Bangladesh's post-uprising reform drive has largely fallen short of its promise, undermined by a lack of political vision, weak institutional capacity, and the enduring grip of vested interests, a leading economist said Sunday, delivering a sweeping assessment of the country's reform trajectory from independence to the present day.
Debapriya Bhattacharya, Distinguished Fellow at the Centre for Policy Dialogue (CPD), made the remarks while presenting a keynote paper titled ‘Romancing the Reform: The Bangladesh Story’ at the 9th SANEM Annual Economists' Conference (9SAEC) 2026, organised by the South Asian Network on Economic Modeling (SANEM) in Mohakhali.
Opening his presentation, Dr Bhattacharya observed that the word “reform” has become perhaps the most overused term in Bangladesh's contemporary public discourse, invoked as a cure-all for everything from constitutional restructuring to appointments at the Cricket Board.
“It often appears that the country believes that the solutions to all its problems and predicaments lie in undertaking reforms,” he said, cautioning that such optimism must be tempered with analytical rigour.
He described economic reforms as inherently enigmatic, deeply contextual, resistant to stereotyping, and offering no guarantee that past experience will serve as a reliable guide. “All reform agendas need to be prepared afresh conceptually, concretely and cogently.”
Debapriya outlined the multiple objectives that typically drive reform efforts: addressing long-overdue structural inefficiencies such as loss-making state-owned enterprises; managing macroeconomic stress including inflation; resolving policy coordination failures between fiscal and monetary instruments; and complying with international lender conditionality.
Reforms can also be driven, he noted, by less noble motives including short-term electoral calculations or populist subsidy measures before elections.
On measuring reform success, he argued that outcomes must be assessed across four dimensions: direct versus spillover impacts, immediate versus long-term effects, positive versus negative consequences, and overall social return on investment.
Crucially, Debapriya emphasised, reform assessment is “more about perception than measurement” and perceptions vary sharply across different segments of society.
Situating Bangladesh within a broader global context, Debapriya reviewed major reform episodes worldwide, from the Reagan-Thatcher neoliberal turn of the late 1970s and China's gradualist market opening under Deng Xiaoping, to India's landmark 1991 liberalisation under Narasimha Rao and Manmohan Singh, and Sri Lanka's painful emergency stabilisation following its 2022 economic collapse.
He also flagged the phenomenon of reform reversal, citing Russia's post-Soviet drift back toward state capitalism, Hungary's retreat into illiberal governance, and Turkey's consolidation of executive power after 2016, warning that such reversals are not merely historical curiosities but live risks.
Turning to Bangladesh's own record, Debapriya traced a long arc of reform going back to the post-independence era, when the newly born state had to build institutions from scratch, creating Bangladesh Bank, the Trading Corporation of Bangladesh (TCB), and dealing with abandoned properties.
Subsequent decades brought trade liberalisation and market deregulation in the late 1970s and early 1980s, the reorganisation of local government through the upazila system in 1982, structural adjustment programmes in the 1990s, the introduction of VAT under Finance Minister Saifur Rahman in 1992, the launch of the Elderly Allowance social protection programme in 1996-97, the adoption of a managed floating exchange rate in May 2003, and the introduction of the National Identity Card system under the caretaker government of 2007-09. The emphasis on digitalisation from 2010 onwards also featured as a reform milestone.
“Economic reforms are an ongoing process,” he said but one that had been severely disrupted in the years that followed.
The Kleptocratic Interlude
Debapriya reserved his sharpest language for what he termed the “kleptocratic legacy” of the preceding authoritarian era. For over a decade, he said, unchecked corruption, abuse of public resources, and misuse of power flourished under a regime that derived its mandate from fraudulent elections in 2014, 2018, and 2024.
Crony capitalism, he argued, had evolved into outright oligarchy, with ruling politicians, bureaucrats, and business elites forming an anti-development alliance that captured political and economic levers, eroded state institutions, and paralysed non-state actors through intimidation and co-option. “This anti-development alliance blocked reforms, eroded the integrity of state institutions, and paralysed non-state actors through intimidation and co-option.”
The country's celebrated development narrative, he added pointedly, had been built on shaky ground.
“One of the world's most vaunted development stories of the recent period was built on shaky ground and deep-rooted systemic flaws,” he said, echoing the findings of a white paper that had exposed years of deceptive data, reckless macroeconomic management, and pilferage of public finances.
Interim Government: Promise Squandered
Turning to the interim government that took office following the mass uprising of mid-2024, Debapriya offered a frank and largely critical appraisal. He identified three distinct phases in the administration's reform cycle: an initial period of momentum from August 2024 to January-February 2025; a subsequent phase of slowdown and confusion running through September 2025; and a final phase of gradual fading that persisted until February 2026.
