From Political Changes to Economic Growth, from Wars to Disasters: Asia’s Defining Year 2025 (VIII)

The year 2025 in Asia was shaped by impressive economic performances, historic turning points, lingering tensions between neighbors, high-stakes elections, waves of protest, the change of governments, cautious diplomatic breakthroughs among certain states, and relentless natural disasters with deep scars for peoples and countries.

THE AsiaN, founded on Asia Journalist Association’s network of journalists, is highlighting through articles written by its members the major issues that defined 2025 across Asia’s regions and countries. – Editor’s note”.

Bangladesh Under Transformation: Political Upheaval,
Economic Pressures, and Social Change

By Bhanu Ranjan Chakraborty,
Asia Journalist Association, Bangladesh

After the Fall of the Hasina Government

DHAKA: Nearly four years after Bangladesh descended into severe political and economic turmoil, the country is now entering a major transition. Political parties, professional groups, and ordinary citizens are calling for an elected government. In response, Chief Adviser of the interim administration, Nobel Laureate Professor Dr. Muhammad Yunus, announced that a free and fair national election will be held in the first half of February 2026. Preparations are underway.

The Awami League government collapsed on August 5, 2024, amid a mass uprising, prompting then–Prime Minister Sheikh Hasina to flee to India. Parliament was dissolved the next day, and the Supreme Court -consulted under Article 106 -cleared the way for an interim government. On August 8, a seven-judge Appellate Division led by Chief Justice Obaidul Hasan endorsed the formation of an interim administration headed by Dr. Yunus.

Since taking charge, the interim government has made sweeping changes: senior civil servants have been replaced, local elected representatives have been substituted with appointed administrators, and banking-sector reforms have begun through a newly proposed commission. Police reforms are also underway to make law enforcement more citizen-focused. Meanwhile, multiple criminal cases -including murder charges- have been filed against Sheikh Hasina and several former MPs and ministers, triggering a wave of resignations across government and private institutions. The interim government has signaled a strong anti-corruption stance, vowing to prevent graft across the public sector.

Challenges and Direction of the Yunus Transitional Administration

The central task of the Yunus-led administration is to regain public trust as an election-managing authority. Its primary challenges are ensuring credible elections, maintaining economic stability, and meeting growing public expectations. While early legal questions over the legitimacy of the transitional administration were resolved when the Appellate Division upheld the process, restoring political stability while steering the economy and preparing for elections remains a formidable undertaking.

Economic Conditions and Reform Priorities

Bangladesh’s economy continues its shift from agriculture to manufacturing, driven largely by remittances and the ready-made garment (RMG) industry. Decades of reform since 1971 enabled strong growth in the 1990s, and today Bangladesh ranks among the world’s largest RMG exporters. According to the IMF, it is the 35th largest economy globally, and the UK-based CEBR projects that it could rise to 20th by 2038.

However, economic momentum has slowed sharply—recording 5.78% growth in FY 2022–23 and 3.69% in FY 2023–24—due to weak private-sector credit, limited job creation, and inflation-control measures. While international institutions expect modest improvement, dependence on remittances and exports remains a structural vulnerability.

To address this, the interim government has placed economic reform at the center of its agenda. A high-level task force has been established to map strategies for equitable and sustainable development; Bangladesh Bank has initiated banking reforms; and the government has approved a restructuring of the National Board of Revenue into two bodies: the Revenue Policy Department and the Revenue Administration Department.

Export performance remains robust. While RMG dominates, sectors such as leather, jute, and agricultural products are expanding. Leather exports recently surpassed $1 billion. Major export destinations include the United States, Germany, the United Kingdom, Spain, and Poland. Export earnings in the first quarter of FY 2025–26 reached $12.31 billion, up 5.65% from the previous year.

Despite these strengths, Bangladesh faces multiple economic risks: high inflation, low foreign-exchange reserves, exchange-rate instability, slowing GDP growth, non-performing loans, unemployment, inequality, energy shortages, and persistent fiscal deficits.

Social Change, Youth Dynamics, and Emerging Inequalities

Over the last half-century, rural transformation has been driven by universal primary education, expanded road networks, nationwide mobile connectivity, and the growth of overseas employment opportunities. Today, 163 million citizens use mobile phones, boosting productivity and reshaping communication. Youth continue to serve as a critical force in entrepreneurship, digital innovation, environmental activism, and social reform, echoing their historic role in national movements from the Language Movement to the pro-democracy struggles.

However, unemployment remains a pressing challenge. In 2023, an estimated 6.26 million people were jobless, including 5.42 million educated unemployed. The unemployment rate climbed to 4.63% in early 2025, intensifying social tension. Poverty also remains widespread: 19.2% of the population lives below the poverty line, with urban poverty at 16.5% and rural poverty exceeding 20%.

Regional Context and International Perspectives

Bangladesh’s political transition is unfolding amid shifting South Asian geopolitics involving India, China, Sri Lanka, and Pakistan—marked by intensifying Sino-Indian competition and regional economic fragility. Bangladesh now faces heightened pressure to navigate Chinese influence while recalibrating relations with India. Economic projections weakened after the 2024 political upheaval, mirroring broader regional downturns.

International investors and institutions remain cautiously optimistic about Bangladesh’s long-term prospects. They highlight its strategic geographic position, large consumer base, and strong industrial potential, while stressing the importance of policy predictability, improved logistics, and accelerated industrialization. Bangladesh’s location at the intersection of India, China, and Southeast Asia provides unique opportunities to become a regional economic hub integrated with markets exceeding four billion people.

Conclusion: A Promising Economy Still in Transition

Bangladesh is widely seen as a promising emerging economy. Yet lasting progress will depend on effective governance and active private-sector participation. Only through coordinated action between state institutions and market actors can Bangladesh build a resilient economic system capable of sustaining long-term, inclusive growth.