Bangladesh: What happens when a development darling falls from grace?

Development success model Bangladesh held its election on Sunday amid a boycott from the main opposition party and low-turnout balloting, handing a fourth consecutive term to Prime Minister Sheikh Hasina in what was widely viewed as a foregone conclusion. But with accusations of ballot rigging, voter manipulation, and crumbling democratic standards casting doubts on the legitimacy of results, it prompts the question: What role do — and should — international donors play in countries on a downward authoritarian slide? Hailed as a case study in poverty reduction, Bangladesh has achieved remarkable economic growth since gaining independence in 1971. Once famously labeled a basket case due to seemingly insurmountable poverty, the country has seen significant progress under Hasina in areas such as health, education, and female empowerment, and is on track to graduate from the U.N.’s Least Developed Countries list by 2026. But Hasina’s 14-year rule has been marred by declining democratic standards, with a crackdown on political opponents, forced disappearances, and extrajudicial killings drawing increasing condemnation from the international community. An open letter published in The New York Times in August, which expressed concerns over “threats to democracy and human rights,” was signed by over 170 global leaders including former U.S. President Barack Obama and former U.N. Secretary-General Ban Ki-Moon. The letter was spurred by the “continuous judicial harassment” of Muhammad Yunus, a Nobel Prize-winning microloan pioneer who is viewed as a potential political rival of Hasina. In the lead-up to the Jan. 7 election, opposition party members were arrested or found themselves facing an endless stream of court cases that crippled their ability to operate. The main opposition party leader, Khaleda Zia, was jailed in 2018 and remains under house arrest, and her party has promised to boycott elections until a neutral caretaker government to oversee elections is reinstated. In May, the U.S. government threatened to impose visa restrictions on anyone engaging in “actions that undermine the democratic election process.” However, given the historic role of the U.S. as a development partner in Bangladesh, many in the international community are questioning whether the measures are too little, too late. Rigged elections: As dangerous as no elections? Elections are usually seen as a stabilizing force, giving international donors more confidence that aid will be used effectively. But rigged elections can lend a false sense of legitimacy to dictators or authoritarian leaders, said Nic Cheeseman, a professor of democracy and international development at the University of Birmingham in the United Kingdom. This not only allows them to survive more effectively, he said, but also “often means that they can access more funds from the international community.” While coups would attract a fairly standard set of responses from foreign donors, such as pulling budget support for certain ministries or ensuring funding is channeled through nonstate groups, “the same set of things don't always happen if an election has been rigged,” Cheeseman said. But over time, disillusionment with the democratic process can lead to political instability, he added, risking development gains. Until now, political unrest in Bangladesh has been minimal because “the government was able to unleash a culture of fear within the society,” said Mubashar Hasan, a Bangladeshi researcher at the University of Oslo, “delaying that public outburst.” But this is changing, he said, as popular discontent over rising living costs in the wake of the COVID-19 pandemic grows. The lead-up to Bangladesh’s elections saw countrywide street protests and demonstrations, attracting thousands of supporters and culminating in the violent dispersal of a political rally in October, which left at least 16 dead and thousands injured. Civil unrest is most likely when political and economic exclusion starts to overlap, said Cheeseman, who advocates for donors to be more explicit about the dangers of poor-quality elections. “If consistently rigged elections is one of the things that makes coups more likely, it doesn't make sense to be soft on election rigging, and then super hard on the coup,” he said. Should aid be political anyway? So what does more pushback from the international community mean for foreign aid? Aid conditionalities are not an option, experts who spoke to Devex for this article agreed. Ethical dilemmas aside, there is very little evidence that they generate political change, Cheeseman said. So far, foreign aid flows to Bangladesh appear unaffected by the concerns of their various respective governments. Despite the threat of visa restrictions and warnings from the U.S. government, the U.S. Agency for International Development announced additional humanitarian funding to Bangladesh last month. And one large philanthropic organization told Devex via email that “grants and fund flows have not been affected” by the current political situation and that they expected “smooth execution” of recently signed agreements with the Bangladesh Ministry of Finance. “Aid should not be linked with politics. Aid is something which should be driven by the needs of the people,” one humanitarian worker at an international NGO with programs in Bangladesh told Devex, requesting anonymity due to fear of repercussions from the ruling government. “As a humanitarian organization we keep delivering aid to the people who are in need, even in times of political crisis or dictatorship.” But donors also want to maximize the efficacy of the aid they give — and investing in countries with good governance is more likely to achieve this. “Aid typically is going to be most effective in countries with accountable governments,” Cheeseman