Toward the end of June, 2022, on the day Sheikh Hasina inaugurated the Padma Bridge, I was on the ground floor of United Hospital in Dhaka, carrying my ill younger daughter and waiting for her to see a doctor.
The waiting room was enormous, and perhaps a hundred people were scattered across it. There were television sets mounted around the room, and, whether by coincidence or government instruction, every one of them seemed to be showing the same thing.
This was useful.
The Padma Bridge was anything but merely a bridge by then. It was the physical culmination of an argument about Bangladesh, and particularly about Hasina’s Bangladesh.
For years, the government had presented development as both an accomplishment and an answer. Questions about elections, corruption, banks, disappearances, civil liberties or the increasingly peculiar relationship between the state and the Awami League could be met, ultimately, with some version of the same response…Look at the country. Look at the growth rate. Look at the electricity. Look at the flyovers. Look at the bridge.
Now there was an actual bridge to look at.
As I walked around with my daughter, waiting for the ceremony to reach its climax, I realised that I had been handed a crude but irresistible focus group. I began studying the room. The great moment eventually arrived. On television, there was pageantry, and the obvious atmosphere of a government celebrating its own vindication.
I looked at the people. They looked profoundly bored. I just remember some blank faces, people waiting for doctors, people looking at phones, people staring through the television rather than at it. I kept walking around, trying to catch the vibe. The vibe was indifference.
I have thought about that room many times since.
Until roughly the Covid pandemic, Hasina, her government and her cronies had enjoyed an extraordinary run. Everything was “stable.” Two elections had been stolen without producing diplomatic pressure serious enough to threaten the arrangement.
The economy expanded. Foreign-exchange reserves accumulated. Development indicators improved. The government discovered that the political cost of doing strange things to economic institutions was remarkably low.
Taxes could be raised. Money could be printed. Interest rates could be subjected to experiments such as the “nine-six” regime. Banks could be treated as extensions of political relationships. There was, in any case, the proverbial granary full of rice inherited from ‘previous governments’: the foreign-exchange reserves.
The reserves were important not only economically but psychologically. They created the impression that Bangladesh could afford its mistakes.
After the stock-market plunder, the governance of the banking sector, one of the institutional foundations of Bangladesh’s economic progress in the post-Ershad era, began deteriorating in plain sight.
Rules became elastic. As far as I remember, Bangladesh Bank began relaxing reporting requirements when necessary to keep bank balance sheets looking respectable. Regulatory accommodation acquired its own logic: if recognising the problem might create a crisis, perhaps the prudent thing was not to recognise the problem.
Bangladesh became remarkably skilled at this.
There had once been scandals that seemed enormous. Hallmark was one. Its proprietor, Tanvir Mahmud, became almost a national synonym for financial misconduct. But scandal inflation works much like monetary inflation…eventually the old numbers stop impressing anyone.
The string of misconducts that came afterward was so much larger that people practically forgot Hallmark’s Tanvir.
And still the system held.
The reserves helped. Hasina could pursue vanity projects, cronies could pursue their appetites, banks could deteriorate, money could leave the country, and yet somehow enough dollars continued arriving through exports, remittances and other channels to prevent the contradiction from becoming immediately fatal.
This may have produced one of the great misreadings of the Hasina era. Resilience was mistaken for validation. If you repeatedly jump from a second-floor window without breaking your legs, you may conclude that jumping from windows is safe.
The more useful conclusion is that you have been lucky.
The people around Hasina appear to have become increasingly bullish. Money laundering ceased to look like leakage from an otherwise functioning system and began to resemble one of the system’s operating principles.
Possibly because illicit financial flows were becoming an inconvenient subject, sometime after 2018 the government appears to have stopped providing data used by Global Financial Integrity, the organisation whose estimates had helped illuminate the scale of the problem.
Meanwhile, Bangladesh entered what might be called the supernormal-growth phase of corruption and extortion.
Crime itself underwent a political consolidation. For years, civil society had worried about the criminalisation of politics. Hasina’s administration found an elegant solution: it politicised crime.
It became increasingly difficult to locate an anti-government criminal, or even a politically neutral one. Every criminal, it seemed, belonged to the Awami League.
Bangladeshis had previously watched smugglers become members of parliament. Now they watched alleged drug lords enter the legislature. Large bank defaults stopped producing much astonishment. Corruption figures that once would have dominated the news became numbers one scrolled past on a phone.
There was even a finance minister like Abul Mal Abdul Muhith, who had the useful ability to wave these things away. Yet Hasina’s development story remained fashionable among a section of Bangladeshi economists and the business community, at home and abroad.