He argued that the necessary prerequisites for successful reform were largely absent throughout. The government lacked a clear economic vision or master plan, had no shared understanding of reform priorities at the leadership level, and as an unelected administration suffered from a fundamental deficit of political legitimacy. “Institutional capacity and inter-agency coordination were inadequate. No mechanism was established to build a broad stakeholder coalition in support of reforms. Strategic communication was insufficient. And there was no real-time monitoring or accountability framework to track implementation and impact. Overall, the necessary requisites for successful reforms were largely not satisfied.”
The Ordinance Scorecard
Of the 133 ordinances issued during the interim government's tenure, Debapriya noted that Parliament has so far passed 91 as bills. Twenty ordinances were not approved within the required timeframe and lost legal validity of these, four have been recommended for repeal and 16 are earmarked for review and reintroduction in the next parliamentary session.
Several critical ordinances, he warned, have fallen well short of their potential. The Anti-Corruption Commission Amendment Ordinance remains pending without a clear timeline, with watchdog organisation TIB pressing for urgent revision in line with the commitments of the July Charter.
The National Human Rights Commission Act of 2009 has been reinstated by Parliament after it repealed the interim NHRC ordinances, a move critics warned would weaken the body's independence and compromise its ability to investigate state agencies, particularly in disappearance cases.
The Supreme Court Judges Appointment Ordinance has been recommended for outright repeal, a step that critics warn risks returning judicial appointments to political discretion.
The Prevention and Remedy of Enforced Disappearance Ordinance remains pending without a timeline, leaving legal safeguards against a practice that defined the darkest years of the previous regime in an uncertain state.
The Police Commission Ordinance has not been passed, and while EU engagement on police reform continues, concerns remain over potential government influence on any eventual oversight framework.
The Revenue Policy and Revenue Management Ordinance which had sought to restructure the National Board of Revenue was not approved and is under further review, with critics warning that delays risk reversing hard-won structural reforms in revenue administration.
Banking Crisis and a Controversial Law
Debapriya reserved particular concern for the state of Bangladesh's banking sector and the legislative response to it.
Non-performing loans reached a record 30.6 percent of total loans by December 2025, amounting to Tk 544,831 crore equivalent to approximately USD 44.3 billion. Five severely distressed Islamic banks were merged under state oversight into a new entity, Sommilito Islami Bank, in May 2025, with Tk 35,000 crore in combined government and central bank support. The merged institutions collectively carried Tk 159,133 crore in defaulted loans, with NPL ratios ranging from 56.9 to 96.6 percent.
Four of the five merged banks had been controlled by the S Alam Group, which Debapriya noted accounts for 11 of Bangladesh's top 20 loan defaulters. The Bank Resolution Act 2026, which gave legislative backing to the merger, has drawn sharp criticism for a last-minute amendment that critics say could allow former owners of the distressed banks to potentially regain control under favourable conditions, requiring only a 7.5 percent upfront repayment of bailout funds, with the remainder payable over two years.
“The episode highlights longstanding issues of politically connected lending, weak governance, regulatory capture, and fiscal burdens associated with banking sector rescue efforts,” he said, calling for a clear political statement from the government explaining its legislative choices.
The Road Ahead
On a more forward-looking note, Debapriya acknowledged the BNP's published manifesto commitments on banking reform, including reducing political interference in banking, strengthening Bangladesh Bank's autonomy and supervisory powers, taking legal action against wilful defaulters, expanding depositor protection, a bill covering Tk 2 lakh per depositor was passed on April 10, abolishing the Banking Division, and establishing an Economic Reform Commission.
He identified four critical issues that must now be addressed urgently. Bangladesh must demonstrate credible commitment to reform, particularly as disbursement of the IMF's final loan tranche remains contingent on progress. A Reform Commission, as pledged in the BNP manifesto, should be launched without delay. Reform commitments must be embedded in forthcoming policy and planning documents. And real-time data platforms must be established to allow transparent, public tracking of reform implementation.
Debapriya also announced the launch of the ‘Bangladesh Reform Tracker and Manifesto Watch’ an online platform accessible at bdplatform4sdgs.net, designed to help citizens monitor the country's reform progress against political commitments. “Your country. Your reforms. Your right to know,” the platform's tagline reads.
The conference was organised by the South Asian Network on Economic Modeling (SANEM). Research assistance for the presentation was provided by Maliha Rahman and Khwaja Masham Fahim, both Programme Associates at CPD.