Bangladesh’s Stability and Growth Come With a Cost as Elections Loom
(Bloomberg) -- Since Bangladesh Prime Minister Sheikh Hasina won her second term five years ago, the Viyellatex Group has boosted turnover by 50 percent to $300 million during a period of relative calm.
The prominent garment manufacturer, along with other businesses, has benefited from the government’s harsh security crackdown, aimed at preventing the terrorist attacks that had scared both foreign and local investors. As the national vote scheduled for Dec. 30 draws closer, security operations have intensified and prominent opposition leaders have been jailed. Bangladesh deployed troops across the country on Dec. 24 to help to maintain law and order during the election period, the public relations agency of the Armed Forces said on its website.
Companies are hoping the good economic times can endure this period of heightened volatility in a nation with a long history of political violence. In the run-up to the last election, Viyellatex trucks contended with Molotov cocktail attacks and roads blockaded by political activists as the firm delivered shipments for clients including Marks & Spencer Group PLC and Calvin Klein Inc.
“We have political stability at this moment and that must continue,” said Viyellatex chairman David Hasanat in an interview on Dec 18. "Political stability has helped our business to grow."
Still, the government has been criticized by the administration of U.S. President Donald Trump for failing to allow U.S.-sponsored international election monitors into the country, with the State Department issuing a statement on Dec. 21 urging the poll to be conducted free of "harassment, intimidation, or violence."
In response, Bangladesh’s Ministry of Foreign Affairs said 175 election observers had been accredited, along with 118 local organizations and 25,920 observers who’ve been approved to monitor the polls.
Hasina’s ruling Awami League -- which has presided over years of high economic growth and handled the influx of 750,000 Rohingya refugees from neighboring Myanmar -- is widely expected to return to power. That outcome would ensure economic policy continuity and help sustain a steady flow of foreign investment.
At the same time, the government has launched a crackdown on the opposition Bangladesh Nationalist Party, which boycotted the last election. At least 8,243 activists and leaders of the opposition alliance have been arrested since the election schedule was announced in November, according to data compiled by the BNP.
Opposition leader and former prime minister Khaleda Zia is now in jail, and her son was recently sentenced in absentia to life in prison. That has many worried about the state of democracy and the emergence of something resembling one-party rule under Hasina. Her government disagrees.
"Those who were arrested are accused in old criminal cases, police are not arresting innocent people," said Information Minister Hasanul Haq Inu by phone. "They are making false, fantastical allegations against the ruling party. Opposition activists are attacking ruling party campaigners every day. What will be the answer to that?”
He said Zia was convicted following 10 years of trials. "Nobody is above the law."
For the current prime minister, whose administration wields strong influence over the courts, the stakes are high because defeat would likely see the opposition launch a retaliatory bout of arrests and court cases against members of the current administration, says Pratyush Rao, an associate director for India and South Asia at Control Risks, a consultancy.
"Clearly, she’s nervous," Rao says. "For Hasina, it’s an existential battle."
‘Reign of Terror’
The crackdown that’s enabled rising incomes has also bottled up political expression, driving some toward Islamist groups to launch attacks on a cafe and secular bloggers.
It has also spurred the political reemergence of respected former minister and lawyer Kamal Hossain as the leader of an opposition alliance which could see closer competition at the polls.
Both sides have since resorted to political violence.
Hossain, 81, who once helped draft the country’s constitution, threatened the government with retaliation after his motorcade came under attack from ruling party supporters earlier this month, damaging seven vehicles and injuring 12 people.
"We will not boycott the elections even if we were to die," Hossain said at a recent rally where he accused the government of launching a "reign of terror" against his candidates. "Our party activists will take my dead body to the polling booth."
Despite the attack on an upscale Dhaka bakery frequented by foreigners in 2016, numerous attacks on secular bloggers and the politically-charged atmosphere, analysts say the opposition BNP’s decision to participate is a positive step for a country.
"The fact that the main opposition party BNP will contest these elections is good news overall for Bangladesh," said Reshmi Khurana, a Singapore-based managing director for advisory firm Kroll. "Sheikh Hasina is widely expected to win, but unlike in 2014 when the BNP boycotted the elections, this time the BNP is likely to provide some competition."
That may be good for businesses. The garment sector -- accounting for 83 percent of the nation’s total exports -- aims to take annual overseas sales to $50 billion by 2021 when Bangladesh completes half a century of its independence. Exporters say political calm is crucial for that to happen.
“People have shunned violence as they are now economically better off,” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association. “It’s important to make sure that violence doesn’t return.”
©2018 Bloomberg L.P.