| SNEAK PEEK |
— Why the downfall of Bangladesh’s Iron Lady, Sheikh Hasina, offers a cautionary tale for the West’s own DEI debate.
— Dario delves into the legitimacy of the counternarratives that claim American meddling may have played a role in her ousting.
— Izzy argues that economies that specialise in supplying cheap labour to the world will always be destabilised by elite overproduction.
Good morning subscribers!
We’re still easing back in to the usual state of play. In today’s edition, Dario and I take a closer look at recent events in Bangladesh and what the West can learn from them in terms of management of its own over-educated youth vs job availability challenge. We’ll be back with our broader blind spot sweep next weekend.
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| THE BIG BLIND SPOT THIS WEEK |
HOW DEI POLICY TOPPLED BANGLADESH’S IRON LADY: The ousting of Bangladesh’s Prime Minister Sheikh Hasina earlier this summer serves as a stark warning to the West about the potential consequences of mismanaging its own DEI backlash. Yet, few have drawn a connection between the events in Bangladesh and the West’s ongoing crisis of elite overproduction.
Separately, a counternarrative is growing in Bangladesh that the real source of the consternation wasn’t mass discontent with the regime but, you’ve guessed, American meddling. Given Hasina’s niece, Tulip Siddiq, has just been appointed UK City Minister by the new Labour government and is already under investigation for failing to register rental income from a property in London, affairs in Bangladesh deserve closer scrutiny.
As POLITICO’s James Fitzgerald reported this summer, A Channel 4 investigation in 2019 found evidence that the UK wing of Hasina’s Awami League was running a campaign to support Siddiq’s re-election. The broadcaster obtained video evidence of Siddiq thanking the Awami League for their help getting her elected as a UK MP on two occasions. The Labour MP was also pictured with her aunt, Hasina, alongside Vladimir Putin, at the Kremlin in 2013.
Deadly affair: We last referenced Bangladesh’s Dhaka University student protests in our July 21 edition. In the days following, the country-wide movement escalated further, eventually turning deadly when government forces aggressively turned on protestors. Amnesty International reported that “more than 200 people had been killed in less than 10 days and thousands more injured” and that “few countries have witnessed such a death toll in such a short duration of time… at least 2,500 people have also been arbitrarily arrested and around 61,000 protesters named as accused persons in cases.”
The fallout for Sheikh Hasina, whose 15-year rule had edged the country nearer to one-party rule, proved catastrophic.
On August 5, Sheikh Hasina was spotted fleeing the capital, Dhaka, in a helicopter, apparently in fear for her life, just before legions of protesters stormed the presidential palace. Her official resignation came later that day.
India’s Economic Times later wrote that “around 300 people, mostly students, died over the course of the agitation.”
Interim leadership: Shortly after Sheikh Hasina’s resignation on August 5, the Bangladesh Army Chief, General Waker-uz-Zaman, announced the formation of an interim government to oversee the transition until a new Prime Minister could be democratically appointed. Nobel laureate Muhammad Yunus was named Chief Adviser, tasked with leading the interim administration.
A historical echo: The downfall of Sheikh Hasina bears a chilling resemblance to the fate of her father, Sheikh Mujibur Rahman, Bangladesh’s founding leader, who was assassinated in a military coup in August 1975, almost exactly 49 years earlier. Like his daughter, Sheikh Mujibur had, according to his critics, grown increasingly authoritarian during his time in power. Sheikh Hasina and her sister Rehana were the sole survivors of the massacre that claimed the rest of their family. So, how did Sheikh Hasina’s government, known for its increasingly tight grip on power, unravel so abruptly after 15 years of dominance? At first sight it seems puzzling.
Track record: On paper, Sheikh Hasina’s tenure oversaw significant economic development, with millions being lifted out of poverty. At a UN Assembly in September 2019, the four-consecutive-term (five overall, including 1996-2001) Prime Minister proudly boasted that Bangladesh’s GDP had expanded by almost 200 percent, “from $102 billion in 2009 to $302 billion this year”.