said. “Thinking about the political conditions that are necessary for aid to be effective is really important.” Whose development — and for how long? One of the ways that foreign donors can do this is to anticipate “what governments are likely to do with the kind of aid that we're giving them,” said Cheeseman — and if there are concerns that funds may be diverted to serve the ambitions of a ruling elite, take steps in advance to try to prevent this. One country donor told Devex via email that it “requires programmes and projects to be as transparent as possible.” But demanding transparency can be difficult in authoritarian states, where the opportunities for corruption are higher. In Bangladesh, the World Bank famously withdrew funding for building the Padma bridge in 2012 after uncovering what it called a “high-level corruption conspiracy” involving government officials. But for the humanitarian sector, a more pressing concern may be that the country’s unquestionable economic success obscures growing inequality. “If you see the growth story of Bangladesh, my first question to myself as a researcher is — who tells this story?” said Hasan. “Did it trickle down to the people?” Income and wealth inequalities have remained high in Bangladesh, with 1% of the population holding 16.3% of the total national income. Hasan said this has been exacerbated by poor governance. “The lack of accountability creates a system that is kind of similar to Russia, where you see the rise of oligarchs. It's this handful of people who make millions and millions of American dollars,” he said. One of the goals of foreign aid is, of course, to address inequality and ensure that economic gains reach those excluded from the national welfare system. The country donor told Devex that “wherever possible we will remain engaged even in the most challenging countries, to ensure that life-saving support reaches those paying the price for conflict and bad governance, and to stand up for human rights and the rule of law.” But foreign aid would be most effective if instead of just trying to fill the gaps left by poor governance, it helped to promote “more accountable, inclusive, representative political systems and societies,” said Cheeseman. “That's when I think we can start to ensure that the aid that's provided leads to well-distributed benefits.” Changing geopolitics, less leverage The ability of Western donors to promote democracy through aid is waning, however, as the world ushers in a new global order and the influence of countries such as China and India grows. Both countries have demonstrated eagerness to expand their influence in neighboring Bangladesh. Alternative options for investment have made countries “bolder in rejecting some of the demands that Western donors would traditionally perhaps have placed,” said Cheeseman. In countries like Bangladesh, which is of increasing geostrategic importance, the concern from Western donors is that “taking a really strong position on democracy and elections will allow somebody like China … to usurp your influence,” he said. As Bangladesh’s economy has grown, it has increasingly turned toward nationalism and self-sufficiency. The Padma bridge, abandoned by the World Bank after the corruption scandal, was finally completed in 2022 using national funds — “a symbol of our capacity, our strength and our dignity,” said Hasina in a speech at its inauguration. The increasing intolerance for what Bangladesh views as foreign interference has led to a “gradual clampdown” on international donor organizations that operate in the country, said the humanitarian worker. These predominantly take the form of visa denials for foreign workers, or “multiple layers of compliance” which are “time consuming, resource consuming. It’s a delaying tactic,” the worker told Devex. “You make the process so lengthy that at some point the organization thinks okay, let’s leave it, let’s move on.” With international donors less able to operate in the country, “that means indirectly also that the space for criticism, space for setting the accountability, space for asking questions gets limited,” the worker said. Future of funding The nature of foreign aid received by Bangladesh is also changing. Due to graduate out of the group of Least Developed Countries by 2026, it will soon become ineligible for certain types of development assistance that target the world’s poorest economies. At the same time, a growing recognition of the need for a “loss and damage” fund to help countries on the front line of climate change means that foreign aid in Bangladesh is increasingly likely to come in the form of climate-related funds in the future. But the danger of climate-related aid is that it is allocated on the basis of need, rather than formulas which consider the quality of governance, said Cheeseman. “One of the risks is that if you start to say that a lot of the money you're giving out is not based on any kind of concern for the type of government you're giving it to,” he said, “the more and more you're not actually giving out money in ways that reward and strengthen democracy.” In Bangladesh, said Hasan, the government uses this to its advantage. “It's also a shield that the government uses so that the discussion and debate and criticism about their handling of rights and lack of democracy could shift to being a victim,” he said. Donors need to be more conscious about tying climate-related aid to issues of democracy and human rights, he told Devex. “There should be a bit more oversight from the donors about conducting accountability of these funds, how they're being spent in Bangladesh.” Without this oversight, the risk over the long term is that we stop talking about the kinds of things that make aid more effective, said Cheeseman — “weakening our ability to encourage better forms of government that use that money in more productive ways.”