Dollar dependence vs economic power politics

The global economy is entering another uncertain chapter as many long-held assumptions about trade and growth lose their footing. Bangladesh is arriving at this moment after years of relying on a familiar economic formula centred around remittances and garment exports. Those two pillars kept foreign exchange reserves afloat and helped the economy grow steadily, creating the comforting belief that the system would more or less take care of itself. That sense of security, however, is now under severe strain as major economies turn away from open trade and multilateralism and lean instead towards assertions of raw power and unchecked national self-interest.
Recent developments in the United States make this shift especially clear because they affect both trade and labour mobility. The United States has implemented a series of protectionist measures, from visa suspensions and new financial bonds for immigrants to direct taxes on remittances which created fresh uncertainty for Bangladeshi workers and their families. Those who have waited years for immigration decisions or who already live and work in the United States now face steeper barriers and also greater costs for sending earnings home. The impact is particularly concerning for Bangladesh given that remittances reached a historic high last year, with the US accounting for 11 per cent of total remittances. Any discouragement of migration or remittance therefore has direct consequences for household welfare and macroeconomic stability.
These measures come on top of earlier trade pressures that had already begun to reshape Bangladesh's external economic environment. Advanced economies are increasingly deploying tariffs as a policy weapon while subsidising domestic firms and raising barriers against foreign producers. The message could not be clearer. They are deliberately narrowing the window for others to earn dollars through traditional means.
For countries like Bangladesh, the cumulative effect is the gradual closing of external doors once taken for granted. Exports run into tariff walls and uncertainty. Migration opportunities shrink under restrictive visa regimes. Even those already abroad are discouraged from sending money home as additional taxes raise transfer costs. This is an existential challenge because the dollar remains the lifeblood of global commerce, essential for importing energy, machinery and essential goods. The nation, therefore, stands at a precipice, forced to confront a fundamental question. If the paths to earning foreign exchange are being systematically blocked, what alternative remains?
Experience from other countries shows how quickly and dangerously such vulnerability can turn into full-blown economic crisis. When foreign currency inflows dry up, inflation can spiral and fuel public unrest. In certain cases, as seen with Iran and Venezuela, external actors have sought to exploit this fundamental dependence on foreign currency by constraining access to foreign exchange in order to intensify internal turmoil. What is emerging is a return to a raw form of power politics where, as the political philosopher Carl Schmitt once argued, the line between friend and enemy is drawn by the ability to dominate. This is an environment governed less by common rules than by the simple reality that big fish swallow smaller ones. In this context, dependence on external income sources is not only an economic risk but also a political one, with direct implications for social stability and sovereignty.
Bangladesh's own development path clearly highlights both the strengths and limits of its current economic model. There is no denying that the garment sector transformed the economy and opened formal employment for millions of women. Likewise, labour migration allowed countless poor families to escape extreme hardship and ensured food security in rural areas. Yet this success also encouraged concentration and complacency about the reliability of external income flows. Too much of the nation's growth has become tied to a single export sector and to overseas labour markets over which Bangladesh exercises little control.
There was a time, before the remittance and textile boom, when manufacturing in Bangladesh was more diversified and more closely integrated with the domestic economy. Industries such as jute, cotton, sugar and other mills provided steady employment and maintained strong links with agriculture by sourcing local raw materials. Over time, many of these enterprises collapsed, not because manufacturing itself lacked potential, but due to inefficiency and persistent losses under a model that offered job security without accountability. Their shutdowns were later used to argue that manufacturing outside the garment sector simply could not work.
That judgement warrants careful reconsideration in today's context. The global environment that once favoured specialisation and openness is giving way to one that values self-reliance. As imports become more expensive and foreign exchange harder to secure, producing essential goods at home starts to make practical sense. Focusing on manufacturing for the domestic market reduces dependence on volatile external income and creates jobs that are less exposed to the whims of foreign political decisions.
Some recent policy moves hint at a cautious return to this way of thinking. After last year's political upheaval, steps were taken to reassess the closure of several sugar mills, including the formation of a task force and the lifting of suspension orders to allow operations to resume. However, reopening factories under the old model would only recreate the same problems that led to their collapse in the first place.
Any serious effort to rekindle manufacturing must be economically viable and fiscally responsible. Public private partnership offers one possible route. Under such arrangements, the state could retain ownership of land and core infrastructure while leasing operational control to a private partner chosen through competitive bidding. That partner would be expected to invest in modernisation, run the facility over a long term, absorb part of the existing workforce and share revenues with the state. Pilot projects of this kind could test whether loss-making enterprises can be turned into productive and financially responsible contributors to the economy. If successful, they would not only conserve foreign exchange but also rebuild confidence in domestic manufacturing.
In the face of growing economic pressure from major powers and the weaponisation of the dollar, turning inward for economic development is the only way forward. The sooner policymakers act on this reality, the better positioned Bangladesh will be to withstand the hostile global economic environment.

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