The role of reviewing structural reforms in Bangladesh

১.

Liberalism entered South Asia as the ideological framework of expanding global capitalism. Bengal was the oldest and central region of British India. The expansion of liberalism here revealed an inherent organizational contradiction of modernity—the universal declaration of rights and equality standing in contrast to structural imperialist exploitation. In other words, liberalism functioned here as the justification for a superstructure of discriminatory economic, political, and social restructuring. Through the process of colonial rule, rather than being a doctrine of liberation, liberalism served as a philosophical and economic framework for subordinating South Asia to global capitalism through primitive accumulation and class restructuring.

In Bengal, during the mid-eighteenth century, when the onset of British colonial rule was taking place, precisely at that time in Europe, liberal philosophy and political economy were taking structured form; thinkers like Adam Smith and Ricardo were propagating the concepts of free markets, individualism, and private property. In liberating the peasant tied to the land under feudal rule, this philosophy was a revolutionary ideology relative to that era.

• Primitive accumulation is a stage in the history of capitalism when capitalist relations of production were not yet mature enough to function automatically. It is essentially the process of forcibly divorcing producers from the means of production, thereby turning them into wage-dependent laborers. Simultaneously, this process concentrates capital into the hands of a small group, who subsequently emerge as the capitalist class.

Picture: Lord Cornwallis; initiator of the Permanent Settlement

In Bengal, liberalism legitimized the very same process—at least, as it is argued. For example, one may look at the Permanent Settlement of 1793, which colonial ideologues celebrated as a step toward creating an elite class of property owners. In reality, this reform turned land into a commodity and empowered the zamindar class, whose interests subsequently became entangled with imperial objectives. In Marx's terms, the true driving force of European capitalism was primitive accumulation: the dispossession of peasants from land, the establishment of private property over land, and the integration of labor power into global capital flows. Conversely, the subordination of the colony in Bengal did not produce a bourgeoisie capable of autonomous capitalist development; instead, it created a class of intermediaries tied to colonial rule. The liberal rhetoric of secure property rights concealed the deception of structural deprivation, under which peasants fell beneath the weight of extortionate rents and moneylenders' debts. And as the ultimate consequence of this exploitation, a vast portion of the population was wiped out by famine.

Arriving in the nineteenth century, liberalism also served as an ideological tool in Bengal to establish it as a peripheral region within the international division of labour. Utilizing free trade theory, systematic destruction was inflicted upon Bengal's

 

• Guha, Ranajit. *A Rule of Property for Bengal: An Essay on the Idea of Permanent Settlement*. Paris: Mouton, 1963.

• Marx, Karl. On Colonialism: Articles from the New York Tribune and Other Writings. New York: International Publishers, 1972.

​

The ancient textile industry. British industrialists enjoyed tariff protection in their own country, while so-called 'free trade' was imposed on India; as a result, cheap machine-made cloth flooded the colony like a deluge. The kind of state patronage required to drive a machine-driven industrial revolution had virtually no possibility or opportunity to be realized in Bengal under colonial rule. Alongside the tariff system, the overall uncertain business climate drove indigenous industrial capital to invest in the relatively safer zamindari estates.

