The Rohingya crisis and Bangladesh’s economic downturn

In August 2017, a deadly ethnic clearance operation, backed by the Myanmar military against the minority Rohingya (Muslim) population in Rakhine state, began the displacement of thousands of Rohingyas. By the end of 2017, around 745,000 people had fled to Cox’s Bazar, a district in southeast Bangladesh.

Bangladesh, though not a signatory to the 1951 refugee convention, and despite being a country with a high population density, sheltered and welcomed these forcibly displaced Myanmar nationals on an ad hoc basis. By April 2019, more than 900,000 Rohingyas were living in coastal Bangladesh, and today about 90% of the Rohingya population lives in Bangladesh.

With limited financial resources, Bangladesh, in collaboration with donor and global aid bodies, has worked hard to provide shelter, food and medical care for Rohingya people. But Bangladesh is a least-developed country with a large population and few resources, and cannot handle this influx alone.

The Rohingyas’ statelessness often causes their basic human rights to be denied. Food insecurity leads to malnutrition; anaemia, diphtheria, cholera and scabies are rife; they suffer physically and mentally. In 2022, 40% of pregnant and lactating Rohingya women were anaemic. They lack sanitation, quality housing and basic needs. Human trafficking of women and children, polygamy, and forced prostitution are all common in the Rohingya populations, and 56% of physical violence perpetrated in their camps is by intimate partners.

In September 2021, the Arakan Rohingya Salvation Army (ARSA) – an insurgent group operating in Rakhine state – murdered Mohib Ullah, a prominent Rohingya figure who had been leading protests against the violent actions of ARSA followers inside the camps. These practices include the rape and torture of women, drug trafficking and kidnapping. In April 2019, Reuters reported that 150 women teaching at an NGO-run education centre had resigned after threats and beatings by one camp resident who was believed to be ARSA member.

Limited freedom of mobility means Rohingya people cannot get work permits and their children cannot attend local school. Reductions in aid from donors have seen cuts to food budgets for the Rohingya population, exacerbating the crisis. In the Rohingya camps, human beings are living like slaves, and without hope.

At the same time, the Rohingyas’ presence has created a threat to Bangladesh’s internal stability. Solidarity has transformed into resistance as people worry about this gigantic population and its implications for a state with its own problems. People are angry at the presence of permanent camps in Cox’s Bazar which pose multifarious challenges – economic, social and environmental – that have had a drastic impact on our local economy.

Most pressing among these challenges is food insecurity, which creates a huge financial burden in Bangladesh, but there are many factors. The prices of housing and essential foods are rising. Employment and wages are under pressure. Tourism, a major source of income in coastal areas, is at risk, and cultivable land is taken up by camps. Clearing of forests for fuel has caused significant ecological damage to the region.

A large population on a border that has become more porous has enabled smuggling (drugs), murder and inter- and intra-group conflicts (particularly through the actions of ARSA). The volatile situation in the camps along the border threatens social cohesion in Cox’s Bazar and the surrounding areas.

Several domestic and international radical Islamist groups – namely Hefazat-e-Islam, Jamaat-ul-Mujahideen Bangladesh, Ansar al-Islam (Bangladesh), al-Qaeda in the Indian subcontinent, Hizb ut-Tahrir and ARSA – are carrying out subversive activities by exploiting vulnerable Rohingya people.

Extremist aid organisations and NGOs* are alleged to be aiding the spread of religious extremism within Rohingya camps. Professor David Lewis has said:

A major worry is the possibility that Rohingya youth, traumatised and with little to do, who are not allowed into local schools, and who have recently suffered violent discrimination on the basis of their religion, could be easy fodder for local and/or international Islamist recruiters.

Furthermore, Bangladesh’s economy is facing the worst crisis in recent times. The pandemic and Russia’s war in Ukraine have pushed Bangladesh’s economic situation beyond control.

Inflation has skyrocketed – caused by supply chain disruptions, strong domestic demand and rising commodity prices. From September 2022 to August 2023 average inflation was 9.24%. In August 2023, food-price inflation was 12.54% (its highest in 12 years), while inflation stood at 7.95% for non-food items. Coupled with exchange rate volatility, this was associated with a depreciation of the Bangladesh taka against the US dollar: approximately 30% in two years. In 2023, government borrowing from the central bank to mitigate the budget deficit (though suspended since July) also added to inflationary pressure by increasing the money supply.

Bangladesh depends on imported grains – it is the third-largest food-importing country in the world – so the falling taka and reduced spending power have serious impacts on the lives and livelihoods of the common people. According to FAO, Bangladesh is among 45 countries at high risk of facing a food crisis.

Income inequality has reached critical levels. Bangladesh is now facing a 12.3% unemployment in the 14–24 age group, with 15.2% long-term unemployment. Recent years have seen low employment growth in various productive sectors of the country. Many Bangladeshi migrant labourers lost jobs due to the COVID-19 pandemic and the economic crisis in the Middle East and the Gulf, reducing remittances.

Low remittance incomes and huge import payments cause trade deficits and a poor balance of payments. According to the latest available data from the Bangladesh Bank, net foreign currency reserves are now $19.96 billion. The government was able to secure first and second tranches of IMF loans to help with short-term economic challenges, but at the price of future interest payments — that hardworking people will ultimately pay.

All the above facts indicate that Bangladesh’s economy is in deep trouble and that the people are struggling. The government of Bangladesh has responded magnanimously to the Rohingya crisis over a long period of time. However, the issue of Rohingya repatriation is unresolved and increasingly vexed. As Professor Stephen Howes points out, “There is, sadly, no permanent solution in sight for the 900,000 Rohingya refugees in Bangladesh”.

The UN High Commissioner for Refugees, donor agencies, and the international community have yet to find any solution to the Rohingya issue – and avenues of assistance are closing. Who will take responsibility for the Rohingyas? Bangladesh, with its growing population and dire economic problems, cannot be expected to bear this burden alone.

*Editor’s note: As the allegations mentioned here are a matter of dispute in relation to at least two of organisations named in the original post, the names of these organisations have been removed.

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Chowdhury Dilruba Shoma

Chowdhury Dilruba Shoma has a Master of Public Policy from the ANU's Crawford School of Public Policy, and works at Bangladesh Bank.


  • This needs serious fact-checking. It is not true that 90% of Rohingya live in Bangladesh – there are 100,000 in Thailand and another 100,000 in Malaysia, and around a half million or more still in Myanmar. The figure who was murdered in 2021 was named Mohib Ullah, not Mohid Ullah. And I think one could argue that Rohingya have been remarkably resistant to radicalization, given their situation – implying otherwise feeds the Islamophobic agenda. Finally, blaming the economic woes of Bangladesh, a country of 170+ million, on the presence of 1 million Rohingya, whose shelter, medical care, and food are not at all financed by Bangladesh but by foreign donors (in fact, Bangladesh benefits, as food purchases and shelter materials are purchased from Bangladeshis) is unfair. If we want to talk about economic woes, I would argue that corruption is a much bigger factor than the presence of Rohingya who have nowhere else to go.

    • Thank you very much Tom for raising some vital points. About your first point please go to the piece, ‘today about 90% of the Rohingya population lives in Bangladesh’. Source: Managing the Rohingya refugee crisis: Who holds power? | South Asia@LSE. The article is approaching five years old (2019) so the situation might have changed. A prominent Rohingya figure who was killed by ARSA was Mr. Mohib Ullah, not Mohid Ullah— your second point. I apologise and admit that I will correct the spelling.



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