Md. Abdullah-Al-Mamun

In the fiscal year 2023 (FY23), Bangladesh’s export earnings from its top five Western trading partners (the USA, the UK, Germany, Spain, and France) fell to 52%—the lowest in a decade. While this decline may initially seem like an ordinary market fluctuation, a closer look reveals that it was much more than an economic anomaly (somewhat political pressure I reckon). The reduction in export share to the USA, Germany, the UK, Spain, and France, which together have accounted for more than half ($29 billion in FY23) of Bangladesh’s export revenue in recent years, was a red flag signaling the collapse of support for the Sheikh Hasina government from the Western bloc. Ultimately, this marked a decisive turning point, with external economic pressure contributing significantly to the eventual ouster of the authoritarian Hasina administration, which had already been facing domestic unrest and political isolation.
Export Reliance

Source: EPB
For over a decade, Bangladesh’s economic rise was fueled by its export sector, especially in the ready-made garment (RMG) industry. The country had strong trade relations with Western markets, primarily the United States, the European Union, and the United Kingdom. Bangladesh’s economy relied heavily on these markets, which provided preferential access to its goods through trade agreements like the Generalized Scheme of Preferences (GSP). As of FY23, 17% of Bangladesh’s total exports went to the United States, with 12.74% going to Germany, 9.55% to the United Kingdom, 6.62% to Spain, and 5.92% to France. This Western bloc contributed significantly to the foreign exchange inflow that sustained Bangladesh’s economic development.
From FY14 to FY22, Bangladesh’s export share to these five countries remained relatively stable, ranging between 54% and 55.6%. This consistency reflected a healthy demand for Bangladeshi goods, particularly textiles and garments, which had long been the country’s economic backbone. The decline in FY23 to 52%, therefore, was not just an outlier—it was the beginning of a major shift in Bangladesh’s political and economic landscape.
Political Tensions Brewing: The Hasina Government’s Troubles
The political environment in Bangladesh had been increasingly tense under the rule of Prime Minister Sheikh Hasina, who had been in power since 2009. While her government initially brought economic stability and growth, it also attracted mounting criticism, both domestically and internationally, for its authoritarian tendencies. Over the years, Sheikh Hasina’s government was accused of clamping down on opposition, stifling free speech, and undermining democratic processes. The elections of 2014 and 2018 were marred by accusations of vote-rigging and manipulation, with opposition parties alleging widespread electoral fraud.
These unprecedentedly negative developments did not go unnoticed by Bangladesh’s Western trading partners, particularly the USA and the European Union. They both have increasingly linked trade relations to democratic principles and human rights standards. Under the Biden administration, the USA renewed its emphasis on promoting democracy and human rights globally. Bangladesh’s deteriorating political climate, characterized by the repression of dissent and allegations of human rights abuses, put the Hasina government on Washington’s radar.
Meanwhile, the European Union, through the GSP program, granted Bangladesh duty-free access to its markets, which was important for the country’s thriving RMG sector. However, the GSP program is contingent upon the beneficiary country’s adherence to human rights and good governance standards. As reports of political suppression and human rights violations in Bangladesh mounted, the EU began to signal that these actions could jeopardize Bangladesh’s preferential trade status. European policymakers, particularly in Germany, which accounted for 12.74% (source: EPB, above chart) of Bangladesh’s exports, expressed growing discomfort with the political trajectory of the Hasina government.
The Role of Economic Leverage: A Tool for Political Change
This decline in export share was not merely a reflection of changing consumer preferences or market forces. Instead, it symbolized a strategic application of economic leverage by Bangladesh’s key Western partners to signal their dissatisfaction with the Hasina government’s political behavior. The decline to 52% in FY23, following years of relative stability, came amid growing Western scrutiny of Bangladesh’s governance record.
The USA, as Bangladesh’s largest export market, was in a prime position to exert pressure. Washington’s criticism of the Hasina government’s authoritarian actions, coupled with its ability to influence Bangladesh’s economy, created a situation where the Hasina administration faced a dilemma: make political reforms or face economic consequences. Historically, the USA has used economic sanctions, trade restrictions, and diplomatic pressure to push for political change in countries whose governance it views as problematic. Bangladesh’s reliance on the US market placed it in a precarious position, with the decline in export share possibly reflecting Washington’s growing discontent.
Europe’s Growing Discomfort: Democracy as a Trade Condition
Europe’s (most powerful countries) role in this pressure dynamic is equally important. While Europe (Western Europe, especially, under the belt of the USA and NATO members) tends to be more subtle in tying trade relations to political demands, its preferences and values are no less influential. The European Union (trade based union among European states), through its trade agreements, has consistently underscored the need for recipient countries to maintain democratic governance and uphold human rights. As Bangladesh began to drift away from these principles, European policymakers, particularly in Germany, France, and Spain, began raising concerns.
Germany, which had become one of Bangladesh’s largest European markets, saw increasing calls for reassessment of trade privileges if the Hasina government continued its authoritarian trajectory. The possibility of losing GSP privileges was a significant threat to Bangladesh’s export sector, as losing preferential access to European markets would significantly increase the cost of Bangladeshi goods, making them less competitive globally. The drop in export share to 52% could be seen as an early warning from Europe that its patience was running thin, with the potential for further trade penalties if no political reforms were forthcoming.
The Perfect Storm: External and Internal Pressure
As external economic pressure mounted, Sheikh Hasina’s government was also facing a surge of domestic unrest. Protests erupted across the country, fueled by widespread dissatisfaction with the government’s suppression of opposition parties, shrinking political freedoms, and economic mismanagement. The opposition capitalized on the growing unrest, organizing rallies and calling for Hasina’s resignation. The government’s inability to address these concerns only worsened the situation, further isolating it both domestically and internationally.
The combination of external economic pressure and internal political turmoil created a perfect storm for the Hasina government. The decline in export share to the Western bloc was a reflection of the diminishing international support for her regime, with key trading partners using their economic leverage to signal their discontent. The 52% export share in FY23 was not just a statistical anomaly—it was a clear indicator that Bangladesh’s most important trading partners were preparing to take a harder stance.

The writer is a ,Department of International Relations Jahangirnagar University