Shifting Winds: Bangladesh in an Age of Fragmented Interdependence

The US and China can keep restricting each other's technologies while making hundreds of billions of dollars' worth of transactions. India can belong to the Quad alliance while purchasing Russian oil. The Gulf monarchies can be closer to Washington on security and to Beijing on business. It is possible to go on, but the examples above prove one thing – such a logic is typical for the age of winds changing direction.

Washington and Beijing remain the most important system-level competitors, but their competition does not provide a map of the future order. That order can be neither classical bipolarity nor fully developed multipolarity. It is a fragmented interdependence – security blocs, transactional relations, coalitions, and spheres of influence built upon trade, finance, production, migration, and supply chains that are too expensive for any major economy to renounce.

The previous model saw China as the Dragon, the US as the Eagle, India as the Elephant, and Bangladesh as the Hidden Tiger. Such metaphors were useful for understanding the balance of power in South Asia, but now they are as misleading as they are informative. Power is distributed by functions. The EU leverages its huge market through labor and climate regulations, standards, and investment screens. Britain has finance, diplomacy, higher education, development, and diasporas. Japan has patient infrastructure finance; Australia, additional weight in Indo-Pacific security; and Canada, connections between trade diversification, critical minerals, education and migration.

In other regions, the Gulf states act as investors, energy powers, diplomats, and destinations for labor migrants rather than just as allies of Washington. Russia keeps using energy, weapons, nuclear projects, and disruptions as levers of influence. ASEAN economies have production and regionalism to offer. India itself is another case in point: cooperation with the US at sea does not mean that Bangladesh lacks strategic independence and relations with Moscow. Middle powers have increased their freedom to choose partners by issue rather than by camp.

As a result, economic security has come to matter in every investment decision. As HSF Kramer stated in his 2025 report on mergers and acquisitions, "China Plus One" redirects transactions to Southeast Asia and India. However, cost is not the only parameter now. Governments and businesses have started asking whether a particular location is politically safe, legally compliant, and resistant to various risks, including those related to export controls, sanctions, and investment screens. Artificial intelligence, data, critical minerals, energy, and ports are strategic resources. Joint ventures and local partners may reduce risks, but only proper regulations help turn interest into reliable capital.

Bangladesh is part of this web with very uneven exposures. In fiscal year 2024-25, goods exports totaled $48.28 billion, with garments accounting for $39.35 billion, or over 80% of total exports. The EU purchased almost $19.7 billion worth of garments, and the US remained the largest single-country buyer. Thus, Western demand is not just a rhetorical claim but a real resource, which keeps factories, jobs, and foreign currency alive. Moreover, access to European markets entails labor, environmental, and good-governance requirements.

China holds a similar position as the largest trading partner and a major supplier of industrial components, infrastructure, and even defense equipment. It is primarily an input-supplier relationship, not an alternative export market. Even more inescapable is India because of geography: it turns politics into everyday problems related to borders, water, transit, security, and power. Bangladesh's import capacity from India amounts to almost 2,656 MW, or almost nine percent of the installed capacity of the electricity grid – a useful source of connectivity, but also a reminder of the risks posed by contracts and concentration.

Japan is officially recognized by Tokyo as Bangladesh's largest development partner and provides the country with investments in transport and port infrastructure. Britain makes a difference through its finance, commerce, education, and influential diaspora. Canada and Australia add migration, development, education, and selective trade to it. Russia is still connected to the Rooppur nuclear plant. The Gulf is crucial as a source of fuel, jobs, and foreign currency: in the first eleven months of fiscal 2025-26, Saudi Arabia and the UAE sent Bangladesh $9.56 billion in recorded remittances. No other relationship plays a more important role, and all of them should be regarded as indispensable.

It creates some room for maneuvering but no immunity. Export concentration, dependence on imported energy and foreign financing, banking troubles, and infrastructure commitments make external choices a tool of external pressure on Bangladesh. Being on the verge of graduating from the list of least-developed countries (still officially scheduled for November 2026, despite an application for an extension under consideration) makes productivity and standards increasingly important. Preferential access cannot be taken for granted anymore, and tariff shocks often come bundled with requirements for sourcing, labor, data, or security.

The doctrine needed is the doctrine of disciplined multi-alignment: cooperation with different partners across different sectors, clear national limits, no exclusive dependence, and rejection of deals that damage sovereignty, transparency, and long-term resilience. It is harder than pleasing everyone, but it requires the government to know which dependencies are acceptable, which technologies are sensitive, which projects are commercially viable, and in which cases Bangladesh needs to retain control.

There are five aspects of the practical strategy. First, diversify exports, products, investors, and infrastructure financiers. Second, restore regulatory credibility through democracy, contract enforcement, transparent procurement, and consistency. Third, reduce excessive dependency on garments, imported energy, and any single geopolitical partner or market. Fourth, invest in maritime capabilities, ports, logistics, skills, technology, data governance, and economic diplomacy. And fifth, build functional coalitions with the EU, UK, Japan, Canada, Australia, Gulf and ASEAN countries without neglecting China, India, and the US.

Democracy belongs in this strategy, not outside it. Major powers selectively adhere to democratic norms, and this hypocrisy does not negate the role of institutions. Democratic elections, accountable government, and enforcement make foreign policy less risky, improve confidence in contracts, guarantee labor reputation, strengthen claims to preferential access, and ensure public ownership of foreign commitments. Legitimacy helps increase bargaining power, as partners are aware that any deal will withstand both public scrutiny and a change in government.

The opportunity for Bangladesh is not to become an outpost or to auction off its strategic loyalty, project by project. It is to make itself valuable to many partners and dangerously dependent on none. The changing wind direction will favor such countries. Otherwise, stronger institutions and a clear destination are needed.

Zillur Rahman is a political analyst and President of the Centre for Governance Studies (CGS). He hosts Tritiyo Matra on Channel i and writes on geopolitics, strategic affairs, and governance.