Brussels-based International Crisis Group (ICG) on Thursday said the political challenges in Bangladesh are likely to increase this year as political parties and other key players negotiate over reforms and jockey for electoral advantage, stressing that ‘interim government’s honeymoon’ period is truly over.

“Free, fair and peaceful polls will be paramount for restoring Bangladeshi people’s faith in electoral politics,” said Crisis Group's Senior Consultant on Myanmar and Bangladesh Thomas Kean commenting on the “EU Watchlist” published by the group.

He said the ‘honeymoon period’ for Bangladesh’s interim government is now well and truly over.

With elections approaching, Bangladesh’s interim government is under pressure to deliver on its promised reforms, according to the excerpt of the Bangladesh part from the Watch List 2025 “Bangladesh: The Dilemmas of a Democratic Transition.”

Less than six months after a popular uprising ousted long-serving Prime Minister Sheikh Hasina, Bangladesh’s interim government has announced fresh elections, to be held between December 2025 and June 2026.

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Each year, Crisis Group publishes an “EU Watchlist”, identifying where the European Union and its member states can enhance prospects for peace.

This year’s list includes entries on Bangladesh as well as Moldova, Colombia, North Korea, Sudan, the Great Lakes, Ukraine, Syria, Israel-Palestine and Iran. 

The interim government is also under pressure over rising prices – a legacy of former Prime Minister Sheikh Hasina’s “mismanagement” – and it will be some time before the Bangladeshi people really see the benefits of ongoing efforts to get the economy back on track.

“Relations with India remain strained, and there is little prospect of Rohingya refugees returning to war-torn Myanmar any time soon,” Kean said.

Nevertheless, he said, over the next year Bangladesh has a rare opportunity to reshape its national political system and render it more inclusive and accountable.

Reform commissions have started reporting back with hundreds of proposals to this end.

Kean said foreign partners have an important role to play – rhetorically, technically and financially – in supporting the reform process and ensuring the interim government is able to steer Bangladesh through to a national election.

For the EU specifically, he said, 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.

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In the excerpt from the Watch List 2025, Crisis Group highlighted actions the EU and its member states can take to support the country’s democratic transition.

Led by Nobel laureate Prof Muhammad Yunus, the government and its supporters hope the vote will not just restore democracy but also herald a new era in Bangladeshi politics after fifteen years of increasingly autocratic and repressive rule.

The European Union (EU) member states should actively help the Bangladeshi government recover the numerous assets acquired illegally by those who were part of or close to the Hasina regime, said the Crisis Group, adding that many of these assets are in Europe.

Improving the relationship between Bangladesh and India should also be a priority for the EU, said the Crisis Group.

It said European diplomats should emphasise to New Delhi that remaining wedded to the AL is no longer a viable strategy, adding that its perceived failure to support the interim government is only stoking anti-India sentiment within the country and is detrimental to its long-term interests.

In parallel, it should encourage Dhaka not to fan anti-Indian sentiment and to take further steps to address legitimate Indian concerns, such as by offering assurances that it will meet all its legal obligations related to bilateral projects initiated under Hasina.

The Crisis Group said the EU and its member states should strive to maintain their support for the humanitarian response to the Rohingya refugee crisis.

EU backs transparent, inclusive, credible election reforms in Bangladesh

International funding has been declining in recent years, with the UN’s 2024 response plan just 56 per cent funded.

While the EU remains one of the largest donors, some European countries have cut back assistance.

The trend risks accelerating, given the strong probability that the Trump administration will slash the US aid budget, making European funding all the more important.

Similarly, the Crisis Group said, the US is expected to reduce the number of refugees it accepts for resettlement every year; the EU’s member states should strive to resettle more Rohingya.

That said, even in the best-case scenario the vast majority of Rohingya refugees will remain in the sprawling camps that host them in southern Bangladesh for the foreseeable future – and, as mentioned earlier, more could cross over from Myanmar as conflict rages across the border.

The EU should work with Dhaka to adopt policies that foster refugee self-reliance and minimise the costs of delivering vital services, support Bangladesh’s efforts to convene a high-level Rohingya conference later in 2025 and encourage Dhaka to step up its engagement with the Arakan Army, which is now an inescapable interlocutor for any repatriation plans, said the Crisis Group.