Tens of thousands of workers have marched through Dhaka and the key industrial towns of Gazipur, Ashulia and Narayanganj in recent days demanding higher pay. Protests turned violent in several hubs, with factories vandalised and roads blocked during clashes with police, forcing hundreds of plants to suspend operations.

On Wednesday, the statutory Minimum Wage Board agreed that a revised pay scale would take effect from December, but it has yet to recommend a specific figure as negotiations between factory owners and worker representatives continue. Workers want the monthly minimum wage to be raised to 30,000 taka (US$237) from 12,500 currently.

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Garments account for more than 80 per cent of Bangladesh’s export earnings and 10 per cent of its economic output. The sector employs about 4 million people in the South Asian nation.

The unrest is piling pressure on Prime Minister Tarique Rahman’s government, which took office in February after his Bangladesh Nationalist Party won the first election held since student-led protests toppled the autocratic regime of Sheikh Hasina two years ago.

Factory owners say their costs are rising. Shortages of electricity and gas resulting from a global energy crisis linked to the ongoing conflict in the Middle East have forced some to cut output, alter work schedules, halt operations entirely or resort to buying expensive alternative fuels.

That same energy uncertainty has also fuelled inflation worldwide and reduced demand for well-known brands, especially in key Western markets.

Benchmark Brent crude, the global oil price reference used by traders, fell back below US$100 a barrel this month after spot prices spiked to as much as US$130 in October, far above its pre-Iran war baseline of around US$70.

Priyajit Debsarkar, an independent London-based geopolitical analyst who co-authored Bangladesh on the Brink, which examines political upheaval and post-uprising social changes in the country, told This Week in Asia that rolling power cuts had repeatedly forced garment factories to halt and restart production throughout the day, driving up generator costs and forcing compulsory overtime.

The Middle East conflict has also eaten into the remittances that the millions of Bangladeshis based abroad typically send home – a vital source of foreign currency for the country second only to its ready-made garment exports.

“Multiple problems have converged,” Debsarkar said. “The government will still need to find the resources because the workers’ concerns are genuine.”

He suggested prioritising pay rises for selected groups, such as women, or granting graded increases by skill and experience.

Dhaka is also actively negotiating with the International Monetary Fund for a fresh loan package after terminating an earlier US$5.5 billion arrangement over contested reform conditions, with the new funds still expected to come with restrictions targeting improved tax collection and a reduction in bad loans within the banking sector.

Bangladesh’s advantage over rival producers rests largely on labour costs, which are among the lowest of the major apparel-making nations.

Swaran Singh, a former professor at Jawaharlal Nehru University’s School of International Studies in New Delhi, said the timing of the unrest was “particularly dangerous” because Bangladesh’s garment industry was “already experiencing a simultaneous supply-side crisis”.

“Labour unrest compounds these difficulties by threatening delivery schedules and international buyers’ confidence,” he said.

It could also see Bangladesh lose ground to rival exporters such as India and Vietnam, Singh added.

Debsarkar likewise warned that the garment sector protests could drive key customers away if they dragged on for too long.

“If these things continue unabated, it could undermine Western customers’ confidence in the market,” he said. “Given the current situation of Bangladesh’s foreign exchange earnings, can the Bangladesh government afford to lose this vital economic lifeline?”

Biswajit Dhar, an independent development economist and former distinguished professor at the Council for Social Development in Delhi, said the workers’ anger had been building for years.

Labour leaders, already aggrieved by rising living costs, had joined the student-led protests that forced Hasina from power in 2024, he noted.

“All this pent-up frustration had to surface,” Dhar said, adding that the sheer number of workers involved could make the current protests hard to contain unless the government acted quickly.

“Some kind of economic relief has to be given immediately,” he said, further noting that the promise of a higher minimum wage might not be enough if workers felt their demands were being shelved.

“This can be a serious problem for Bangladesh beyond the law and order situation,” Dhar said of the ongoing protests. “It will be an economic disaster.”

Hasina, who has been living in self-exile in India since fleeing across the border in August 2024 and was sentenced to death in absentia last year, has repeatedly said that she plans to return to Bangladesh next month, but Dhar said her arrival could cause chaos.

“There could be anarchy if Hasina returns to the country at this point,” he said, adding that members of her Awami League party have historically held large and influential stakes in the garment industry and she still “has substantial support”.