While tariff, railway, and other infrastructural developments were underway in Bengal's economy, a philosophical framework aligned with this colonial apparatus also expanded during the same period. The emergence of this new framework is commonly equated with the European Renaissance and referred to as the Bengal Renaissance. However, this renaissance was not inherently an internal or spontaneous awakening of Bengali society (as seen in the European case). It was a kind of reformist project aligned with the interests of British colonial rule. The advances spoken of in social thought were conducted through institutions and frameworks whose objective was a social process of adorning the colony in a limited veneer of modernity while keeping intact the economic foundation of exploitation. This process did not produce a transformative indigenous middle class. Rather, this reform forged a class of landlords, aristocrats, and salaried intermediaries who had absorbed portions of liberal political thought and whose power rested upon zamindari income, bureaucratic patronage, and collaboration with the colonial power. Consequently, the Renaissance was, on the one hand, a moment of intellectual development, and on the other, an instrument for reproducing colonial class hegemony and inequality. They became the bridge between the colonial state and Bengali society; their claims to rights and representation also remained structurally reliant on colonial institutions. Even so, in the latter half of the nineteenth century, a section of the Bengali middle class began utilizing this ideology to critique colonial rule. The 1905 anti-partition Swadeshi movement demonstrates how liberal nationalism could transform into mass resistance. Even then, this nationalism remained constrained. Although bhadralok nationalists raised the demand for political independence, they did not move to reject colonial capitalism or the structural exploitation of the peasant and working-class population. As a result, while liberal nationalism mobilized certain segments of society, it was often detached from the labouring masses. On the other hand, the vast population comprising Bengal's peasants, artisans, and agricultural labourers remained entirely outside the purview of the liberal discourse.

• Bairoch, Paul. *The Economic Development of the Third World since 1900*. London: Methuen, 1975; Bagchi, Amiya Kumar. *The Political Economy of Underdevelopment*. Cambridge: Cambridge University Press, 1982; Sen, Binayak. “Industrial Entrepreneurship.” In *History of Bangladesh, 1704–1971, Volume II: Economic History*, edited by Sirajul Islam. Dhaka: Asiatic Society of Bangladesh, 1992.
• Marx, Karl. On Colonialism: Articles from the New York Tribune and Other Writings. New York: International Publishers, 1972; Sen, Binayak. “Industrial Entrepreneurship.” In History of Bangladesh, 1704–1971, Volume II: Economic History, edited by Sirajul Islam. Dhaka: Asiatic Society of Bangladesh, 1992
• Razzaq, Abdur. Political Parties in India. Dhaka: The University Press Limited, 2022; Chatterji, Joya. Bengal Divided: Hindu Communalism and Partition, 1932–1947. Cambridge: Cambridge University Press, 1994; van Bijlert, Victor A. Vedantic Hinduism in Colonial Bengal: Reformed

​

The most devastating consequences of colonial liberalism became evident in the famine of 1943, in which nearly three million people perished. Amartya Sen demonstrated in his analysis that this famine was not caused by an absolute lack of food, but rather originated from the colonial market mechanism. Wartime inflation, hoarding, artificial scarcity, and liberalism coalesced to make effective state intervention impossible. This famine laid bare the philosophical contradiction of colonial liberalism, under which the market could not be touched even as millions of people starved to death. Marx's insight that "capitalism produces vast accumulation at one pole and acute pauperism at the other" found its tragic validation in this famine.

Picture: An artwork from the 'Famine Sketches' series on the 1943 famine painted by Shilpacharya Zainul Abedin, showing crows and humans eating together from a dustbin

After two centuries of protracted exploitation, the subcontinent achieved independence. However, in that process, the internal class contradictions among the people eclipsed the conflict between the empire and the freedom-seeking masses. In this conflict, the objective of the empire and its subordinate elite class was identical—to preserve foreign dependency and exploitative structures even after independence. Consequently, the Indian independence movement was stained with the blood of fratricide, and independence culminated in a compromise. Following the end of colonial rule,

Hinduism and Western Protestantism. Abingdon & New York: Routledge, 2020; Sarkar, Susobhan Chandra. On the Bengal Renaissance. Papyrus, 1979.

• 7 Sen, Amartya. Poverty and Famines: An Essay on Entitlement and Deprivation. Oxford: Clarendon Press, 1981.

​

Post-colonial states (Bangladesh, and before that, East Pakistan) could not completely break free from the colonial liberal framework. Bureaucratic centralization, the dominance of private ownership, and export-dependent agriculture remained unchanged. Moreover, the very middle class that once criticized imperialism in the vocabulary of liberalism swiftly became the managers of post-colonial capitalism. For the rural poor, the structural realities of colonial liberalism persisted in a new guise.

