With elections due at the end of 2023/early 2024, it was always going to be a politically charged year. Thanks to the sanctions imposed by the United States on elite force RAB and some of its informer and current officials in December 2021, it was was also well-known that Washington in particular, and the international community in general, was set to take an unusual amount of interest in the next election, which simply wasn't the case in 2018 or 2014 for that matter.

The stakes were set out early on, with a visit by the US Assistant Secretary of State Donald LU in January. Lu and the delegation he led held a flurry of meetings with top government officials, labour leaders, and representatives of civil society. In official talks, both sides had discussions on a diverse range of issues including trade, investment, labour issues, human rights, democracy, development, security, as well as other bilateral and regional issues. But the opposition BNP may have taken a cue from this visit itself of the disappointment they were bound to suffer through over-reliance on the US as no meeting materialised between them and Lu's delegation.

Lu visited Dhaka to brief his hosts on the United States' new South Asia policy. Washington would, henceforth, deal with South Asian countries directly and bilaterally which will replace what had existed from the start of the war on terror under which Washington had used the Indian prism for dealing with the South Asian countries except for Pakistan.

This would be within the overall ambit of the US's new Indo Pacific Strategy to counter China's growing influence, in which Bangladesh was just one of many theatres.

There were signs of a warming of relations which had somewhat soured after an incident involving the US ambassador to Bangladesh the previous December, as well as the sanctions on RAB. Lu has said as much, stressing that he had travelled to Bangladesh to "strengthen friendship". In their discussions, both sides laid out their priorities and concerns, and pledged to continue working together. On the question of restoring the GSP facility for Bangladesh, which the US had suspended after the Rana Plaza collapse, Lu said he was "very confident we're going to make progress this year."

That has not happened, and by the end of the year there was more concern of the US possibly imposing sanctions on Bangladesh's garment industry. The fact that the US was taking an interest in the elections became more pronounced in May, with the announcement of an unprecedented visa policy for Bangladesh. Under this new policy, the United States will be able to deny visas to those who obstruct the election process in Bangladesh.

The actions to be considered "obstructions" to the electoral process and those who will come under it are clearly laid out. Vote rigging, voter intimidation, the use of violence to prevent people from exercising their right to freedoms of association and peaceful assembly, and the use of measures designed to prevent political parties, voters, civil society, or the media from disseminating their views, are listed as acts of obstruction. Those who will come under the purview of the new policy include current and former Bangladeshi officials, members of pro-government and opposition political parties, and members of law enforcement, the judiciary, and security services.

Later in a follow up announcement in September, the US announced that they had started implementing the policy, which was taken to mean it had been applied against some individuals. In line with US law however, their names would not be disclosed to the public. It fuelled an entire cottage industry of rumour-mongers on social media platforms, as various figures including the PM's adviser on private sector and industry Salman F. Rahman MP, the vice chancellor of Dhaka University, and the chief of the Air Force were all speculated to have fallen victim to these sanctions at various times, only for the claims to be later disproven.

To this day, it remains unknown who may have been slapped with these visa restrictions, and it is questionable how effective they have been, given the kind of election we are about to witness, that the opposition has boycotted. One of the questions that persisted throughout the year was over the role India would play, in the wake of some of the US actions we spoke about. The eternal allies of the Awami League would tread this issue carefully. Publicly, they hardly made any statements to contradict the US, with whom they are intent on building a new partnership for growth in the 21st century, overcoming some of the shackles of non-alignment that held them back in the 20th.

But as the year progressed, it was clear that New Delhi would use the other tools at its disposal to back up its horse in Bangladesh. One of those happened to be the prominence it gave to the prime minister at the G20 conference it hosted in September, attended by most of the important world leaders including Joe Biden. Looking back, it may be concluded that it was during the period of September 8-12, that included the G20 Summit in Delhi sandwiched in between visits to Dhaka by Russian Foreign Minister Sergey Lavrov and French President Emmanuel Macron, that the tide turned within the international community in terms of accepting another term for Sheikh Hasina in power in Bangladesh, irrespective of the kind of election that leads to it.

