ON 25 FEBRUARY, the newly formed Bangladesh government under the Bangladesh Nationalist Party (BNP) unceremoniously removed Ahsan H Mansur, the man who had largely stabilised the economy in the turbulent aftermath of the July 2024 uprising that toppled Sheikh Hasina’s government, from the post of central bank governor. Mansur had adopted a tight and prudent monetary policy, raising interest rates to curb inflation while working to stabilise the exchange rate and rebuild foreign exchange reserves. He also initiated major reforms to restore confidence in the banking sector and improve financial governance. He was replaced by Mostaqur Rahman, a cost and management accountant by training, who pledged tighter oversight at the central bank and vowed to dismantle Bangladesh’s entrenched culture of crony credit.
The change has been controversial. While the government claimed that both Mansur’s removal and Rahman’s appointment were “in the public interest”, a writ petition filed at the High Court has challenged Mansur’s removal on the basis of a law that disallows the removal of a Bangladesh Bank governor unless they are found to be incapable or incompetent. Some have been critical of Rahman’s appointment to what is ostensibly an independent post because of his close ties to both industry and the government.
The move points to the new government underestimating the precarity of this moment – a matter of great worry. The BNP, with Tarique Rahman as the prime minister, has stepped into the fractured remains of a decade-long economic distortion that finally buckled under its own weight. The prime minister Tarique Rahman and his administration must realise that the patience of the Bangladeshi public has been depleted. The social contract that Hasina upheld, which once allowed for political repression in exchange for economic mobility, has been permanently revoked by the revolution that toppled her.
Conventional post-mortems of Hasina’s 2024 ouster focus on student-led protests and a surge of civil unrest. However, the collapse of her Awami League government was economic in its genesis, economic in its escalation and economic in its ultimate political fate. Any government that misreads this risks repeating the same terminal error: operating under the belief that the political apparatus failed first when in reality it was the economic foundation that first crumbled. In today’s Bangladesh, the political consequences of economic failure are more severe than ever before – and the performance of the new central bank governor will have great bearing on how the new government fares.