Hey, everybody. Peter Zeihan here. It is August 5th. And the Prime Minister of Bangladesh, Sheikh Hasina, has fled the country after nationwide riots which have killed a few dozen people. This started out as a group of young people who were basically desperate for jobs. Government jobs are basically guaranteed to people who fought in the revolution or their descendants.

And if you’re not one of those people, you’re kind of out of luck because all that’s left in the economy is becoming a wage slave for the textile industry. And when I say wage slave, I literally mean wage slave and horrible, horrible conditions. Basically, we’ve decided to get rid of sweatshops, and so everything just went to Bangladesh, or to do an incredibly dangerous job, which is called shipbreaking, which takes old vessels, physically breaks them down, and then recycles the steel.

Very easy to get maimed doing that job. Anyway, that’s it. That’s the entire Bangladeshi economy. And, anyway, what started out as protests about jobs basically spread to include concerns about corruption and incompetence. And, if you’re looking for corruption and incompetence, Bangladesh is the place for you. You basically have a couple of political parties that have switched back and forth, back and forth, back and forth over the course of the entire existence of the country since the 70s, turning everything into a patronage network.

So we had a period, you know, 15, 20, 25 years ago where most services for most of the population were not provided by the government because that was all corrupt. You basically had foreign NGOs coming in to do social services. Well, over the last 20 years, those NGOs have basically been brought into the patronage network.

And so most of them stopped operations, and the ones that remain are not exactly doing a lot of great work. So there’s nothing going on here from a positive point of view, from a community point of view, except for generating most of the world’s ready-to-wear knitwear. So, for example, if you’re into fast fashion, you are taking advantage of the near-slave conditions in Bangladesh and massive corruption.

So congratulations to you. Anyway, where does this bring us? Well, this is a country of 100-odd million people, and it’s on a very small footprint of land with very few economic opportunities and almost no resources. Agriculture is largely subsistence, and the government has now failed. Neither of the political parties are in a position to take up governance.

I mean, the ruling party just lost the Prime Minister. They don’t know anyone who’s less corrupt in the ranks. And the opposition is fractured, to say the least. They do have a history of having military coups and military rule from time to time. But one of the positive—if that’s the right word—things the most recent government has done is gutted the military to make military coups less capable.

So the military probably doesn’t have the skill set that’s necessary to take over. So barring some sort of surprise breakthrough and an internal knight in shining armor, which I have a hard time envisioning, we’re probably going to see a lot of economic destitution and civil breakdown, which means we’re probably going to see millions of refugees and immigrants leaving Bangladesh for some other place.

Here’s the thing: the only land border that Bangladesh has is with India. So in India, we’ve got a government under Modi who has been in control now for well over a decade. But he hasn’t faced an international crisis at all. There are really only two countries that matter in terms of nearby relations. One is Pakistan—a nuclear threat—a few wars in the past, but relations there have been pretty calm. Most of the drama has been on the Pakistani side of the equation, which has kind of kept Pakistan bottled up in its own juices and allowed the Indians to relax a little bit. And the other one is Bangladesh, which has also been calm until now.

So the Modi government, unfortunately, doesn’t have a lot of experience in dealing with crises because there hasn’t been one in the last ten years. And now you’re talking about an economic one where you’re talking about a surge of people potentially coming into India, that India simply doesn’t have the facilities, the infrastructure, the capital, or the jobs in order to absorb these people competently.

There’s also the issue that the Modi government has very few connections to the Bangladeshi government. Yes, in past years, there have been reasonably strong connections between Indian governments and the Bangladeshi parties. But most of that was under Congress, which is now in opposition. So we get kind of a double crisis here, with Bangladesh potentially falling apart and with India not really having the traction it needs to deal with the situation in a meaningful way.

So a lot of moving pieces in this, and none of them are really moving in the right direction, but we’re going to find out real soon what the Modi government is made of when it comes to an international issue that actually matters to it right on its own border, as opposed to dealing with some sort of nonaligned movement issue that has broader political connotations around the world but is mostly about atmospherics.

I mean, this is where the rubber is going to hit the road, and we’re going to find out real soon.

Hey everybody, Peter Zeihan here, coming to you from Colorado. Today, we’re talking about a country we hardly ever talk about, and that is Bangladesh. There are nationwide protests going on there right now. At least 20 people have been killed, and the protesters are literally saying that they’re trying to shut down the country, and they’re doing a pretty good job.

For those of you who don’t know what Bangladesh is, it’s a small, physically small country kind of nestled into the armpit of India, to the northeast of Delhi. It’s that little chunk that kind of wraps around India, and Bangladesh is there at the mouth of the Ganges, right in the Bay of Bengal.

It’s got a huge population, very young, over 100 million people. And it is textile central. As China moved out of textiles, or at least out of mass market textiles over the last 20 years, Bangladesh has picked it all up. Now, roughly 20% of textile supply chains involve Bangladesh in some way, and really 8% of global supply comes from there.

Anyway, the protesters are attempting to do nothing less than overthrow the constitutional order of the country. So, you know, kind of a big deal. The short version is that back when Bangladesh got independence in 1971, one of the founding laws for the country was that roughly 30% of all government jobs, regardless of what they are, were guaranteed to go to people who supported or fought in the revolution in the first place, or their families and descendants.

Well, that has basically given some very, very politically connected people a chokehold over government contracts and jobs. And if you are, say, a college graduate in Bangladesh, your options are to try to compete for what’s left. You can go into the textile industry and be a wage slave, or you can work on a beach breaking old ships, and that’s it.

That is the entire economy of Bangladesh. So there are several millions of people who are skilled and kind of have no prospects whatsoever because, you know, Bangladesh. You can walk to maybe India, but Indian labor laws aren’t exactly welcoming for migrants, just like most countries where migrants are a portion of the workforce. So they’re trying to shut the whole place down.

Now, this is both not a big deal and a very big deal. There’s nothing magical about textiles, especially when you’re talking about the relatively low tech level that the Bangladeshis do. However, the integration of textiles, typically a garment, especially things that involve a lot of stitching and maybe something sewn on or stamped in, like a button or a rivet, involves a dozen different countries.

And if you have a significant disruption within what is actually the single biggest node in the world, any number of supply chains are simply going to break completely. It’s not that they can’t be repaired. It’s not that they can’t be rerouted. But none of that can happen quickly because Bangladesh really has emerged as the singular node. So we’ve got a lot of cheesed-off college graduates who are basically trying to overthrow what is like one step removed from the constitutional order of the country.

And no matter how this goes down, we’re looking at disruption in global textiles for at least the next couple of years. For those of you who have been watching China, there are a couple of interesting years upcoming. As the Chinese system hits the skids and the second-largest concentration of textiles has problems, in the background, we have a change technologically in how textiles are being done, which is undermining both the Bangladeshi and the Chinese systems, specifically here in the United States.

We figured out a way to automate a lot of the process and take everything from raw cotton to turn it into thread and yarn, turn it to cloth, cut it into sections, and all of that is now cheaper than what goes on in Bangladesh. We’re probably only a few years away from actually being able to stitch the clothes together into a semi-finished process and make that cheaper as well.

So this is the economic sector that matters in the country, and this is potentially the next big source of outmigration as this sector fails. Anyway, what’s going on right now with the protests could simply make it fail faster.