Her government also garnered international acclaim for hosting millions of refugees from Myanmar, winning back-to-back elections based on her programs. In reality, the intensifying competition for government jobs, which pitted various social groups against each other, spoke to the fragility of the country’s economic turnaround, as well as its post-2009 industrialisation.
But much of the country’s economic progress, it turns out, was heavily reliant on the government’s ability to supply Western corporations with large numbers of low-paid textile workers. This economic model, however, was inherently designed to stifle social mobility, offering educated Bangladeshis few opportunities to advance outside of the government sector — a major challenge for Sheikh Hasina’s administration. 
A quick catch-up: Tensions escalated this summer when the Bangladeshi Supreme Court decided to overturn a 2018 ban on the application of quotas in the distribution of civil service jobs. These quotas had been implemented after the 1971 Liberation War to honour and reward those who contributed to the nation’s independence and founding.
DEI on steroids? The policy courted wide resentment, however, since a significant portion of civil service positions was de facto reserved for the descendants of 1971 freedom fighters, leaving limited opportunities for others based on merit. The quota system’s other favoured groups included historically marginalised or disadvantaged groups, such as women, ethnic minorities, people with disabilities, and people from specific rural regions. Students affected by the system argued that the system was unmeritocratic and that it enabled Sheikh Hasina’s Awami League (BAL) loyalists to dominate top civil service positions, thereby undermining democratic principles. In 2018, after widespread student strikes and protests erupted against the quota system, Sheikh Hasina responded by abolishing it and introducing a ban on its implementation.
Meritocracy fail. The ban, however, didn’t change the fact that government jobs remained mostly an exercise in the distribution of surpluses extracted from sweatshop labourers. It wasn’t long before “irregularities” and “corruption” plagued the entry exams and admissions systems that controlled job distribution, leading to calls for the reinstatement of the old quota system. Critics argued that the experiment with “meritocracy” had only disenfranchised those who had sacrificed the most for the country, while also undermining the government’s long-standing goal of fostering national unity.
From bad to worse: While 2018’s quota system had allocated only 30 percent of government jobs for Bangladeshi ‘freedom fighters’ — members and families of those who fought for Bangladesh’s independence from Pakistan — Sheikh Hasina’s rebooted version elevated the figure to 50 percent. This exacerbated the sense of injustice among an increasingly aspirational student class. Widespread protests followed in July. But when tensions reached a boiling point, Sheikh Hasina’s government responded with a harsh crackdown.
Commercial fallout: The ensuing instability rattled international corporations and fashion brands that had secured garment supply contracts with Sheikh Hasina’s government — some of which were reportedly obtained through bribes to party loyalists. According to the Financial Times, many companies swiftly redirected their orders away from Bangladesh, fearing they might be seen as complicit in the government’s repression of students. Their fears were realised when students engaged in retaliatory arson attacks, targeting multiple factories owned by regime loyalists, including suppliers to global brands like Swedish retailer H&M and Spanish chain Zara.
Authoritarian blowback: Ultimately, Western corporate support for Sheikh Hasina’s government proved fragile, likely influenced by the regime’s ongoing tensions with the Biden administration over its weaponisation of the legal system against political opponents. Nearly half of the five million members of the Bangladeshi National Party (BNP) were entangled in politically motivated court cases, including the imprisonment of the party’s former Prime Minister, Khaleda Zia.
Too little, too late: By the time the Supreme Court attempted to placate protesters by reducing the reserved quota for freedom fighters from 50 percent to just 5 percent, the damage to the government’s credibility was already done. Rather than calming the unrest, violence escalated, prompting even more severe and repressive actions from Sheikh Hasina, including military orders to shoot on sight anyone defying the curfew.
Loyalist collapse: By August 4, the army had reached its breaking point. That evening, military leaders informed Sheikh Hasina the military would no longer enforce the government’s curfew, citing their constitutional duty to refrain from using excessive force. Sheikh Hasina’s fate was sealed from then on. The military’s refusal to carry out the curfew and shoot-on-sight orders, along with its eventual turn against the Bangladeshi president, has now become the dominant narrative in both Western and regional media.
