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Recent episodes of religious violence in Bangladesh underscore the challenge the country faces in combating extremism. But the incidents also represent a deepening political crisis in the world's eighth-most populous nation.
A series of grisly attacks on writers, activists, religious minorities as well as the lesbian, gay, bisexual and transgender (LGBT) community has rocked the Muslim-majority nation since September last year.
This past week saw a Christian grocer, the wife of a police official who had been investigating the murders, and a Hindu priest killed in separate episodes that involved knives, guns and machetes. A Buddhist monk and two homosexual men were among the victims in May while the previous month's targets included a liberal blogger and a professor of English at a local university. More than 30 people had been killed in total since February 2015, Reuters reported on Thursday.
The Islamic State (IS) and Al Qaeda in the Indian Subcontinent (AQIS) have claimed credit for some killings, but Prime Minister Sheikh Hasina's ruling party—the Awami League—has denied the existence of these transnational groups. Instead, it blames the opposition, the Bangladesh Nationalist Party (BNP), and local terror groups such as the Ansarullah Bangla Team (ABT) and Jamaat-ul-Mujahideen Bangladesh (JMB).
The Awami League is a secular political party, widely seen as pro-business and maintains close ties with neighboring India. On the other hand, the BNP is deeply rooted in Islam and counts Islamist party Bangladesh Jamaat-e-Islami (BJI) as an ally. BJI leader Mohammad Qamaruzzaman was hanged last April for crimes against humanity during the country's 1971 independence war against Pakistan.
Officials have yet to confirm who is behind the attacks. On Wednesday, the New York Times reported that authorities identified the leadership of the two groups they believed to be responsible.
The country's complicated terror landscape is a challenge. Established home-grown networks have likely decentralized into smaller units, making it harder for authorities to detect these organizations, explained Romita Das, South Asia analyst at political consultancy Control Risks.
Long-standing tensions between secularists and conservative Muslims also underline the savage killings.
The country's constitution was founded on secularism but Islam is the official state religion. That contrast provoked a group of intellectuals, known as the Committee against Autocracy and Communalism, to launch a petition in 1988 demanding the removal of the constitutional clause that recognized Islam as the official religion. The High Court rejected their request in March this year without a hearing.
Now, analysts are increasingly singling out the government's mismanagement as a key catalyst of the ongoing terror.
The ruling party's marginalization of political opposition parties in recent years likely created a vacuum of leadership for radical groups to fill, according to Das.
"Sheikh Hasina has vigorously denied the presence of the Islamic State in the country, presumably because she wants to maintain foreign investment—especially in the country's garment-export industry, which after China is the world's largest, accounting for 80 percent of the country's export revenue," intelligence firm Stratfor said in a report this week.
By blaming the BNP and BJI for the murders, the 68-year old leader is giving herself a pretext to further marginalize both groups in the name of enhancing security, Stratfor continued.
Under the Awami League's reign, economic development has improved, with declines in inflation, debt and poverty levels but international human rights groups have long criticized the party for its crackdown on media and overall freedom of expression.
"It is terrible that when bloggers were murdered, the government could only preach self-censorship," said Brad Adams, Asia director at Human Rights Watch, in a report earlier this year, labeling the current administration an authoritarian regime.
This year, Mahfuz Anam, editor of Bangladesh' largest-selling English language newspaper, was accused of sedition and defamation, while BNP chairwoman Begum Khaleda Zia was also charged with sedition for questioning death toll figures from the 1971 independence war.
Both Stratfor and Control Risks pointed to the fact that opposition groups are so heavily marginalized that they are unable to protest against the government's heavy-handed rule via street demonstrations or strikes.
"Hasina has made the political calculation that if she can sustain the country's 6 percent rate of growth while creating jobs, reducing poverty and increasing health care access, then the electorate will overlook single-party rule and reward the Awami League during the 2018 elections," Stratfor said.
Moody's Investors Service told CNBC that the violent episodes remain isolated for now but if they become endemic, that could present risks to the country's current 'BA3' credit rating.
"We have already assigned a relatively elevated degree of political risk to the country because domestic politics are so highly polarized," said Anushka Shah, sovereign risk analyst at the agency.
Terror-linked violence aside, other downwards risks to the rating include shocks to Bangladesh's external position, including sharp declines in remittances or exports, and contingent liabilities in the banking system, Shah said.
"A key risk related to the violencein Bangladesh from a rating's perspective is that at some stagesafety issues could deter foreigners from doing business there.Especially if investors and buyers in the ready-made garmentssector would move their business to other countries in the region,this could inflict long-term harm to the economy. So far, we havenot seen this risk crystallize," said Thomas Rookmaaker, director ofsovereigns and supranationals at FitchRatings.
So far, the numerous multinational corporations (MNCs) in the South Asian country, which include Unilever, Chevron, HSBC and British American Tobacco, haven't been affected. There have been no reports of MNCs closing up shop so far and risks to foreigners remain incidental, Das said.
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