The US acceptance of the status quo became more apparent in the months of November and December, as the previously very active Ambassador Peter Haas withdrew into silence and went on vacation twice, even as most members of the BNP's leadership were locked up in politically-motivated cases, precluding their participation in the election even if they wanted to.

We also saw the prime minister throw herself about in efforts to ensure new alliances for Bangladesh, as a means to building absorption capacity for her government, should the US take any drastic steps following the election. This saw her visit the Middle East on multiple occasions and even visit the BRICS Summit in South Africa, although Bangladesh wasn't ultimately included in the six new countries invited to join the group. The outreach to the Middle East however did secure some new investments and assurances on energy supplies.

The economy

The government is hoping to return the economy to its pre-COVID growth momentum by the end of the current fiscal (2023-24), although that presents a significant challenge in the face of a clutch of economic headwinds. The Bangladesh government's vision for economic recovery is outlined in the "Medium Term Macroeconomic Policy Statement 2023-24 to 2025-26," prepared by the Macroeconomy Wing of the Finance Division, under the Finance Ministry.

It maintains that with the onset of the pandemic in 2020, the economy was knocked off its fast-paced growth trajectory for large parts of the last three years. The first confirmed cases of Covid-19 in Bangladesh were reported in March 2020, less than three months after the outbreak in Wuhan.

Recently published quarterly GDP data (in keeping with a condition set by the IMF) bears this out. It reveals that the economy contracted by a massive 7.86 percent in the last quarter of the 2019-20 fiscal (April to June 2020), as the virus spread throughout the globe.

According to the quarterly data released retrospectively by the Bureau of Statistics (BBS), GDP had grown by between 6.5 to 8 percent in the first three quarters of 2019-20. That reflects the extent to which the wind was knocked out of the economy by the negative growth (contraction) in the fourth quarter.

The slump induced by Covid would keep economic performance depressed through the first two quarters of the next fiscal (2020-21). It wasn't until the 3Q (January to March, 2021) that the first signs of a recovery would become visible.

As the 2021-22 fiscal kicked in, Bangladesh looked ready to put Covid-19 behind it, having implemented a successful vaccination programme and lifted lockdown restrictions. The economy rallied robustly, and GDP growth touched 10 percent in the third quarter (January to March 2022).

Yet even as the recovery was underway, the seeds for it to stumble were sown halfway across the globe, with Russia going to war in Ukraine in February 2022. The resulting volatility in international energy markets and supply chain disruptions would knock the momentum out again of the country's post-Covid recovery.

Although there was nothing like the contraction precipitated by Covid-19, the economy did experience a severe slowdown in the last quarter of FY22, slipping to just 2.6 percent from the previous quarter's high of 10 percent.

"Bangladesh also braced for impacts on its economy. However, actual data shows that Bangladesh did impressively even during the height of the Covid-19 outbreak and is expected to return to pre-Covid growth trajectory by the end of FY 2023-24," the statement surmises.

If everything goes according to plan and 'assumptions hold', it says that 8 percent GDP growth rate can be attained again in 2025-26. "Therefore, the deviation of the actual from the planned growth envisaged in the 8th FYP (Five Year Plan) remained small," it said.

The Macroeconomic Policy Statement mentions capital accumulation is key for development and hence the government aims to foster private investment along with public investment towards fulfilment of its goals. To achieve the long and medium-term growth targets, the level of investment will need to be increased further.

The statement points out that there is room to increase the implementation rate of public investment. If the pace of implementation of development projects can be increased, the required level of investment can be attained.

"Recognising this, the government has taken steps to bring about some structural changes in both project design and implementation levels," it says in the statement.

The Finance Division document said that the Russia-Ukraine war has put global energy supplies at risk. Russia is a major global supplier of energy and hence when the war broke out, commodity prices spiked fast.

