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The US is set to launch economic talks this week with the interim government of Bangladesh, including its leader Muhammad Yunus, as Washington seeks to help one of the world’s biggest garment exporters boost its economy.
The discussions to be held in Dhaka on September 14 and 15 represent the first high-level economic discussions between the US and Bangladesh since a student-led protest movement toppled long-serving authoritarian leader Sheikh Hasina, who fled to India.
Yunus, the 84-year-old Nobel laureate, microlending pioneer and founder of Grameen Bank, took the helm of the interim government as its chief adviser last month and is expected to participate in the talks along with other senior Bangladeshi officials.
The US delegation will be led by the Treasury department and include officials from the state department, the US Agency for International Development and the Office of the US Trade Representative.
“The United States is optimistic that, by implementing needed reforms, Bangladesh can address its economic vulnerabilities and build a foundation for continued growth and increased prosperity,” Brent Neiman, assistant US Treasury secretary for international finance, told the Financial Times.
He said Washington planned to “underscore US support for Bangladesh’s continued engagement with the IMF and other international financial institutions” as Bangladesh “seeks to strengthen economic growth by deepening financial sector reforms, improving fiscal sustainability and reducing corruption”.
Bangladesh, once a star regional economic performer, turned to the IMF for a bailout worth $4.5bn in 2022 after the Covid-19 pandemic and war in Ukraine disrupted world markets and caused its energy and other import costs to soar.
The discussions with the US are expected to span fiscal and monetary policy, as well as the health of the financial system. US officials will also meet representatives of the private sector.
The collapse of Sheikh Hasina’s government last month followed weeks of violent protests during which about 500 people were killed. The turmoil disrupted south Asia’s second-largest economy and its economically vital garments sector, which is the second largest after China and a major employer. Industry officials told the FT last month that some chains had shifted orders to rival producers in south-east Asia.
The US has called on Bangladesh to implement reforms in the industry, including the decriminalisation of trade unions, and Yunus has called for labour reforms to help garment producers win more orders.
Sheikh Hasina’s overthrow was greeted with jubilation from opponents who saw her as a tyrant, but the development was widely seen in India — the ousted leader’s top foreign supporter — as advancing US foreign policy aims that could undermine India’s interests and influence in a country it sees as a leading regional ally.
The events have revived lingering antipathy towards the US in India, which backed Sheikh Hasina’s father Sheikh Mujibur Rahman in Bangladesh’s 1971 war of independence, while Washington supported Pakistan.
Last month, the US state department denied it played any role. “Any implication that the United States was involved in Sheikh Hasina’s resignation is absolutely false,” Vedant Patel, a state department spokesperson, told reporters.