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The Financial Action Task Force (FATF), the global money-laundering and terrorist-financing watchdog, warned on October 30 that it could consider further measures against Myanmar if it failed to remedy shortcomings in its financial safeguards by February.

Myanmar has been on the FATF blacklist since 2022. The designation subjects financial transactions with the country to enhanced scrutiny, raising costs and complicating business dealings. Only Iran and North Korea share the same status.

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On Thursday, Japan’s Ministry of Finance denied a Reuters report, published on October 30, that Tokyo was pushing for Myanmar’s removal from the blacklist to make it easier to do business there.

“There is no fact that the Japanese government sought to have Myanmar removed from the FATF blacklist. Japan hopes that Myanmar will make the necessary improvements to strengthen its measures against money laundering and related illicit activities,” the ministry said in a statement published by Reuters.

It added that Japan did not say it wanted Myanmar removed at a closed-door meeting of the 40-member global body held in Paris on October 30, after which Myanmar stayed on the list.

Reuters cited a senior Japanese government official and another person familiar with the matter in its report. One of the sources has since stood by the account.

Last Saturday, Myanmar’s military-backed government said in a statement to Reuters that “friendly countries” were supporting its bid for removal from the list, naming Japan among them.

“The United States, China, Japan, India, South Korea and Indonesia recognise Myanmar’s efforts. We are grateful to all of them for acknowledging Myanmar’s current progress,” it said, without elaborating.

Questions remain over whether Myanmar’s efforts amount to meaningful reform. FATF has called for better use of financial intelligence and for more investigations and prosecutions of money laundering.

Jared Bissinger, a visiting fellow with the Myanmar studies programme at the ISEAS – Yusof Ishak Institute in Singapore, told This Week in Asia that Myanmar had taken some steps to address items on FATF’s action plan.

These included an anti-online scam law passed in July and a crackdown on informal money agents, known locally as hundis.

“However, these steps come across as performative and self-serving,” Bissinger said, noting that the crackdown was mainly intended to force migrant workers to use the state-controlled financial system when sending remittances home.

“This benefits the regime but leaves migrant workers worse off because they get a lower exchange rate from the state-controlled system,” he said.

Last month, a joint investigation by the activist group Justice For Myanmar and Reuters reported that the regime’s Foreign Exchange Supervisory Committee had issued falsified import documentation to a private company to import jet fuel to bypass US and international sanctions.

Bissinger said this undermined any claim the country’s government was “genuinely committed” to anti-money-laundering and terrorism financing compliance. “The forging of documentation raises questions about whether they themselves are the money laundering concern,” he added.

Removing Myanmar from the blacklist could now be seen as rewarding it for “performative” measures, Bissinger said.

Japan has considerable economic interests in Myanmar, including a large stake in the Thilawa Special Economic Zone, located about 25km (15.5 miles) southeast of downtown Yangon.

“In recent years, the increased scrutiny of financial transactions with Myanmar has increased the burden on Japanese businesses when doing financial transactions with the country,” Bissinger said.

Min Zar Ni, an independent Myanmar researcher based in Japan, said Japanese business activity in the country had rebounded since 2022 but remained below pre-2021 coup levels.

Tokyo likely anticipated that fewer barriers to international fund transfers could support businesses already operating there and help Myanmar migrants in Japan send money home, he said.

For now, extra bank had meant higher costs, delayed payments and greater difficulty arranging trade finance or transferring investment funds, he added.

Sam Baron, a research fellow at the Yokosuka Council on Asia-Pacific Studies, said Japan had kept the strongest links among regional countries with senior Myanmar figures, including Min Aung Hlaing, the former junta chief who assumed the presidency after the regime-managed 2025-26 general election.

“This makes Japan a particularly effective interlocutor in American engagement with the regime,” he said.

Baron said Japanese officials might have lobbied for removal from the FATF blacklist through private intermediaries.

“The Japanese have frequently used special envoys and other intermediaries not technically part of the government to negotiate with the regime in the past,” he said. “This shadow diplomacy is somewhat distinctive to the Japanese approach.”

Tokyo had hosted talks between representatives from Washington and Myanmar’s government, he added, acting as “a bridge” and probably “taking policy actions that Washington may not be able to”.

Min Zar Ni said Japan was likely seeking to engage with Myanmar by involving the US and the Association of Southeast Asian Nations, while keeping the question of Naypyidaw’s political legitimacy separate.

