Today's Edition
DHAKA (REUTERS)
Bangladesh dissolved its national parliament on Tuesday, paving the way for the formation of a military-backed interim government and fresh elections after the resignation of long-time leader Sheikh Hasina.
Bangladesh President Mohammed Shahabuddin took the step to dissolve the current parliament and begin a process to form an interim government, according to his press secretary Joynal Abedin.
Shahabuddin directed the authorities to lift the curfew earlier in the day after more than two weeks of clashes between Hasina’s supporters, security forces and student-led protesters. Bangladesh’s army chief Waker-Uz-Zaman is looking to set up an interim government in consultation with the president.
What happens next after Hasina, who turned Bangladesh into an economic success, remains unclear. It is possible the interim government excludes her Awami League party, which won almost 80% of the parliamentary seats in a boycotted vote in January. While Shahabuddin has vowed to hold elections "as soon as possible,” it’s unclear if Hasina’s allies will be able to participate or return to power.
Thousands of jailed protesters were freed, as well as Hasina’s rival and opposition leader Khaleda Zia - a former prime minister herself. The student-led protesters are pushing for Nobel Peace Prize winning economist Muhammad Yunus to lead the interim government.
Investors are betting on a smooth transition with a key Bangladesh stock index surging by the most since March 2020. Still, the interim government will have to focus on the economy that has struggled to gain its footing since the pandemic and has come under pressure from the curfews and recent internet blackouts.
The new government may also have to negotiate with the International Monetary Fund and other creditors for more cash to bolster dwindling reserves.
The multilateral lender, which approved a $4.7 billion loan program last year, said it would continue to "support efforts to ensure economic stability and deliver inclusive growth,” according to a Reuters report.
"These events in Bangladesh could not have come at a worse time given that it was regaining some amount of macro-stability after having taken the tough policy measures linked to the IMF program,” said Ruchir Desai, fund manager at Asia Frontier Capital, which has been adding to its position in Bangladesh stocks in the past two months.