Although colonial rule formally ended in South Asia, the structural relationship between the imperial core and the former colonies did not dissolve; rather, the mode of hegemony merely shifted. Moving away from direct political governance, the assertion of influence continued through economic, ideological, and geopolitical mechanisms. Within the global capitalist structure divided into core and periphery, post-colonial Bengal (East Pakistan, subsequently Bangladesh) remained part of a global system that reproduces patterns of extraction, dependency, and unequal exchange. Neo-colonialism maintains the continuity of colonial liberalism, albeit through more intricate market systems, international institutions, geopolitical interests, and class alliances. According to Dependency Theory, capitalism develops unevenly, wherein core states systematically impoverish peripheral regions while extracting their surplus. Just as the expansion of global capitalism rested upon the "drain of wealth from the colonies," this exploitation assumed new institutional forms in the post-colonial era as well. Post-colonial regions remained reliant on primary commodity exports, dependent on the import of high-value manufactured goods, and contingent on international capital for development projects. The terms of trade in the global market operate against post-colonial economies, trapping them in low-value production.

Neo-colonial control is also exercised through military alliances, strategic aid, and security cooperation. Military assistance, arms deals, and strategic partnerships tie peripheral states to the geopolitical priorities of the center. As a result, development turns into militarization, where security takes precedence over public welfare.

• 8 Alavi, Hamza. Social Forces and Ideology in the Making of Pakistan. Edited by Ravinder Kumar. Karachi: Oxford University Press, 2002.
• 9 Frank, Andre Gunder. Dependent Accumulation and Underdevelopment. London: The Macmillan Press Ltd., 1978; Amin, Samir. Unequal Development. Sussex: The Harvester Press Limited, 1976.
• 10 Hamza Alavi demonstrates in his discussion how, in the post–World War II era, Pakistan turned into a dependent economy. And Ayesha Siddiqa shows how, by exploiting the structural weaknesses of the state, the Pakistani state ended up becoming a military bureaucracy rather than being established on the foundation of democracy. For details, see: Alavi, Hamza. “The State in Post-Colonial Societies: Pakistan and Bangladesh.” *New Left Review* I/74 (1972): 59–81; Alavi, Hamza. “The Rural Elite and Agricultural Development in Pakistan.” In *Peasants and Classes: A Study in Differentiation in a Pakistani Village*, edited by Hamza Alavi, 1–43. Lahore: Vanguard, 1976; Alavi, Hamza. “The Post-Colonial State: Pakistan and Bangladesh.” In *The Socialist Register 1972*, edited by Ralph Miliband and John Saville, 144–170. London: Merlin Press, 1972; Siddiqa, Ayesha. *Military Inc.: Inside Pakistan’s Military Economy* (Karachi: Oxford University Press, 2007), 58–82.

​

Neo-colonial control is also exercised through military alliances, strategic aid, and security cooperation. Military assistance, arms deals, and strategic partnerships bind peripheral states to the geopolitical priorities of the core. As a result, development turns into militarization, where security takes precedence over public welfare. Sustaining neo-colonial hegemony requires domestic allies. In South Asia, a lumpen-bourgeoisie class comprising industrialists, bureaucrats, and middle-class professionals acts in this regard as intermediaries of global capital. Much like the colonial bhadralok class, this group aligns itself with external interests rather than national developmental autonomy. The colonial economic structure—built upon land inequality, rural debt dependence, and a fragile industrial base—became the inherited baggage of post-colonial states, swiftly locking them into the new global structure. East Pakistan and subsequently Bangladesh became emblems of neo-colonial dependency, founded upon an aid-dependent economy, weak industrialization, reliance on low-skilled exports, and the immense influence of NGOs. Dependency on international financial institutions severely curtails the state's fiscal and political autonomy.