Some of these people spoke with tremendous confidence about economic policymaking. Their argument had one enormous advantage over ours…that is for a long time, reality appeared to agree with them.
Those of us playing Cassandra had a more difficult position. We kept saying: the country is in trouble. This cannot continue. Something is wrong. And then it continued.
Eventually, in private conversations, we began interrogating ourselves. Are we wrong? Are we missing something? What are we missing here? Surely this cannot go on like this.
It could, as it turned out, go on for quite a while.
What we may have underestimated was the extent to which favourable external conditions could postpone the settlement date. An economy receiving remittances, export earnings and foreign financing while sitting on a substantial reserve cushion can tolerate an impressive amount of stupidity.
The damage accumulates quietly. Institutions decay before aggregate numbers collapse. Political allocation replaces commercial judgment one loan at a time. Then something changes outside the model.
Covid arrived.
After Covid came the interminable Mujib Year. And then, in June, 2022, came the Padma Bridge and my afternoon at United Hospital. Within days of the inauguration, something curious happened.
The rumours about Bangladesh’s foreign-exchange position, which had been circulating for some time, began appearing “officially” and insistently in the media. The reserves were no longer an abstraction discussed by economists. There was a dollar problem.
The timing was almost cruel.
Hasina had just unveiled the supreme physical object of her development narrative when the financial foundation beneath that narrative began to look fragile. The kite of Hasina’s development story snapped its string, flew off the spool, nosedived twice, screamed “Ya Mujib!” and crashed permanently to the ground.
The image is ridiculous, but the political change was not.
Hasina’s legitimacy, particularly among people who did not much care for the Awami League, had rested on four broad propositions: the spirit of the Liberation War, counterterrorism, political stability and development.
Different audiences preferred different pillars. Secular intellectuals could admire one. Foreign governments could appreciate another. Businesspeople liked stability. Economists could point to growth.
Development was the pillar with the broadest reach because it could be experienced and counted. After 2022, defending it became harder.
Inflation does not care about Powerpoint presentations. Neither does a dollar shortage. A household discovering that its income buys less food requires no economist to explain purchasing power. A businessman unable to open a letter of credit does not need a seminar on external-sector pressure.
The peculiar advantage of an economic crisis is that it democratises expertise.
For the remaining two years of Hasina’s rule, her cultivated ecosystem of think tanks, intellectuals and media struggled to manufacture a piece of positive economic news powerful enough to compete with daily experience.
But the more interesting question is whether the crisis actually began much earlier.
My suspicion is that the ‘Tughlaq-style’ experiments of Hasinomics had been altering the structure of the Bangladeshi economy for years. The direction of travel may even have been backwards…from formalisation toward ‘informalisation’.
I began thinking seriously about this around September, 2019, when Hasina launched what looked, at least aesthetically, like a Chinese-inspired anti-corruption crackdown. I cannot say how much corruption it eliminated. It did, however, teach Dhaka residents that their city contained a surprising number of illegal gambling dens.
The raids produced wonderful television. There were gambling tables, equipment, men being detained and, most interestingly to me, piles of cash. The cash bothered me. Why was so much money sitting there?
One possibility was the obvious one: gambling is a cash business. Another was more interesting. Perhaps we were looking at evidence of financial disintermediation. Perhaps people were increasingly moving savings and credit outside banks and regulated financial institutions, and some of that money, after circulating through informal networks, was accumulating in places we had lazily classified as casinos.
The thought led to another.
Perhaps some of the men we called “casino owners” were not primarily casino owners at all. Perhaps they were loan sharks, financiers, modern versions of the mahajan. Perhaps they financed small and medium-sized businesses that could not, or preferred not to, obtain formal credit.
Perhaps they financed enterprises connected to organised crime. Perhaps the gambling dens were partly their “offices” and entertainment hubs.
I could not prove this. I still cannot. But other developments made the hypothesis increasingly difficult for me to dismiss.
Around the same period, Bangladesh experienced a proliferation of entities calling themselves cooperatives, credit unions and other respectable things that accepted people’s savings and, in a number of cases, made them disappear.
Their victims were not exclusively poor or financially naive. People of substantial social standing were caught as well. Some cases involved more than 100 crore taka.
Why were people putting serious money into such places? Because the formal alternatives were not especially attractive.
Banks were producing scandals. The stock market had already been ravaged under the stewardship of the “Darvesh.”[Salman F Rahman] Trust was scarce. Government bond yields remained in the single digits, and government securities were nowhere near as accessible to ordinary investors as they are now.
If you had accumulated money in Hasina’s Bangladesh, the question of where to put it was not necessarily simple.
