Prime Minister Sheikh Hasina has dominated Bangladeshi politics for well over a decade now. Yet, now her position is getting wobbly, as the Bangladesh Nationalist Party (BNP), the principal Opposition party, has organised several protest rallies across the country to capitalise on the growing economic distress. It hopes to corner the ruling Awami League government and its leader in the run-up to the general election slated for next year. The protests were initially sparked by hikes in fuel prices and frequent, lengthy power cuts because of the fuel shortage, but has since taken a different turn. The BNP has now charged the Sheikh Hasina-led government with violating human rights and gagging the media – a charge which is finding traction with western countries and human rights bodies. It is demanding the installation of a caretaker government, as it alleges that the Awami League dispensation is not capable of either managing the economy or allowing fair and free elections. India, which has a lot at stake in the stability of Bangladesh, has so far chosen to watch the situation in silence, as has China intent on establishing a geopolitical grip on Dhaka. Policy challenge As elections loom large, the situation in Bangladesh presents a serious foreign policy challenge to India, which will fully unfold in 2023. What if the BNP comes to power? Is a Sri Lanka type of macro-economic breakdown possible? Some experts feel that the situation calls for a calibrated behind-the-scenes intervention by India. While Bangladesh continues to post impressive GDP growth numbers, its economy is facing pressure from several quarters, forcing it to reach out to the International Monetary Fund (IMF) for help. Bangladesh will receive assistance worth $4.5 billion (about Rs37,000 crore) from the IMF. To receive IMF loan assistance, Bangladesh has to comply with several conditions and introduce reforms in the financial sector. A decade ago, Bangladesh had received an extended credit facility of $1 billion from the IMF in seven instalments. One of the conditions, on the contrary, was to enact Value Added Tax (VAT). The government of Bangladesh will now have to deal with several new conditions imposed by the IMF. This has become the subject of a lively debate. Analysts are debating how far the IMF's reform proposals and conditions can provide a solution to Bangladesh's ongoing economic crisis. Some say that the reform proposals and conditions that the IMF is imposing to overcome the current crisis will be helpful in stopping various irregularities in the financial sector. Others feel that several of the reform proposals may intensify the crisis. IMF prescription What are the IMF’s reform proposals? On 26 October, a visiting IMF delegation held three separate meetings with Bangladesh’s Ministry of Finance, where the issue of reducing the subsidies given by the government in various sectors came up. According to local media reports, the IMF has asked for reforms in the management of gas, electricity and fertiliser subsidies. This reform means reducing the subsidy. The organisation has sought a time-bound plan from the government in this regard. Apart from this, they sought to know the plans to divest the big government companies, which are kept running with subsidies, to the private sector. The visiting team also sought to know the trends in the actual spending on education and health sectors from allocations to the social security sector. Besides, the IMF has asked to know about the government's plans to release the subsidies to loss-making state-owned enterprises in oil, electricity, fertiliser and gas sectors. "The economy of Bangladesh is not in a position to negotiate on whatever terms the IMF sets,” assesses Mohammad Helal Uddin, professor, economics, Dhaka University & director (research), Centre on Integrated Rural Development for Asia & the Pacific (CIRDAP). “So, Bangladesh has to take a loan.”