Mohammd Zahin

Bangladesh’s economy entered the post–5 August phase carrying unresolved vulnerabilities: foreign reserve depletion, inflation, banking-sector fragility, and investor uncertainty. Transitional instability magnified these issues, creating fertile ground for corruption, market manipulation, and economic exploitation.

This article analyzes how the governance crisis intensified economic hardship, institutional corruption, and uneven wealth extraction.

1. Vulnerable Economic Foundations Before the Transition

Years of structural economic weaknesses left Bangladesh exposed:

• Banking scandals had already eroded public confidence

• Government borrowing and debt obligations increased

• Foreign investment slowed due to political uncertainty

• Inflation rose due to global shocks and local mismanagement

• Trade deficits widened

These conditions meant any political transition—peaceful or turbulent—would create economic aftershocks.

2. Market Shock After 5 August: Immediate Economic Effects

Immediately after the transition:

• Liquidity tightened as depositors withdrew savings

• Importers faced delays in LCs due to currency instability

• Business confidence declined sharply

• Transport disruptions increased logistical costs

• Prices of essentials skyrocketed

These were not intentional outcomes but rather the natural consequences of uncertainty and weakened administrative control.

3. Rise of Opportunistic Market Manipulation

In periods of instability, markets become easier to exploit.

a. Syndicates Accelerated Price Manipulation

• Artificial shortages of rice, oil, sugar

• Hoarding of basic commodities

• Rapid price hikes in both retail and wholesale markets

• Smuggling of essentials across borders

Weak market monitoring allowed syndicates to operate with impunity.

b. Corruption in Subsidy and Relief Distribution

Reports indicated:

• Misallocation of relief goods

• Local-level political capture of food aid

• Bribes demanded for access to social safety nets

• Diversion of subsidized goods into black markets

Such corruption intensified public frustration.

c. Banking Sector Instability

Banks experienced:

• Increased non-performing loans

• Poor oversight as regulatory attention shifted to political stability

• Collusion in loan approvals

• Money laundering through under-invoicing and over-invoicing

Financial institutions became vulnerable to predatory behavior.

4. Breakdown of Revenue Systems and the Rise of Informal Extraction

Customs and Ports

Corruption surged due to:

• Reduced central oversight

• Officers exploiting confusion

• Rise of informal payments to clear goods faster

Local Government Revenue

Municipalities saw:

• Informal toll collection

• Unauthorized taxes

• Extortion in markets and transport hubs

Land Administration

Weak supervision enabled:

• Illegal land occupation

• Irregular land transfers with forged documents

• Bribery for mutation and registration

These practices represent structural governance failure.

5. Investment Freeze and Capital Flight

Investors—both domestic and foreign—responded to transitional instability by:

• Canceling scheduled investments

• Pausing manufacturing expansion

• Moving funds to safer jurisdictions

• Delaying startup launches and export contracts

The garment industry, the backbone of exports, suffered from:

• Delayed shipments

• Worker unrest

• Supply-chain disruptions

• Lower buyer confidence

Investor sentiment hinges on predictability; during this period, predictability was absent.

6. Widening Inequality: How Transitional Instability Hurt Ordinary Citizens

Economic hardship disproportionately impacted:

• Daily wage earners

• Small traders

• Farmers

• Informal-sector workers

• Low-income urban households

Their challenges included:

• High food prices

• Loss of employment

• Reduced purchasing power

• Limited access to healthcare

• Increased reliance on debt

Meanwhile, economic opportunists benefited from:

• Market manipulation

• Informal toll systems

• Arbitrage in essential goods

• Corruption-enabled resource capture

This widened the gap between elite groups and vulnerable citizens.

7. Pathways to Economic Stabilization

Bangladesh requires:

• Anti-corruption audit teams independent of political influence

• Restoration of investor confidence through policy continuity

• Strengthening central bank autonomy

• Price monitoring mechanisms

• Reforms in customs, VAT, and land governance

• Transparency tools for procurement

• Social-protection expansion for the most vulnerable

Economic stability requires institutional—not personal—solutions.

