Though the recent Indo-Bangladesh Foreign Secretary level talks held in New Delhi made significant progress on several issues, there was no forward movement on the issue of connectivity. Bangladesh remains reluctant to extend this facility to India, though bilateral relations have generally been trouble-free in the last two years.

Rising food and oil prices worldwide have increased the misery of people in Bangladesh who have already been suffering the effects of near double digit inflation. The military backed caretaker government has been forced to increase the prices of oil products by 33 to 67 per cent with effect from July 1, 2008. Diesel and kerosene prices have been hiked by 37.5 per cent to 55 taka a litre (0.26 gallons) and petrol prices by 34 per cent to 87 taka a litre.

In the ongoing mass arrests in Bangladesh, nearly 20,000 people have been put behind bars. These arrests started on May 28, 2008 after the ban on political activity was lifted. It was expected that after allowing political activity, the government will facilitate the electoral process leading to the holding of elections which were postponed in January 2007. But the mass arrests in the name of deteriorating law and order condition have made the political situation fluid.

Muslim countries and Islamic relief organisations along with the rest of the world have shown unprecedented solidarity with the people of Bangladesh after the devastating impact of cyclone Sidr in mid-November. Ironically, many of these Islamic charitable organizations have been involved in fuelling fundamentalism in Bangladesh. The extremist forces, and not surprisingly, are once again trying to capitalize on the miseries of the people and the inadequacies of the state machinery.

After dilly-dallying for a long period Bangladesh finally signed the Trans-Asian Railway (TAR) network agreement on November 9, 2007 at the UN headquarters in New York. With this 20 of the 28 countries under the network have joined the agreement. India signed the agreement on June 29, 2007. The remaining eight countries have yet to sign citing "procedural" and "technical" reasons, rather than disagreement about the project. Bangladesh failed to sign the agreement earlier as the previous BNP-Jamaat alliance government was undecided on the issue.

The struggle for control over the Bangladesh Nationalist Party (BNP) took a new turn after the reformist faction appointed former finance minister Saifur Rahman as the acting chairman. This decision was taken by the highest policy making standing committee in a five hour meeting on October 29. The committee also made former water resource minister and dissident leader Hafizuddin Ahmed the new Secretary General. However, the meeting allowed Khaleda Zia to remain as the party's chairperson.

Bangladesh faces a shortage of electric power and is planning to meet the shortfall by setting up nuclear power plants. Significantly, this development has occurred at a time when the country is being ruled by a caretaker government with the backing of the military. The military in Bangladesh is trying to carve out a permanent place for itself in governance by creating a National Security Council.