Team Yunus faces a mega fight with Hasina’s mega Kleptocracy

Every time– to be precise– consecutive four times since January 2009, Sheikh Hasina was sworn in as the prime minister, she took an oath to put herself under two key obligations: She was bound by her oath not to favour anyone and abide by a fundamental state policy to take measures to "create conditions in which, as a general principle, persons shall not be able to enjoy unearned incomes."

Fifteen years down the line, the exposure of the instances/allegations of grand scale corruption perpetrated during her rule shows that she followed neither of the two oath bound obligations in clear breach of her oath.

Favouritism became one of the 'general principles' of her government policy. She made sure to install her trusted associates at every political and economic institution regardless of the person's merit, seniority and experience. Judiciary, parliament, educational institutions starting from primary schools to universities, sports and cultural institutions—none was spared from her general principle of favouritism. Her associates were empowered everywhere and ensconced in every place in Bangladesh.

Sheikh Hasina's grand scale of cronyism ensured her continuation in power while robbing/denying the people their rights to elect their government and get their rightful services not for once but for three times. In return, her cronies were allowed to reign freely and accumulate immense wealth and influence by blatantly abusing state powers and looting of public assets.

Unchecked and unstrained rise of her associates in every sector has made Bangladesh an example of crony capitalism that ultimately slid from a semblance of democracy into a bottomless pit of Kleptocracy – a system run by thieves.

In the aftermath of Hasina's ouster from power by a student uprising four weeks ago, the extent of that Kleptocracy is being exposed to public view dotted with numerous outrageous anecdotes.

Only the stories of S Alam who alone robbed most the banking sector, Salman F Rahman, ex-private investment advisor enjoying the status of a minister of the ousted prime minister, ex-IGP Benazir Ahmed, NBR top official Matiur Rahman and 'DB Harun' who accumulated unimaginable amounts of assets, indicate that Bangladesh has become a textbook example of Kleptocracy, notwithstanding the numerous other scams in the financial and other sectors.

Specially notable is Salman F Rahman, also the vice-chairman of Beximco Group, who is accused of stock market fraud and embezzlement of thousands of crores of taka from shareholders through deception, according to a complaint. He misused his influence to obtain around Tk 36,000 crore in loans from public and private banks, embezzled funds, and laundered thousands of crores of taka abroad, said the complaint, ACC sources said. Salman was so influential in Hasina's gallery of rogues that foreign diplomats used to meet with him to get Hasina's attention.

In a latest instance of abuse of power, more than 300 acres of forest land grabbed by a brother of AL leader Hasan Mahmud, who was Hasina's forest and environment minister for 2014-2018 and lastly the foreign minister, were recovered by the forest department in Chattogram only in the first four days of the drive which will be continued.

Fighting such a grand scale of Kleptocracy and recovering the assets plundered and syphoned off by businessmen, corrupt officials and direct associates of Hasina appears to have become one of the toughest jobs for the interim government led by Mohammad Yunus.

Bangladesh is undergoing a diagnosis process to detect the poison in the blood starting from the economy extending to every sector with initiatives being taken by the interim government led by Mohmmad Yunus before applying remedial measures.  

Publication of a whitepaper on the state of the economy and formation of a banking commission to salvage the ravaged sector are among the long term measures so far taken by the government which will outline massive works for reforms needed to be done by the interim government.  

As part of immediate measures the central bank dissolved boards of some banks unlawfully taken over by S Alam group with the help and blessing of the Hasina government. Bank accounts of some suspects are being frozen.

The development expenditure plans drafted by the Hasina government to spend during the running fiscal year appears to be non-reliable to the interim government due to the past government's general policy of favouritism which triggered allegation of mega corruptions in the mega infrastructure development projects implemented during the past regime amid an abnormal escalation of cost.

The interim government has planned to review 13 major projects taken up by the previous Sheikh Hasina administration, worth a total value of Tk52,648 crores.

According to Planning Commission officials, the review includes four ongoing projects for which revised proposals have been submitted, and nine newly proposed initiatives. The goal of the reevaluation is to exclude projects that may not be beneficial or are not urgently needed. Non-essential components of some projects may be removed. The interim government will be making the final decisions, said a TBS report on Friday.

All are preventive measures being taken as immediate actions to save the economy plagued by high inflation and grand corruptions from plunging into a fresh crisis after the fall of the Hasina regime that left the new government with multi pronged challenges to run the country. 