However, despite all this, liberalism is not necessarily a negative development strategy. This is said in the sense that, in modern times, there is no scope to remain isolated from the outside world. Not only trade, but knowledge, technology, and mutual empathy among peoples have increasingly transcended national borders. In that context, what a post-colonial country actually needs to remember is how Smith's 'invisible hand', so effective in Europe, descended upon Bengal's face as an 'invisible fist'. That is to say, the foundation of a moral and liberal economy must be the mutual exchange between one sovereign nation and another—a possibility that was created in Bangladesh in 1971.

2.

In the preceding discussion, it has become evident that the underdevelopment of peripheral countries, including Bangladesh, is a historical consequence structurally linked to the capital accumulation process of the core states of global capitalism. In Bangladesh's case as well, this structural vulnerability or incapacity is the outcome of prolonged colonial exploitation, regional disparities developed during the Pakistani era, and being relegated to a peripheral position in the global market. The transition from formal colonial rule to juridical independence did not abolish Bangladesh's subordinate position in the global capitalist system, but rather created new mechanisms for reproducing structural subjugation.

Just as the extraction of resources from colonies was essential for empires, that necessity did not cease when the colonies attained legal independence. Following Lenin's argument, the expansion of Western capital into underdeveloped regions became a structural imperative as capitalism reached its mature stage. At the core of Lenin's analysis was the surplus capital accumulated in advanced nations. As monopoly corporations gained control over production and drove smaller enterprises out of the market, the domestic market grew increasingly concentrated, and the rate of profit declined. Relatively high wages, regulated labor relations, and limited domestic demand made further profitable investment at home difficult. Consequently, capital flowed into underdeveloped regions where labor was cheap, natural resources were abundant, and regulations and restrictions were minimal, as these conditions naturally turned such regions into sites of higher profits. Imperialism increasingly

• ​Fanon, Frantz. The Wretched of the Earth. Translated by Constance Farrington. New York: Grove Press, 1963.
• 12 Lumpen in the sense that they did not actually become wealthy through their own creativity, but rather accumulated wealth by directly plundering through state privileges. As an example, one could mention the wealthy individuals who built mountains of assets using money borrowed from banks.

established control over the raw materials in these regions essential for industrial production. In this way, in the post-colonial period, the seizure of mines and various industries across Asia, Africa, and Latin America ensured a continuous and monopolistic supply of raw materials for the industrialization of Western nations. Thus, foreign investment, alongside financial transactions, became a means of restructuring global resource flows in the interest of industries in core nations. Furthermore, the expansion of global capital was inextricably linked to geopolitical rivalry. Foreign investment generated spheres of influence, the protection of which necessitated military expansion, the scramble for colonies, and the projection of state power. This dynamic bound the capitalist economy and interstate conflict together, the ultimate culmination of which was the First World War fought among imperialist powers over the redivision of the world.

In overcoming the dependency arising from imperialism to build a self-reliant economy, one must first and foremost acknowledge that merely following the history of Western capitalism is not an imperative trajectory. Rather, as Samir Amin argues, what is needed is 'delinking' from dependency. For, as previously demonstrated, colonialism did not merely forge an economic structure; it also constructed a psychological structure of subservience. Failing to delink from that structure, the middle class of post-colonial nations emulates their former masters—which Fanon identified as the deeper desire of the 'black' man striving to become 'white'. From the middle of the past century onward, the exploration and application of various paths of delinking were observed across newly independent nations. Among these, an influential method was the South Asian development model. In this first-generation development model, the state was placed in the role of the principal driver to effect a rapid transition from agrarian dependency to industrialization. Aiming to break with the remnants of colonialism immediately after independence, Bangladesh adopted just such a distinct, domestically state-led industrialization model, reflecting the developmental thought and aspiration for self-reliance embedded within the Liberation War. The nationalized jute mills, sugar mills, and primary manufacturing industries inherited from the Pakistani era were integrated into a broader framework of state-directed restructuring. The objectives in this case were self-reliance, rational growth, and the organized mobilization of productive forces for national development. However, the implementation of this state-centric strategy encountered severe structural impediments. The nascent state suffered from an acute deficit in technical expertise, a scarcity of trained managerial personnel, and institutional fragility—consequences of Pakistan's deliberate policy of keeping East Bengal underdeveloped. It was within this administrative vacuum that the emerging lumpen-bourgeoisie class became active. Consequently, even well-intentioned state enterprises became crippled by lack of efficiency, political authoritarianism, and organizational weaknesses. These internal vulnerabilities diminished the capacity to withstand external pressures.

