The oligarch’s playbook: A warning for post-revolution Bangladesh

A handful of firms and a fistful of politicians -- this is the widely accepted description of oligarchic economic systems. It is a malevolent alliance that eventually appropriates the national economic pie through skullduggery.

Barring a few exceptions, notably the Keiretsu in Japan and Chaebols of South Korea, oligarchic systems are demonic cabals that adversely affect long-term national development, although there may be considerable growth in the short run. The proof is ubiquitous: from Latin American Caudillos and Venezuela’s Bolibourgeoisie to post-Soviet Russia’s oligarchs, North Korea’s Kim dynasty, South Africa’s Gupta family, and beyond.

The evolution of oligarchies follows a similar script worldwide. Self-serving policies at the population’s expense concentrate massive economic power in an elite coterie. This economic power then fortifies political influence, eroding democratic institutions, undermining judiciaries and constitutions, suppressing dissent, and promoting systematic corruption with impunity.

In Bangladesh, traces of a chosen elite class first became visible in the power and energy sector. The Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 and associated legislation paved the way for oligarchs to gain a foothold.

While massive corruption plagued the power sector, the sudden spike in the availability of electricity had widely beneficial economic impacts. Growth in service and industrial sectors was undeniably impressive for nearly a decade. Mega-infrastructure projects and remittance flows from expatriate workers created an economy that seemed to hold great promise.

However, as oligarchic influence grew, the financial sector became its primary target. Illegal bank takeovers, wilful loan defaults, capital flight, and similar practices became rampant. Simultaneously, government policies on interest rates and bad loan rescheduling were designed at the oligarchs’ behest.

These distortions ultimately had a pernicious economic impact, rendering Bangladesh vulnerable to external shocks. When the Ukraine war disrupted supply chains, the macroeconomy was placed in dire straits.

Bangladesh’s experience thus adds to global evidence that when a small group controls both economic resources and political influence, democratic institutions erode. Laws, regulations, and policies are shaped to protect their interests rather than the public good.

Moreover, patronising an elite group is fundamentally unnecessary -- especially in Bangladesh’s context. The evidence is clear: Bangladesh was built by millions of Bangladeshis.

Five groups stand out: (1) Farmers who tripled agricultural yields since 1972; (2) Entrepreneurs whose emergence in the 1980s transformed industrial and service landscapes; (3) Workers, especially women, who created a global RMG export powerhouse; (4) Expatriate Bangladeshis whose remittances kept the economy afloat during the pandemic and the Ukraine war; (5) NGOs whose innovations since the 1980s added remarkable dynamism to social sectors.

The Monsoon Revolution dismantled both an authoritarian regime and its oligarchic machinery -- a historic blessing for Bangladesh. Now we face a critical choice: either build an economy that honours the millions who actually built this nation, or follow a tired script that resurrects the unholy nexus between politics and business. The former promises genuine prosperity; the latter guarantees another cycle of plunder and decay.

The writer is the chief executive of Renata PLC