This can never be an easy task for the interim government to overcome the challenges as it will have to depend on the existing inefficient system of laws, investigation agency and judicial system to have the herculean task done. 

How Bangladesh was transformed into Kleptocracy

When Sheikh Hasina was sworn in as the prime minister in January 2009, the first time of her four consecutive terms, she also took oath to "bear true faith and allegiance to Bangladesh, and preserve, protect and defend the constitution."

Before the December 29 parliamentary election, she also made dozens of lofty pledges to the people such as zero tolerance to corruption and extortion and strengthening all democratic institutions including the parliament and judiciary.   

But her rule was in blatant disregard to her oath and electoral pledges. She started politicisation of the law enforcement agencies, judiciary, civil administration and economic and political institution by installing her associates and individuals loyal to her who helped her to stage a one sided parliamentary election in 2014 amid a boycott by opposition parties which recorded unprecedented number of 153 MPs elected uncontested without a single vote being cast.

Her second term as the prime minister began by robbing people's right to elect their government. Since then she did not look back any more. One of the biggest offences against democratic norms is to rob people of their voting rights and Hasina did it not once or twice but three times. During her second five-year term she had effectively put every key economic and political institution under her thumb.

Her associates in the police and the administration helped her party men to stuff ballot boxes the night before the election making the participation of the opposition parties in the election redundant.

Once again, she held a stage managed election in January 2024 in which her party candidate ensured an overwhelming victory before the polling day in absence of the opposition parties.

None of these works was an easy task and none of her associates did her the favour as charity.

In return, many of them were offered lucrative promotions and postings; many of them were given contracts for her government's development projects; her party men were given the local government to rob clean, some of the businessmen were given blank cheques to rob banks. Some of her MPs were allowed to set up banks and to empty the vaults as was the case of Farmers Bank.

One single businessman, S Alam, was allowed to unlawfully take over at least nine banks including Islamic Bank, once the largest and best private sector bank. The bank is now in crisis because of bad health as the businessmen also took out at least TK 75,000 crore by grabbing the boards of those sharia based banks thanks to the blessing of the past central bank governors.

Health of most of around three dozen non-financial institutions [NBFIs] is plagued by default loans and alleged corruption and mismanagement. Known as the Sultan of Swindle, PK Halder and his associates allegedly embezzled approximately Tk11,000 crore from some NBFIs and smuggled the funds out of the country over the course of a decade from 2009 to 2019 'unnoticed'.

Some top officials of Bangladesh Bank, the regulatory body that monitors the financial sector, were allegedly on the payroll of PK Halder to hide the irregularities and corruption.

Like S Alam, others were also rewarded with impunity. Take the case of Abdul Hye Bachhu who robbed the Basic Bank, once known as the best state owned bank, in less than five years after being appointed as its chairman in October 2009.

After court observation,and outcry by experts and MPs in parliament, Bachchu was sued by the Anti-Corruption Commission in around five dozen cases. The investigation of ACC revealed that over Tk 2.65 billion was embezzled and laundered from the bank in that five years.

Though the government assisted the bank with TK33 billion from the budget, the bank could not recover from the shock.

Former finance minister Abul Maal Abdul Muhith compared the embezzlement of BASIC Bank as robbery in and outside the parliament. He mentioned Bachchu for Basic Bank's plight.

The reality is, Bacchu has not been prosecuted in any of the cases. He remained above the law all along.

The banking sector has been plagued by distressed assets of over TK 3.77 lakh crore with fast depletion of forex reserves due to mismanagement of the financial sector over the years.

The culture of impunity enjoyed by the law enforcement agencies brought dangerous consequences. They were not only given the blank cheque to crush the opposition parties and gag dissenting voices, they were allowed to indulge in rampant corruption, extortions and conduct extra-judicial killing as a tool to extort and intimidate resulting in enforced disappearance of around 900 people.

Enforced disappearances were used to suppress political opposition, silence dissent, and create a climate of fear in the country during Hasina's rule.

All along the years, the Anti-Corruption Commission, the Criminal Investigation Department and the Bangladesh Financial Intelligence Unit that were supposed to fight grafts and money laundering, were in deep slumber.

More than three dozen parliamentary bodies known as watchdog to monitor and oversee the functions of the ministries were also paralysed as parliaments formed through stage managed elections since 2014 were put under the absolute control of Hasina who operated unchecked and unstrained to emerge as the supreme leader of her regime.    

