Did Muhammad Yunus Sign Up for Mission Impossible?

The famed economist and Nobel laureate is charged with repairing what remains of Bangladesh’s democracy. But is someone even as accomplished as Yunus up to the task?

By Šumit Ganguly

November 2024

On August 5, as student-led protests swept Bangladesh, Prime Minister Sheikh Hasina Wajed fled her country and took refuge in India. She had held office for a total of two decades, first from 1996 to 2001 and then again from 2009 to 2024. Once a popular leader who promoted economic development, she grew increasingly authoritarian, jailing her political opponents, stifling political dissent, and targeting civil society activists. By the end, she faced little opposition. This was by design: In 2018, Sheikh Hasina had the principal leader of the opposition, Begum Khaleda Zia, locked up on charges of corruption. Only with Sheikh Hasina’s ouster was Zia released from prison.

But the freed opposition leader did not assume the helm of the country. Instead, Bangladeshi economist and Nobel laureate, Muhammad Yunus, was selected by Bangladesh’s president, Mohammed Shahabuddin, to head the interim government. Yunus, founder of the well-regarded microfinance organization Grameen Bank, is highly respected at home and abroad, and protestors of all stripes supported his selection. But whether this modest technocrat can steer the country into a stable and prosperous future remains to be seen.

The task that lies ahead for Yunus is daunting. Sheikh Hasina promoted significant growth and dramatically reduced poverty during her time in office. But the benefits of such growth were unevenly distributed, mostly concentrated in the hands of the powerful and well-connected. Unemployment, especially among the youth, showed no signs of abating. Worse still, her regime became known for extensive human-rights violations, including the forced disappearances of political opponents and the gross abuse of police powers, as it cracked down on political dissent.

Yunus now inherits Sheikh Hasina’s dubious legacy. His credentials in development are impressive: Grameen Bank has done much to alleviate rural poverty through the provision of microfinance, and it was this work that earned him the Nobel Peace Prize in 2006. And, as the founder and administrator of a major enterprise, Yunus presumably possesses some organizational acumen. However, he is a relative stranger to the rough-and-tumble world of Bangladesh’s politics, which grew even more cutthroat under Sheikh Hasina. He has never held public office, elected or otherwise. It remains to be seen whether he is up to dealing with the political interests that will now vie for power.

For one, Yunus faces an uncertain situation with the Awami League, Sheikh Hasina’s political party, which is likely smarting at the dismissal of its leader and the concomitant loss of patronage. At the moment, given the outrage of the students and their allies who forced Shiekh Hasina’s ouster, members of the Awami League may be reluctant to challenge Yunus’s writ. With the dynasty at an end, they will need to find another figure to rally around. Or they could defect to another party in the next election. In any case, these party members could well become spoilers as Yunus attempts to restore order.

Yunus also faces the unenviable prospect of contending with the Jamaat-e-Islami, a Muslim fundamentalist party that wields considerable street power. During Bangladesh’s creation in 1971, the Jamaat-e-Islami had aligned itself with Pakistan’s army and stood opposed to the Bangladeshi independence movement. In the 1990s, the party participated in two governments in concert with the right-wing Bangladesh Nationalist Party (BNP). The Awami League, given its current straits, is unlikely to forge an alliance with the BNP to form the next government, despite being a nominally secular and mostly pro-India party. This could put the Nobel laureate in the awkward position of presiding over a coalition government that includes a Muslim fundamentalist party.

Yunus also must ensure that Bangladesh’s armed forces, and the army in particular, does not still harbor visions of returning to power. The worry isn’t unfounded. As early as 1975, within four years of the nation’s birth, the army had mounted its first bloody coup and killed the founder of the country, Sheikh Mujibur Rahman. Since then, the country has witnessed more than twenty coups and revolts by the military. The military brass’s temptation to leave the barracks may be dampened by the fact that much of the international community supports Yunus — including the United States. The public’s strong distaste for authoritarian rule, especially on the heels of Sheikh Hasina’s ouster, may also stay the military’s hand, even if Yunus and his interim government falter.

These are not the only challenges that Yunus faces. During her extended term in office, Sheikh Hasina hollowed out and politicized every mechanism of governance. She cowed the judiciary, politicized the police, and deployed investigative agencies for partisan purposes. Yunus must attempt to restore the probity and independence of these organizations.

To his credit and that of the interim government, a process of reform is under way. Yunus has already created six commissions to bring about a range of administrative reforms. He has also indicated that elections will not be held until these proposed measures are in place, while nevertheless making clear that he does not want the interim government to stay in office indefinitely.

These domestic tasks alone are demanding enough for any government. But Yunus will also have to navigate the relationship between Bangladesh and its two neighboring behemoths, the People’s Republic of China and India. Over the past decade, Beijing has made significant inroads into Bangladesh. Sheikh Hasina’s government, keen on promoting infrastructural development, had largely welcomed China’s investments, including massive imports of Chinese-made arms, despite a lack of imminent security threats. Beijing made these forays in part to shrink India’s footprint in the country, and it will not easily walk away. Yunus’s government will now have to decide how to handle Chinese investments in areas ranging from infrastructure to defense supplies. Curbing the latter could alienate an important constituency, the Bangladeshi military, which has long had a strong anti-Indian streak within its ranks. Yunus and his colleagues will have to tread lightly, if they dare to tread at all.

Likewise, the Yunus government must demonstrate dexterity in handling relations with New Delhi. In the eyes of a significant segment of Bangladesh’s population, Sheikh Hasina had been too pliant in her dealings with India. Given the two nations’ complex and historic ties, Bangladesh cannot simply turn its back on its neighbor. Yet the new government must demonstrate that it can maintain a degree of independence in its upcoming foreign-policy choices without overtly distancing itself from New Delhi. Otherwise, in the fraught milieu following Sheikh Hasina’s downfall, Yunus’s unelected government could face a backlash from the religious ideological right — especially from those who already harbor ill will toward India.

Yunus has a unique opportunity to end Bangladesh’s fitful history of democratic transitions. His reputation and personal background as a civil society activist and economist of repute allows him to ride the country’s current wave of support for democratic institutions. Indeed, if Yunus can build on this opening, Bangladesh may become a potent example for democratic movements everywhere.

Šumit Ganguly is a senior fellow at the Hoover Institution at Stanford University, where he directs the Huntington Program on Strengthening US-India Relations and is also Distinguished Professor of Political Science and the Rabindranath Tagore Chair in Indian Cultures and Civilizations Emeritus at Indiana University, Bloomington. He is the coeditor (with Eswaran Sridharan) of The Oxford Handbook of Indian Politics (2014).

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