Bangladesh’s debt burden is inextricably linked to the nature of its political system. Over the decades, authoritarian and autocratic regimes have forced rapid increases in debt. During General Ershad’s regime, between 1982 and 1990, foreign debt more than doubled. Under Sheikh Hasina’s oligarchic rule, the debt surged by 322 percent, rising from $23.5 billion in June 2009 to $99 billion in June 2023. State patronage has been systematically weaponised to cling to power.
The interim government inherited an economy under strain—high inflation, a revenue administration rife with corruption, a sluggish budget, a liquidity crunch in the banking sector, and dwindling foreign exchange reserves.
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