In addition to internal political and economic challenges, Bangladesh’s relationship with India remains strained. The ICG report underscores that tensions with New Delhi show little sign of abating, and the ongoing Rohingya refugee crisis continues to weigh heavily on Bangladesh.

The Brussels-based International Crisis Group (ICG) has warned that political tensions in Bangladesh are likely to escalate as key players negotiate electoral reforms and political influence. The Brussels-based think tank emphasized that the “honeymoon period” for Bangladesh’s interim government has come to an end, raising concerns over the country’s path toward democratic transition.

ICG’s latest “EU Watchlist” report, which identifies areas where the European Union (EU) can enhance prospects for peace, highlights Bangladesh as one of the critical regions requiring international attention. Commenting on the report, Thomas Kean, Senior Consultant on Myanmar and Bangladesh at Crisis Group, stated, “Free, fair, and peaceful polls will be paramount for restoring the Bangladeshi people’s faith in electoral politics.”

The interim government, formed after the ousting of long-serving Prime Minister Sheikh Hasina following a popular uprising less than six months ago, has announced fresh elections. These are set to take place between December 2025 and June 2026. However, with elections approaching, the administration is under mounting pressure to deliver on its promises of democratic reforms, economic stabilization, and improved governance.

Economic difficulties are adding to the strain, as the country grapples with rising prices—an issue ICG attributes to mismanagement under the former Hasina administration. “It will be some time before the Bangladeshi people really see the benefits of ongoing efforts to get the economy back on track,” Kean noted.

Opportunity for Political Reform

In addition to internal political and economic challenges, Bangladesh’s relationship with India remains strained. The ICG report underscores that tensions with New Delhi show little sign of abating, and the ongoing Rohingya refugee crisis continues to weigh heavily on Bangladesh.

Kean pointed out that prospects for repatriating Rohingya refugees remain bleak due to ongoing violence in Myanmar. As a result, the interim government will need to work with international partners to ensure the sustainability of refugee assistance programs. The report also calls on the EU and its member states to maintain their humanitarian response, particularly as international funding has declined in recent years. The United Nations’ 2024 response plan for the Rohingya crisis, for instance, is only 56 per cent funded.

Despite these challenges, ICG sees a unique opportunity for Bangladesh to reshape its political landscape and build a more inclusive and accountable system. Reform commissions have begun submitting hundreds of proposals aimed at achieving these goals, and the success of these efforts will depend heavily on both domestic political will and international support.

Foreign partners, including the EU, have a significant role to play, according to ICG. The report encourages EU member states to provide rhetorical, technical, and financial support for the reform process, ensuring the interim government successfully steers Bangladesh toward democratic elections.

“For the EU specifically, Bangladesh presents an opportunity to support a democratic transition and improve its standing with an important trade partner in a region of critical geopolitical importance,” Kean stated.

Illegally Acquired Assets

ICG also urges the EU to assist Bangladesh in recovering assets allegedly acquired illegally by individuals linked to the previous Hasina government. Many of these assets are located in Europe, and the report suggests that EU member states should take an active role in ensuring they are returned to Bangladesh.

The group further advises European diplomats to push for improved relations between Bangladesh and India. The report suggests that the EU should emphasize to New Delhi that maintaining a close alliance with Hasina’s Awami League is no longer a viable long-term strategy. It warns that India’s perceived reluctance to support the interim government is fueling anti-India sentiment in Bangladesh.

At the same time, ICG recommends that Bangladesh take steps to address legitimate Indian concerns, such as honoring commitments related to bilateral projects initiated under Hasina’s tenure.

Rohingya Crisis

With the US expected to reduce its refugee resettlement numbers and possibly cut aid under a potential Trump administration, the report stresses that EU member states should step up their efforts to support the Rohingya. While the EU remains one of the largest donors to the humanitarian response, some European countries have already scaled back their assistance—a trend that could accelerate further.

Given the likelihood that most Rohingya refugees will remain in camps in southern Bangladesh for the foreseeable future, ICG recommends that the EU work with Dhaka to implement policies that promote refugee self-reliance and reduce the costs of delivering essential services.

Additionally, the group suggests that the EU support Bangladesh’s initiative to host a high-level Rohingya conference later in 2025. It also calls for increased engagement with the Arakan Army, a key actor in Myanmar that is expected to play a crucial role in any future repatriation plans.

Challenges Abound

As Bangladesh navigates this period of political transformation, the international community’s support will be crucial in ensuring a smooth and democratic transition. While challenges abound—ranging from economic instability and strained foreign relations to the humanitarian crisis—the upcoming election represents a significant opportunity for Bangladesh to redefine its political landscape.

ICG’s report makes it clear that the EU and its member states must take proactive steps to aid Bangladesh’s transition, not only to secure democratic governance in the country but also to strengthen their strategic ties in South Asia.

With elections looming, the coming year will be a decisive one for Bangladesh’s future. The success or failure of the interim government’s reform efforts will likely shape the country’s political direction for years to come, making international cooperation and support all the more critical.