• ​Lenin, V. I. Imperialism, the Highest Stage of Capitalism. Peking: Foreign Languages Press, 1972.
• Amin, Samir. Delinking: Towards a Polycentric World. London: Zed Books, 1990.
• Fanon, Frantz. Black Skin, White Mask. Translated by Charles Lam Markmann. London: Penguin Books, 2008.
• Sahota, Gian S., Mahfuzul Huq, Niaz Hossain, and Kalyan K. Sanyal. “South Asian Development Model and Productivity in Bangladesh.” The Bangladesh Development Studies 19, no. 1/2 (1991): 51–87.
• Islam, Muinul. Role of State in Bangladesh’s Underdevelopment. Dhaka: The University Press Limited, 2020; Islam, Nurul. Economist’s Tale: Making of a Nation Bangladesh. Dhaka: The University Press Limited, 2003.
  
  

For this kind of rupture, a revolutionary ruling class is required—one that stands on the side of the people and undertakes revolutionary efforts to overcome the lingering remnants of colonial rule. But in the case of Bangladesh, a reactionary class ascended to power, masking the artifices of exploitation behind faux nationalism or religious sentiment. As Fanon observed, with the departure of the colonizers, the domestic lumpen bourgeoisie steps forward to fill the vacuum—a class lacking commensurate competence or capability. At the same time, they possess no revolutionary inspiration. Consequently, they turn once again to their former masters for shelter. Strategically exploiting vulnerabilities such as fiscal instability, global commodity price shocks, and chronic balance of payments deficits, international donor agencies introduced a new economic agenda in the late 1970s. Under structural adjustment programs, pressure was brought to bear on Bangladesh to privatize state-owned enterprises, slash subsidies, liberalize trade, and realign its development strategy toward export-oriented growth rather than building a domestic market. Though framed as neutral technocratic reforms, these measures restructured the country's industrial priorities, marking a decisive pivot from the post-independence indigenous development project toward a donor-dictated neoliberal order.

The trajectory of this lumpen class over the subsequent five decades demonstrates that the source of their immense wealth was not business, but rather capital built through utilizing state machinery or misappropriating loan money from banks. Furthermore, it lacked an independent democratic foundation to operate such a structure; consequently, it remained dependent on imperialism. From the late 1970s, one of the policies formulated and imposed by the International Monetary Fund (IMF) and the World Bank to restructure the economies of underdeveloped and indebted countries was the 'Structural Adjustment Program' (SAP). Framed in the language of macroeconomic stabilization and development advice, SAP compelled recipient states to adopt measures such as trade liberalization, currency devaluation, privatization of state-owned enterprises, reduction of subsidies, fiscal austerity, and the restructuring of export-oriented production.

• 11 Fanon, Frantz. The Wretched of the Earth. Translated by Constance Farrington. New York: Grove Press, 1963.
• Humphrey, Clare E. Privatization in Bangladesh: Economic Transition in a Poor Country. Boulder, CO: Westview Press, 1990.
  

In the late 1970s and early 1980s, Bangladesh confronted a series of balance-of-payments crises, low domestic savings, and chronic budget deficits. The post-independence nationalizations and state-led development initiatives grew increasingly unacceptable in the eyes of donors and international financial institutions. They came to explain the country's problems as the outcome of state 'inefficiency' and over-regulation. This explanation diverted attention away from structural constraints, unequal exchange, and technological dependence, placing the blame instead on state ownership and intervention.