Conclusion

Corruption and economic disruption after 5 August were the result of institutional fragility amplified by political uncertainty. The crisis revealed the urgent need for durable, depoliticized economic governance capable of surviving leadership transitions.

ARTICLE 3 — SOCIAL UNREST, HUMAN-RIGHTS RISKS, AND PUBLIC INSECURITY DURING THE POST–5 AUGUST PERIOD

Introduction

The post–5 August period marked one of the most unstable phases in Bangladesh’s social landscape. With the public unsure of the direction of the state, longstanding social tensions resurfaced, new conflicts emerged, and human-rights conditions deteriorated due to weakened oversight.

This article examines the social dimensions of unrest during this period: community violence, breakdown of mediation systems, targeting of minorities, gender-based violence, and erosion of civic safety.

1. Social Tension Under Transitional Uncertainty

Transitions create fear. Fear creates rumors. Rumors create violence.

In Bangladesh, pre-existing polarization meant any leadership change—no matter the type—risked igniting dormant tensions.

Factors fueling unrest included:

• Revenge violence between partisan groups

• Breakdown of local dispute-resolution systems

• Misinformation campaigns on social media

• Distrust in law enforcement

• Uncertainty about future political alignments

Violence was not coordinated by a single actor; it emerged from a vacuum of authority.

2. Escalation of Community-Level Violence

Political Clashes

After 5 August:

• Political activists clashed with opponents

• Supporters of different factions engaged in turf battles

• Vandalism targeted party offices, homes, and businesses

Mob Justice

Weak policing triggered:

• Public lynchings

• Vigilante groups

• Attacks based on rumors of theft, blasphemy, or political affiliation

Looting

Markets, shops, and transport vehicles faced:

• Coordinated looting by criminal groups

• Opportunistic theft by local gangs

• Destruction of property during protests

3. Increased Risks for Women and Marginalized Groups

Periods of instability often increase gender-based violence. Reports highlighted:

• Rise in sexual harassment and assault

• Domestic violence escalation due to economic strain

• Limited access to police protection

• Difficulties accessing justice mechanisms

Minority communities faced:

• Targeted intimidation

• Attacks on places of worship

• Forced displacement

• Property destruction

Such incidents reflect systemic vulnerability, not the intent of transitional leadership.

4. Weakening of Human-Rights Monitoring Mechanisms

Human-rights organizations reported:

• Reduced access to detention centers

• Difficulty tracking extrajudicial violence

• Slow or absent investigations

• Breakdowns in documentation processes

Transitional governments often deprioritize rights protection in favor of political stabilization. This occurred here as well.

5. Media, Misinformation, and Public Panic

Misinformation Circulated Rapidly

Rumors included:

• False reports of political reprisals

• Invented stories of community attacks

• Claims of impending state collapse

• Manipulated videos to incite violence

Media Under Pressure

Journalists faced:

• Threats from political groups

• Restricted access to conflict zones

• Self-censorship

The information vacuum magnified public fear.

6. Breakdown of Social Cohesion

Neighborhoods fragmented because:

• People feared association with political factions

• Trust between communities weakened

• Economic hardship deepened social resentment

• Religious tensions were exploited by opportunists

Social cohesion—an essential part of peace—was severely strained.

7. Rebuilding Social Stability: Necessary Steps

Bangladesh requires:

• Community reconciliation programs

• Protection mechanisms for vulnerable groups

• Independent human-rights monitoring

• Rapid legal reforms to protect victims

• Media literacy campaigns

• Revival of local mediation councils

• Depoliticization of security forces

Transition periods must prioritize human security above all else.

Conclusion

The unrest following 5 August was not a product of personal leadership failure but a symptom of deep societal fractures exacerbated by institutional weakness. Durable stability will require rebuilding trust, strengthening rights protections, and restoring credibility in state institutions.