The upshot of this is that nobody really knows how much the Bangladesh economy has been robbed by plunderers.

A report of the Global Financial Integrity (GFI), a Washington-based organisation, in 2022 said Bangladesh has seen 'illicit outflow of capital' amounting to $8 billion every year on average. Yet that may be a tip of the iceberg. The whitepaper to be prepared by the interim government may shed more light on the real health of the economy.  

The outcomes of the unstrained chain of corruption kept Bangladesh always at the bottom along with the Central African Republic, Iran, Lebanon, and Zimbabwe on corruption perception index released by Transparency International every year.

On the last index released by TI in January, three weeks after Hasina formed her government by winning another stage managed election, Bangladesh scored lower than in 2008. Among the eight South Asian countries, Bangladesh remained the second-last, only above Afghanistan, in score and rank with a measly score of 24 out of 100 on the latest index.

"Non-fulfilment of the Hasina government's commitment to zero tolerance against corruption, intensified corruption in the public sector, and no effective action against money laundering were among the reasons that left Bangladesh facing a "very serious corruption problem", observed the Transparency International Bangladesh, the local chapter of TI.

The same day then road transport and bridges minister Obaidul Quader said the government did not care about the TI report saying, "TI is a BNP's agent and it says whatever the BNP says."

"This type of agency [TI] has some political interest. These agencies protect the interests of some groups or some countries," he told a press conference at the Awami League president's Dhanmondi political office.

There is more.

Bangladesh ranked second in terms of business bribery risk in South Asia – ahead of only Afghanistan – due to high expectation of bribes, poor transparency, and poor media freedom, according to the 2023 Bribery Risk Matrix released in November last year.

The Rule of Law Index of the World Justice Project unveils the reality on the ground in Bangladesh. The country that scored 0.42 out of 1 in 2015 (scores range from 0 to 1 and ranked 93 of 102 countries on the index) saw a nosedive on the latest one released in October last year where Bangladesh ranked 127th out of 142 countries with a score of 0.38. Bangladesh, along with Pakistan and Afghanistan, scored lowest in the region. The sorry state indicates rule of law was sent in exile.

These strengthen the perceptions that the Bangladesh economic system under the ousted prime minister Sheikh Hasina, from January 2009 to 5 August 2024, slipped from being a market economy and has been characterised by a corrupt crony capitalism which ultimately transformed the country from a democracy into a "Kleptocracy": A country ruled by thieves.

The US sanction imposed on ex-army chief Gen Aziz in May this year under section 7031(C) of its anti-Kleptocracy and human rights law has been the first instance of recognizing that Bangladesh transformed into a Kleptocracy.

The United States has blacklisted him because of his involvement "in significant corruption".

"Aziz Ahmed engaged in significant corruption by interfering in public processes while helping his brother evade accountability for criminal activity in Bangladesh. Aziz also worked closely with his brother to ensure the improper awarding of military contracts and accepted bribes in exchange for government appointments for his personal benefit," it added.

As a result of the blacklisting, Aziz and his immediate family members will be ineligible to enter the US, who was chief of the army during the 2018 parliamentary election which is known as "midnight election."

What is Kleptocracy and how does it work?

Thomas Mayne, a visiting fellow of Russia and Eurasia Programme of Chatham House, in an article in July 2022 wrote the best explanations of Kleptocracy – derived from the Greek for 'thief' and 'rule' – stressing the aspect of 'grand corruption' whereby high-level political power is abused to enable a network of ruling elites to steal public funds for their own private gain using public institutions.

"Kleptocracy is therefore a system based on virtually unlimited grand corruption coupled with, in the words of American academic Andrew Wedeman, 'near-total impunity for those authorized to loot by the thief-in-chief' – namely the head of state."

This is why the structure of kleptocracies is often compared to those of organised crime groups – unlike in a democracy where capital by and large flows down to the people, money in a Kleptocracy is passed up the chain from junior ministers to ministers, then to the head of state and his family, he said.

Hasn't Hasina's regime become a perfect example for the definition of Kleptocracy and the way it worked? Her Kleptocracy is more sophisticated, more authoritarian—and more dangerous compared to those of three decades back such as Suharto of Indonesia, Ferdinand Marcos of Philippines, Sani Abacha of Nigeria and Mobutu Seso Seko of Zaire.