, while public debt stands at around $37 trillion. Debt has exceeded GDP. Japan reached this stage earlier, and historically, once debt crosses GDP, economic pressure intensifies.

To manage this fiscal crisis, attention shifted to the trade deficit. Tariff walls were raised so imports would generate revenue, which could then be used to service debt. That is why, despite criticism, many Americans continue to support President Donald Trump. He said this before the election: he would raise tariffs, build walls, and bring jobs back.

Whether jobs can actually return is debatable; once jobs leave, they rarely come back. But politically, he framed tariffs as a solution to the fiscal deficit.

With the November mid-term election approaching and swing voters playing a key role, how uncertain is the political future of the US?

It is a genuine swing situation. The US political system allows people to vote against their own party. A narrow majority does not guarantee long-term power.

In contrast, when representatives believe they only need to raise their hands in parliament, democratic conscience erodes. Democracy fails if human judgment cannot be exercised freely.

So there is no reason for panic. Democrats may return, or they may not. If economic momentum continues, the situation may not be as catastrophic as it appears from the outside. People trust economic management above all else, i.e. jobs, inflation and purchasing power.

Inflation is currently quite low. Employment matters more than ideology. That is why I cannot predict the results in November with certainty.

Trump is the only US president to be impeached twice. If women voters shift towards Democrats, as reported by CNN, could that destabilise the economy?

Media narratives are often exaggerated. In Bangladesh, I sometimes see YouTube reports claiming blood will flow on American streets. I look outside my window, but nothing happens.

As President Clinton famously said, "It's the economy, stupid." People vote based on economic performance, jobs, inflation, and growth.

America has strong checks and balances. Judges routinely restrain presidents. Trump publicly criticised judges for 45 minutes.

Look at President Biden's student loan forgiveness plan. Despite political support, the Supreme Court struck it down due to fiscal limits. The system prevailed.

This institutional balance prevents unchecked authoritarianism. That stability is something we desperately lack.

How does US consumer sentiment affect Bangladesh's RMG sector?

The US remains Bangladesh's largest export destination. Consumer confidence is currently stable. If winter demand rises, exports may benefit.

Bangladeshi garments dominate low-end markets like Walmart. But in higher-end stores such as Macy's and JCPenney, Bangladesh is far less visible. Vietnam, China, Cambodia, and India dominate those segments.

A $70 shirt versus a $10 shirt, value matters more than volume. High-end buyers do not wait for clearance sales. We fail to reach them.

Why? As the song in The Sound of Music says: Nothing comes from nothing. Where is our investment in fashion education, design, exhibitions, and skills? Especially after the last year and a half, there is no indication we are moving in that direction.

Vietnam exports over $400 billion annually. Bangladesh struggles to cross $50 billion.

You recently wrote about the "darbesh era" and the "mob era" in Bangladesh. Are we already in economic collapse?

The "darbesh era" refers to a politically empowered individual associated with stock market manipulation, loan defaults, and financial scandals. From 2018 onward, instead of solving default problems, definitions were changed. Looting became institutionalised.

We handed the chicken coop to the fox.

Then came the July Uprising… After that came the "mob era" under Professor Yunus. Mobs became institutionalised. Announcements of demolitions were made in advance, yet no preventive action was taken.

On the same day as an investment summit, shops like KFC were vandalised. Investors received a clear message.

During this period, three million people became newly poor, an unprecedented reversal since independence. Corruption worsened. Minorities faced persecution. Mobocracy became governance.

Young people learned that destruction brings reward.

What challenges does the new government face now?

The new Prime Minister spoke of building a "knowledge-based society", a phrase I appreciated. But knowledge without moral integrity can be dangerous.

Institutions were severely damaged. Nobel Prizes have been awarded globally for institutional economics for a reason. Without police, courts, and accountability, money alone cannot create growth.

This burden now falls on the Bangladesh Nationalist Party government.

What must be done to stabilise the banking sector?

We made a fundamental mistake. We never developed a proper capital market. Large borrowers were pushed into banks instead of the stock markets. Banks should provide working capital, SME finance, and agricultural loans, not long-term industrial finance.

Privatisation created monopolies. One individual owning six banks is not capitalism; it is cronyism. Tax-to-GDP ratio fell from 12% to below 8%.

The central bank must be truly independent. The governor must have real authority. Financial crimes must be investigated by the central bank, not paralysed courts.

Without dynamic institutions, banking, judiciary, and revenue, no recovery is possible. Trust can return, but only through action, not words.