In keeping with the global rise of neoliberalism, the policies proposed to Bangladesh by the IMF and the World Bank were a familiar package: trade liberalization, privatization of state-owned enterprises, financial sector liberalization, fiscal austerity, and subsidy reduction. These policies were tied to consecutive loan agreements; consequently, access to foreign exchange and development financing was contingent upon compliance with these conditions. One of the central pillars of structural adjustment in Bangladesh was trade liberalization and prioritizing an export-oriented growth strategy. As a result, tariff structures were gradually lowered, quantitative restrictions were lifted, and the opposite course of import-substitution policies was adopted.

Although SAP reforms were framed as technocratic and neutral economic reforms, in reality, they were a mechanism for establishing external control. Here, national policy frameworks were shaped through the leverage of loan conditionalities. This advisory-driven intervention undermined indigenous development strategies and eroded state capacity by imposing market-centric priorities over social or developmental goals. According to dependency theory, SAP integrated underdeveloped nations more deeply into the global capitalist circuit on unequal terms, thereby generating a cycle of dependency in which these countries remained structurally reliant on foreign capital and volatile export markets.

The most visible example of this transformation was the jute sector. Once known as the backbone of East Pakistan's export economy, jute faced declining demand amid global competition and the proliferation of synthetic goods. Instead of strategic restructuring or technological modernization, SAP dictated the withdrawal of state support, thereby exposing the jute sector to global price pressures and forcing it to survive "commercially" without investment. Privatization frequently turned into a strategy for asset stripping rather than revival, and trade liberalization led synthetic alternatives and imported goods to displace jute products even within the domestic market. In response to privatization, mass divestiture proceeded without any critique or review of prior policies. Even in cases where enterprises in potentially viable sectors were underperforming due to a shortage of machinery or expertise, they were handed over to private ownership without any roadmap to make them profitable; as a result, rather than turning around, those enterprises became sites of asset stripping. Consequently, a recoverable jute industry, which could have been a promising sector today in the context of global environmental awareness, was pushed into long-term decline through policy neglect and mismanagement.

The fate of the sugar sector was quite similar. Bangladesh's sugar mills had long sustained the rural economy and generated stable employment. However, SAP-driven liberalization flooded the domestic market with cheap sugar imported from countries like Brazil and India, while public investment in sugarcane development and mill modernization dried up.

• Humphrey, Clare E. Privatization in Bangladesh: Economic Transition in a Poor Country. Boulder, CO: Westview Press, 1990; কল্লোল মোস্তফা, বাংলাদেশের উন্নয়নের রাজনৈতিক অর্থনীতি, ঢাকা: সংহতি, ২০২১।

By withdrawing subsidies, reducing protections, and policy-wise abandoning domestic mills rather than undertaking projects to remedy their skill deficits, those enterprises were destroyed. Entering the 2000s, despite having a functional sugarcane-based agro-industrial system, Bangladesh became overwhelmingly dependent on imported sugar; consequently, a viable sector fell victim to external dictates.

During the period when indigenous industrial sectors were weakening, the garment sector experienced a rapid rise, aligning with the SAP-driven vision of export-oriented growth. The ready-made garment (RMG) industry required less fixed capital, could rely on abundant low-wage female labor, and enjoyed robust global demand due to the Multi-Fiber Arrangement (MFA). Trade liberalization permitted the duty-free import of textiles, machinery, and other inputs, while Export Processing Zones (EPZs) created production enclaves insulated from labor unionization. In sharp contrast to the neglect observed in the jute or sugar sectors, the RMG sector was granted tax holidays, logistical support, and institutional backing. This disparity was structural: while SAP discouraged state involvement in heavy or agro-processing industries, it actively promoted integration into global value chains within labor-intensive sectors.