Bangladesh started to suffer from this like almost all other countries. By December 2022, point-to-point inflation rose to 8.7 percent and then further rose to 9.3 percent by March 2023.

However, global commodity prices are already falling, and central banks have raised policy rates and because of this it is expected that inflation will come down in the coming months.

The IMF has projected that the measures taken by the governments will help reduce inflation in the medium-term. The Finance Division has projected that average inflation will fall significantly to 6.0 percent in 2023-24, although there has been no indication of it through the first quarter (July to September).

In order to tame inflation and protect the incomes of the poor, the government has emphasised increasing the domestic production of essential items, while gradually tightening monetary policy.

The International Monetary Fund staff mission that visited Dhaka in October to carry out a scheduled assessment, raised four burning issues in their meetings with the Bangladesh Bank and the Finance Ministry. During the meetings, the IMF mission, led by its chief Rahul Anand, presented reports in which they highlighted the government's progress under the $4.7 billion loan programme that was approved by the IMF board in January, and also the country's recent economic development.

At the meetings, the IMF team wanted to know the reasons behind Bangladesh's high inflation rate when many countries around the world managed to bring down their price levels. The concerns were raised mainly focusing on the dwindling foreign currency reserves, persistent inflation, the state of the banking sector and the lag in revenue collection.

In the first three months of the fiscal year, inflation averaged 9.75 percent, according to data from the BBS. Finance Ministry officials, led by Finance Secretary Khairuzzaman Mozumder, pinned the blame for prolonged high inflation on the steep currency devaluation, import controls and high commodity prices in the international market.

In order to tame inflation, it was explained that the government has introduced 'market-based' interest rates, and raised the policy rate in July as part of that move. This may have been too little too late of course, and the IMF officials correctly pointed out that many countries raised their interest rates much earlier. They also called for further rate rises (they got it too, as we'll see).

The IMF mission also wanted to know the reasons behind the failure to maintain the stipulated minimum net international reserves of $24.46 billion on June 30 - listed as a mandatory requirement to get the second tranche of the loan authorised. In response, the Finance Ministry officials said the reserves were depleted due to fulfilling payment obligations for essential imports as well as for loan servicing.

Bangladesh Bank Governor Abdur Rouf Talukder, who held a separate meeting with the IMF delegation, also gave similar explanations for failing to meet the minimum requirement on the reserve amount. What we didn't get from either the central bank or the ministry was any assertion that the stipulated target was unrealistic to begin with, in the prevailing circumstances.

The reserve situation isn't helped of course, by the continued downward slide witnessed in the flow of inward remittances, which in September fell by a whopping 12.7 percent ($ 196 million) year-on-year, to a paltry $1.34 billion - the lowest in almost 3-and-a-half years.

It will lead to further concern over the declining trend in remittances, even as the country sends more and more workers abroad. The remittance flow in September decreased by $255.79 billion compared to August, Bangladesh Bank's latest remittance data reveals.

The expatriates sent close to $1.6 billion in remittances in August, itself the lowest in six months, since February when it was $1.56 billion. Yet the flow decreased even further to $1.34 billion in September, the lowest in the last 41 months.

That dates back to when Bangladesh received $1.09 billion in remittances in April 2020. After that, the flow of inward remittance increased sharply even during the COVID-19 pandemic time. Remittance inflow improved slightly in the following months.

Tasked by the central bank, the Bangladesh Foreign Exchange Dealers Association (BAFEDA), and the Association of Bankers Bangladesh have been fixing the price of the US dollar under three different headings since September 2022.

Economist and Chairman of Policy Research Institute (PRI) Ahsan H. Mansur told our sister news agency UNB that it is a 'recipe for mismanagement of the economy'. He said the expatriates are sending remittances through the illegal channel (Hundi), as the rate of the US dollar is comparatively higher. The situation may not improve soon till the rate of the dollar is similar in the kerb market and banking channel.