Life imitates art: The drama strikingly mirrors the plotline of the new Netflix series The Regime, which stars Kate Winslet as the increasingly erratic dictator of an unnamed central European country brought down by her own megalomania and paranoia. The subplot sees Winslet’s dictator, Elena Vernham — who, like Sheikh Hasina, inherits power from her father — pursuing isolationist policies, while growing hostile to American interests, and aligning increasingly with China.
THE PLOT THICKENS
But was it really that simple? As with many coups, rumours are now swirling that the toppling of Sheikh Hasina was far from an organic movement. Instead, American meddling and geopolitical manoeuvring — reminiscent of the plot in Winslet’s The Regime — are increasingly suspected of playing a significant role in her downfall.
A growing counternarrative, gaining traction online, centres around the strategic importance of St. Martin’s Island, a small but crucial piece of Bangladeshi territory located in the northeastern part of the Bay of Bengal, just 8 kilometres west of Myanmar’s northwest coast. Control of this island is highly coveted by those seeking influence over the Bay, which is a critical waterway for Asian imports and exports, including China’s. According to India’s Economic Times, close associates of Sheikh Hasina claim that the former prime minister confided to them that she would not have lost power had she ceded the island’s sovereignty to the United States.
Growing speculation: Supporters of Sheikh Hasina point to two recent visits by senior American officials as pivotal to the events that unfolded. In January 2023, for instance, Donald Lu, then U.S. Assistant Secretary of State for South and Central Asian Affairs, visited Dhaka and met with the Bangladeshi army chief. In hindsight, this meeting has raised suspicions among Hasina’s allies, given the crucial role the military later played in her removal.
Russia makes it awkward: Further fuelling speculation is a statement made by Russian Foreign Ministry spokeswoman Maria Zakharova in December 2023, before the American visits, warning that the United States was planning to destabilise Bangladesh through an “Arab Spring-like” movement. “There are serious reasons to fear that in the coming weeks an even wider arsenal of pressure, including sanctions, may be used against the government of Bangladesh, which is undesirable to the West,” Zakharova stated.
Territories for sale? Adding weight to the rumours, a report from India’s Business Today alleged that the Bangladeshi Nationalist Party (BNP) — Hasina’s opposition — had considered selling St. Martin’s Island to the United States in exchange for electoral support, potentially allowing the U.S. to establish a military base there. The island’s strategic location means that even a small listening post could enable the US to monitor Chinese naval movements, as well as activities in Myanmar and India.
Rebuffed: Sheikh Hasina’s own son, however, has dismissed the narrative, stating that his mother never suggested the US was behind her removal. Further casting doubt on the narrative is the fact that much of the reporting on this topic comes from Indian/Hindi sources, which are natural allies of Sheikh Hasina. Moreover, it seems unlikely that the US would benefit from creating a power vacuum in the region that could empower Islamist parties. Nonetheless, a recent Washington Post piece reported that Indian officials privately lobbied their U.S. counterparts to ease pressure on Sheikh Hasina after the Biden administration imposed sanctions on her entourage and certain police units for their role in legal actions against the opposition and students. Indian officials warned that too much pressure could lead to the rise of pro-Islamic groups like Jamaat-e-Islami. According to the Washington Post, the Biden administration ultimately heeded these concerns and softened its stance.
Wider repercussions? For decades, India has been regarded as a crucial US ally in the region, particularly as a strategic counterbalance to China. However, U.S.-India relations have already been strained by India’s increasingly hardline governance under Prime Minister Narendra Modi. That means if there is any truth to the rumours that the United States played a role in the removal of the region’s most pro-Indian and pro-Hindu leader, it could further destabilise relations and create significant unrest in the region.
Arguably, it is not.
Across America, a similar bust-up has been brewing in recent years among social classes eager to obtain preferential access to elite bureaucracy jobs. Most of these jobs are a smoke screen for what would in other eras be considered cronyism.
As in Bangladesh, the real tension isn’t really about who deserves to be boosted because of historic grievances or sacrifices impacting their bloodlines, or even because of current disabilities or current disadvantages. It’s over who should be assigned to the epsilon underclass that the bloated crony elite relies on to maintain its privileged status.