This restructuring drastically narrowed Bangladesh's export portfolio. An economy that once relied on diverse commodities—including jute, tea, leather, sugar, and basic manufacturing—became reliant on the ready-made garment (RMG) sector for more than 75 percent of its total exports by the early 2000s, a figure that currently exceeds 80 percent. Instead of diversifying into high-value-added industries or developing backward linkages in textiles and engineering, Bangladesh became trapped in a monoculture export sector. Simultaneously, the success of the garment sector deepened import dependency through the procurement of yarn, chemicals, machinery, fabrics, and even packaging materials from abroad. Consequently, the export sector itself became dependent on foreign inputs, while tariff reductions steered the domestic consumer market toward imported goods. Although donor agencies tout the garment sector as a success story, from the perspective of dependency theory, it perpetuates a low-wage, low-value-added specialization. The apparel sector remains heavily reliant on imported machinery, foreign buyers, and global value chains governed by core nations. Rather than being anchored in technological advancement or domestic control over branding and marketing, this sector is founded merely upon cheap labor. The resulting mode of industrial development represents a dependent industrialization, wherein integration into global production networks occurs without fostering genuine technological advancement or economic diversification.

This situation of export compression and import liberalization has effectively transformed Bangladesh into a consumer state. Sugar mills shut down, jute mills fell into crisis, and domestic manufacturers of steel re-rolling, light engineering, and basic consumer goods could not survive the intense competition from foreign products. This was driven far less by consumer preferences than by a policy framework that rendered domestic production nearly impossible. The country's expanding demand for foreign exchange is driven by import-reliant consumption and production, anchored narrowly to remittances and the ready-made garment sector, which have failed to place the macroeconomy on a stable footing.

It is noteworthy here that the state did not withdraw from economic activity. Rather, it selectively supported the sectors favored by global capital. Within this restructuring, the Cottage, Micro, Small, and Medium Enterprises (CMSME) sector—historically the backbone of rural manufacturing and domestic value chains—failed to advance, as it received neither protective policies nor the institutional support necessary for technological upgrading. With the reduction of tariffs and other protections, domestic producers faced fierce competition from imported goods, rendering survival practically impossible for small industries without state protection. Where a comprehensive industrial ecosystem could have developed, unplanned liberalization created a vacuum. Consequently, trade liberalization reinstated Bangladesh as a peripheral economy supplying low-wage labor and primary or semi-processed goods, while impeding the development of a locally diversified industrial base.

Another major directive of the SAP was financial sector liberalization. Under this came the deregulation of interest rates, the easing of controls on capital flows, and opening the banking sector to private and foreign participation. This process was touted as a means to increase efficiency and attract investment. However, in a peripheral economy characterized by weak regulatory institutions, patronage-driven networks, and a fragile system of financial governance, this resulted in heightened credit concentration and capital flight. The liberalized financial regime rendered Bangladesh increasingly vulnerable to global financial volatility and constrained its capacity to adopt counter-cyclical policies. The SAP also mandated fiscal austerity, which encompassed cuts to public spending, reductions in subsidies, and the restructuring of public programs. In Bangladesh, this translated into: curtailing subsidies on agricultural inputs and food distribution, shrinking public investment in infrastructure and industry, and intensifying pressure on the health and education sectors.

The burden of this adjustment had to be borne primarily by the rural poor, smallholder peasants, and the urban working class. The rising prices of essential inputs alongside the contraction of public services converged to further undermine an already precarious foundation of social reproduction. Since 1971, Bangladesh's development trajectory has remained trapped within an uneasy triangle: on one side, a weak post-colonial state; on another, increasingly influential donors and international financial institutions; and on the third, a rapidly expanding NGO sector. The initial state-led approach was swiftly displaced by market-driven reforms, which, while generating export growth centered on the garment sector, simultaneously produced structural vulnerabilities, chronic trade deficits, import dependence, and fragility within the financial sector. To fill this vacuum, NGOs proliferated, supplanting the state's developmental mandate with fragmented, project-based, and quasi-private arrangements. This was, in essence, part of the donor-driven neoliberal reform framework itself, wherein public service delivery is routed through discrete projects, while control over trade, technology, and the broader economy remains insulated from democratic accountability.