Japan has not formally recognised Myanmar’s new government but, unlike other G7 countries, had imposed no direct economic sanctions, he added.

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The Japanese government on Friday lodged a formal complaint with Russia and demanded that Moscow immediately reverse a decree announced the previous day that transferred the assets of Japan Tobacco International (JTI) to Russian control.

Analysts say the decree, signed by Russian President Vladimir Putin, is likely a calculated decision by Moscow, given that the Japanese government holds more than one third of the stocks in the company.

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They suggest that Moscow’s latest action could force Prime Minister Sanae Takaichi to finally adopt a more resolute position.

“Overall, this is quite a surprising move by Moscow because JTI has done everything in its power to keep Russia happy,” said James Brown, a professor of international relations at Temple University’s Tokyo campus specialising in Russian affairs.

“They have stayed in the market when a lot of foreign companies left very soon after the Russian invasion of Ukraine and they are big taxpayers, to the extent that Ukraine has blacklisted the company,” he said.

“In that situation, most countries would try hard to cultivate the relationship and show that their investments are safe, but Russia is doing the opposite and using JTI for foreign policy leverage.”

Brown said friction between the two governments had clearly worsened since the spring, when Tokyo announced it would start contributing to the Prioritised Ukraine Requirements List to support Kyiv and send Self-Defence Forces personnel to Nato headquarters in Europe.

Putin responded by visiting one of the disputed islands off the far north of Hokkaido that Soviet forces seized after Japan’s surrender at the end of World War II in 1945 and which Tokyo still claims.

Moscow further showed its displeasure by inviting Chinese business owners to the islands to develop the local economy, before demanding Dutch authorities hand over the Japanese head of the International Criminal Court in The Hague, who is the subject of a Russian arrest warrant.

Brown urged Japan to be “more assertive” after its diplomatic representations to Moscow were ignored.

“Takaichi has to state quite firmly that Japan will withdraw its ambassador to Moscow and warn that it will start to increase support for Ukraine – particularly air defence interceptors – if Russia does not back off. Japan can kick out embassy staff, particularly those identified as intelligence officers,” he said.

“Takaichi is meant to be Japan’s ‘iron lady’ so she needs to start showing it.”

Tokyo’s initial reaction was a rebuke from Finance Minister Satsuki Katayama, who told a press conference that “Japan has repeatedly urged Russia to protect the legitimate interests of Japanese citizens and businesses”.

JTI said in a statement to This Week in Asia that it had “continued its business operations in Russia in compliance with all applicable regulations and sanctions”.

“However, we can confirm that, pursuant to a Russian presidential decree signed on November 5, among our entities in Russia, four manufacturing entities have been placed under temporary administration,” it said.

“The JT Group is currently gathering further information regarding this matter, considering the options available to the group and assessing the potential impact on the group.”

Tadashi Anno, a professor of politics at Tokyo’s Sophia University, said Japan had few meaningful ways to counter Russian pressure.

“Moscow has almost certainly calculated that Japan needs Russian oil and gas that comes out of the terminals on Sakhalin,” he said. “They may believe that with the situation in the Middle East still unsure that Japan will not push back hard again this time because cutting energy exports could be Russia’s next retaliatory move.”

Anno added that Tokyo was also concerned Moscow might be coordinating its approach to Japan with China and looking to take advantage of uncertainty regarding the future direction of US foreign policy following the midterm elections.

Toshimitsu Shigemura, a professor of international relations at Tokyo’s Waseda University, sees the sustained pressure on Japan as a tactic designed to convince Tokyo to halt support for Kyiv and lift the sanctions it imposed after the February 2022 invasion of Ukraine.

“Japanese people are very angry with Russia’s actions and want the war to end, but they do realise that Russia still has a lot of economic leverage,” he said. “While they feel that Moscow’s seizure of JTI assets is wrong, there are also many people who have been critical of the company staying there and making money, so they do not have a great deal of sympathy for JTI.”

Brown said he believed the seizure of JTI assets was a strategic miscalculation that would ultimately hurt Russia.

“Any foreign firm that still has a presence in Russia is going to look at the example of JTI, which has done everything to stay on the right side of the Russian authorities, and see the consequences,” he said.

“I see this as a hugely self-defeating step. Russia should be desperate for foreign companies to stay, but this will convince more to leave … CEOs are going to remember how they were treated in Russia and they will think twice about returning.”

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