Two Ships, One Storm: How Sri Lanka and Bangladesh Were Steered into the Same Reef

Western commentary likes to file these under “South Asian instability,” but a closer look suggests something more structural: both countries were shaped by the same colonial extraction model, and took some catastrophically bad decisions.

Although Bangladesh did not end up with that specific headline, by 2025 it had accumulated its own set of misfortunes, including the highest inflation in South Asia; a banking sector riddled with bad debt, as a result of which the regulators had given up on pretending the situation was any different; and a political system that changed administration twice within eighteen months.

Western commentary likes to file these under “South Asian instability,” as if the region simply has some kind of chaotic hobby. A closer look suggests something less mysterious and more structural: both countries were shaped by the same colonial extraction model, offered the same prescriptions by the same institutions, and took some catastrophically bad decisions entirely on their own initiative, which is the part their own leaderships would prefer forgotten.

The Plantation and the Jute Sack

Neither economy was born poor by accident. British Ceylon was deliberately arranged to have a tea and rubber plantation economy, which was operated for the advantage of London, the land being taken from the Kandyan highland communities and labour being brought in from South India under conditions no different from indenture.

Bengal experienced a similar change: having for centuries been a region known for textile production, it was systematically de-industrialised in order that it could supply raw jute and cotton to the British mills, the finished cloth being shipped back for the Bengalis to purchase. This was not merely an example of accidental underdevelopment; it was a deliberate policy put into effect through the use of tariffs, land settlement, and the normal mechanisms of the empire.

What is worth noting, which further complicates the tidy morality tale, is that Sri Lanka did not start from the back of the pack. At independence in 1948, it stood second only to Japan on most Asian socio-economic indicators, ahead of South Korea in per capita income as late as 1960, with a welfare state, free education, free healthcare, and subsidised rice that was the envy of much of the developing world.

Bangladesh’s starting position in 1971 was harsher. A nation born out of war, genocide, and famine, seceding from Pakistan at enormous human cost, with the Soviet Union’s diplomatic and military backing (including UN Security Council vetoes and naval deterrence in the Bay of Bengal against a US carrier group sent to intimidate India) proving decisive to its very existence.

Sheikh Mujibur Rahman’s government leaned toward a Soviet-style model of nationalisation in the immediate post-war years, before his 1975 assassination reversed that........

© New Eastern Outlook