The more I thought about it, the more I wondered whether official measures of economic progress were missing a subterranean migration. Perhaps capital was moving from regulated institutions into private networks. Perhaps businesses were increasingly financed informally.
Perhaps workers were leaving formal employment for gig work, part-time jobs and other arrangements invisible or poorly represented in official statistics.
Had reliable statistics existed, perhaps we would have seen industrial output and employment beginning to weaken earlier than we realised.
But statistics possess enormous authority, particularly in developing countries. When lived experience contradicts official data, educated people have a peculiar tendency to distrust lived experience.
We wanted to believe the numbers. And thus politics was undergoing its own disintermediation.
Then something happened in early 2021. Al Jazeera broadcasted All the Prime Minister’s Men. The documentary mattered because it arrived during a period in which Bangladeshi activists at home and abroad were forcing another subject into international discussion: the disappearances and killings associated with the security apparatus.
Counterterrorism had been one of Hasina’s most valuable currencies abroad. Foreign governments might object to elections or human-rights abuses, but Hasina offered something they understood…order.
Bangladesh would be stable. Militants would be controlled. The government would be predictable. But the allegations surrounding disappearances complicated that bargain.
Another pillar was simultaneously being eroded from within. Since Shahbagh [movement], Hasina had increasingly encouraged a political vocabulary in which the Liberation War and Muslim identity were placed in unnecessary opposition. The process reached its grotesque conclusion when she made the “Razakar” remarks at that infamous press conference in 2024.
Soon afterward, the security and surveillance state that had been constructed to guarantee “political stability” descended on the population with such ferocity that it destroyed the very stability it was supposed to protect.
There is a certain symmetry to authoritarian systems at the end. Their strengths become liabilities. The propaganda machine loses credibility precisely when credibility is most needed. The security apparatus produces insecurity. The ideology meant to unify begins to divide. The economic model advertised as proof of competence becomes evidence of mismanagement.
The four pillars did not collapse simultaneously. But by the end, none could carry the structure.
More than four years have passed since that afternoon at United Hospital. Bangladesh has had an interim government and then an elected government. A white paper on the economy has been produced. We have learned more about banks, capital flight, bad loans and the condition of public finances.
What I still have not seen is a sufficiently ambitious intellectual accounting of Hasinomics itself.
There are inventories of damage. What is missing is anatomy.
How did administered interest rates interact with politically directed lending? How much capital allocation moved from markets to patronage networks? What did regulatory forbearance do to bank behaviour? What was the relationship between financial repression and capital flight? Did distrust of banks accelerate informalisation?
How much employment migrated out of the formal economy? To what extent did exchange-rate management conceal the external imbalance before eventually worsening it? How did megaproject spending, energy liabilities, weak financial governance and money laundering reinforce one another?
These are not questions about whether Hasina was good or bad. They are questions about how an economy works when political power becomes sufficiently concentrated that feedback mechanisms stop functioning.
That is why the period deserves more than another catalogue of corruption. The economic policymaking of the Hasina years may eventually deserve recognition as one of history’s more spectacular authoritarian mishaps.
If Bangladesh lost something on the order of $250–300 billion through the broader depredations of that era, we should demand at least one return on the investment… knowledge.
We ought to know, with empirical precision, “what didn’t work for us.”
The comforting explanation is that Hasinomics happened because Hasina and her cronies were uniquely terrible people. Remove them and the problem disappears. But history suggests otherwise.
The menu of economic policy is surprisingly short. Governments repeatedly rediscover administered interest rates, directed lending, exchange controls, financial repression, regulatory forbearance, subsidised credit, deficit financing and grand infrastructure schemes.
Politicians everywhere discover that statistics can be presented selectively and that tomorrow is a convenient date on which to recognise today’s losses.
This is why intellectual accounting matters. Unless the monumental mess of Hasinomics is established academically… documented, quantified, debated, taught and eventually incorporated into Bangladesh’s institutional memory…pieces of it will return.
They will arrive with different acronyms and more fashionable terminology. Consultants will produce diagrams. Officials will describe them as innovative. There will be new bottles. The medicine will be familiar.
The difference is that Bangladesh can no longer afford the dosage.
When we Cassandra types were complaining fifteen years ago, the country possessed something enormously valuable that rarely appeared in political speeches: room for error. There were reserves. The debt burden was manageable. Banks still possessed institutional capital. External conditions were often favourable. Remittances and exports supplied dollars. Demography helped.
A foolish decision could be made and the country might have several years before the invoice arrived. That room has now narrowed.
This, perhaps, is the most important inheritance of Hasinomics. Not any particular bad loan, missing billion, ruined bank or useless project, but the destruction of optionality.
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Nayel Rahman is a political analyst