The 1972 Planning Commission advocated for a mixed economy and sovereignty in place of aid; however, through the application of liberal policies, microcredit emerged as the principal technology of the NGO sector in the 1990s. Organizations such as BRAC, Grameen, and ASA, which initially formed as relief-oriented bodies, expanded into education, healthcare, legal aid, and micro-enterprises. Donors increasingly channeled funds through them, viewing NGOs as politically neutral and efficient. Yet their extensive proliferation blurred the boundaries between the civic and the state, giving rise to parallel structures of governance akin to post-SAP Latin America and Africa. Although it contributed to expanding women's access to capital, research indicates that among the primary outcomes (or limitations) of such organizations were debt-driven disciplining, high effective interest rates, and limited upward mobility. Microfinance reframed poverty as a financing deficit of entrepreneurship, thereby diverting attention from questions of land, wages, or industrial policy. In the terminology of Dependency Theory, it incorporates the poor into monetary flows without altering property or exchange relations. The relationship between the state and NGOs has oscillated between collaboration and friction. On the one hand, the government regulates NGO funding; on the other, it relies on them for donor projects and service delivery, resulting in a kind of "franchise state" where power is decentralized yet democratic control remains restricted. Overall, while NGOs expanded vital services and introduced innovations in delivery, these do not constitute sustained progress; consequently, the fundamental structures of peripheral development—import dependence, financial vulnerability, and unequal geopolitical relations—remain intact. The institutional success of microcredit obscures its limited structural impact. Dependency Theory accurately accounts for this outcome: NGOs do not resolve the crisis of development; rather, they manage it.

Imperialist stratagems like structural adjustment are, in practice, experienced in the lives of the poor across three distinct levels. The first level consists of loan-financed projects. It is not that people never derive any benefit from these projects; certainly, some among the poor do genuinely benefit. However, improving the economic condition of merely a select few neither eradicates nor significantly reduces poverty. By the donor agencies' own admission, their projects to date have failed to reach the poorest segments of the population. Furthermore, institutions like the IMF and the World Bank utilize 'leverage' over the overall direction of national policy. Working alongside the government, such regulatory bodies can compel it to abandon progressive policies and push forward with severe austerity programs. An illustration of this can be seen in the wholesale privatization of nationalized enterprises in Bangladesh, where no roadmap was presented as to how these institutions were to become profitable. The second level is sector-specific reform. For example, when extending loans for any infrastructure project in the country, agencies frequently demand modifications in legal and tax policies to facilitate foreign investment. Analogous processes operate across other sectors. Where foreign investment is prioritized over the welfare of the poor, poverty within the sector and across society may deepen, even though bank policies rarely take such outcomes into account. Finally, there are the country's structural conditions. Many projects have proven detrimental to the poor not as a direct failure of such reforms, but rather as the product of internal societal inequality, corruption, and injustice. Nonetheless, these reforms bear responsibility here as well: by upholding an unequal, discriminatory order and prioritizing foreign investment when extending loans or executing reform projects, they reinforce a system that, rather than exerting leverage on behalf of the poor, perpetuates poverty and inequality.

Altogether, considering the perspective of a prolonged history of liberalism, placing the colonial era and contemporary structural reforms side by side leaves limited room for comfort. It remains necessary here to contemplate an outline of development derived from local history capable of overcoming the vestiges of colonialism.

**Author Bio:** Abid Nahar Khandaker. Graduate in Economics from the University of Chittagong. Professionally engaged in finance and banking, as well as working as an independent economic analyst. His research interests include economic theory and application, economic history, and Marxist class analysis. Published work: *Ekush Shatake Punji* (Bengali translation of Thomas Piketty's *Capital in the Twenty-First Century*; 2022, Dhyu Prokashoni & Shamajpath). Currently, a book titled *Economic History of Bangladesh* is under review for publication. Email: abid.cuniv@gmail.com