Perhaps stung by the IMF team's criticism over its reluctance to use monetary policy to fight inflation, Bangladesh Bank decided to increase the policy rate, also known as repo rate - the rate at which the central bank lends to the banks - by 75 basis points to 7.25%. It was the largest increase in a decade. According to the guidance from Shapla Chattor, banks could now provide loans in the month of October by adding a maximum of 3.5 percent to the reference rate - i.e. 10.75%. It was later raised by a further 50 basis points.

A huge sigh of relief came with the confirmation of the release of the IMF loan's second tranche, following the international lender's board meeting in December. It seemed to ease the reserve situation somewhat, coupled with a separate loan from the Asian Development Bank, and the central bank's purchase of dollars from the banking system.

Under the radar: A record outbreak of dengue

The biggest story of the year that arguably went under the radar was a record-breaking dengue outbreak.

Authorities in Bangladesh have 23 years of experience dealing with outbreaks of dengue, which became endemic to the country at the turn of the century. Yet it would seem their management of the disease keeps getting worse. How else would you explain a 500% jump in fatalities from one year to the next, as Bangladesh has experienced in 2023?

Despite all forewarnings, the customary drives against the breeding of Aedes mosquitoes, undertaken by two city corporations in charge of the capital, never seemed to gather the kind of urgency required. Although DGHS clearly has the mandate to play a central role in the fight against dengue, its activities are confined only to diagnosis and treatment.

As a result, Bangladesh ended up with a record-breaking outbreak. As far back as June, with the year's fatalities still in the 100s, public health experts were urging the authorities to declare a public health emergency in the country for the dengue outbreak. That call still stands today, after 1700 deaths, only as ignored as before.

Apart from the record-shattering fatalities, coupled with an abnormal jump in the case fatality rate (aka known as death rate), two other worrying trends around the disease became well-established this year. Neither bodes well for the future. The first one is that dengue is now pretty much an all-year round concern. The peak may be associated with the monsoon months, but you are never quite safe.Similarly, despite dengue being confined to Dhaka city and its surrounding, eponymous district till 2019 (when the first cases outside the bustling capital were reported), in the space of just four years the disease has successfully established itself all over the country. By late September, only around 45% of the confirmed dengue cases in 2023 had been reported in Dhaka district, of which almost all the cases were recorded inside Dhaka city. Yet this is the first time that confirmed dengue cases outside Dhaka outnumbered those inside. Next year, it means the task ahead for the authorities is set to get even tougher. But there is really no telling if they even let themselves get fazed by such a prospect.

Reports suggest that the presence of Aedes mosquitoes and larvae in rural areas of the country has significantly increased compared to previous years, and these areas lack adequate facilities for the testing and treatment of the virus, and a significant portion of rural dengue patients in critical conditions need to reach facilities in bigger cities, especially Dhaka city, to receive treatment. In this regard, the increasing spread of the dengue virus in rural areas can increase the rate of cases being left untreated, triggering a deadly downward spiral in the healthcare system's most vulnerable points.

A slew of megaprojects

In many ways, the year 2023 may be remembered as the year of megaprojects, as the build-up to the election saw the government rush to inaugurate no less than nine of them in the second half of the year.

The first and most visible of these was the Dhaka Elevated Expressway, that was followed in due time by the Metrorail project's remaining segment, Purbachal Expressway, Bangabandhu Sheikh Mujibur Rahman Tunnel (Karnaphuli Tunnel) in Chattogram, the Airport's Third Terminal, the Khulna-Mongla Rail Project, the Cox's Bazar Rail Link, the Akhaura-Agartala Rail Link, and the Padma Bridge Rail Link.

Additionally, the expansion work of the Dhaka-Sylhet highway under a Tk 16,918.59 crore project started and the work for the country's first-ever underground metro rail line under a Tk 52,561.43 core scheme began in February.