Bangladesh's Rohingya Issue : a decade on, Dhaka needs a new plan

Nearly a decade after Bangladesh took in more than a million Rohingya refugees fleeing violence in Myanmar, the world's largest refugee settlement is in worse shape than at almost any point since the exodus began and the government now in charge of managing it has barely had time to find its feet.

For New Zealand, a country that prides itself on quiet, practical contributions to humanitarian and Indo-Pacific stability, the unravelling crisis in Cox's Bazar is a reminder of how quickly a "temporary" emergency can morph into a permanent one.

Another never-ending crisis

Bangladesh opened its border to some 730,000 Rohingya in 2016 and 2017, after Myanmar's military launched a crackdown that the United Nations later described in terms bordering on genocide. What was described at the time as a short-term humanitarian response has since become a fixture: more than a million refugees remain in overcrowded camps along the southern border with Myanmar, with little prospect of the "safe, dignified repatriation" that Dhaka has long insisted is the only real solution.

The Bangladesh Nationalist Party (BNP), which returned to power in February after two decades in opposition, has inherited this problem at a particularly difficult moment. Myanmar's 2021 coup tipped the country into a widening civil war, and Rakhine State -the northern border region Rohingya refugees would eventually need to return to - is now almost entirely under the control of the Arakan Army, an ethnic armed group with a significant anti-Rohingya streak.

In the camps the humanitarian funding is drying up, crime is rampant, and the future remains uncertain.

The Rohingya crisis is unlikely to be the new government's top priority - it has quite enough on its plate, from consolidating Bangladesh's democratic transition to reviving the economy. But allowing the situation in the camps to keep drifting would be a serious misstep, with consequences not just for the refugees themselves but for the security and cohesion of southern Bangladesh.

Funding cuts are already biting

The numbers tell part of the story. Since 2017, the UN-led response has drawn just over a billion NZ dollars, funding a World Food Programme ration worth around $NZ20 a month per refugee. It’s a lifeline for a population with almost no legal way to earn an income.

That funding has now contracted sharply, driven in part by the Trump administration's cuts to US humanitarian spending. In April, the World Food Programme was forced to cut food support for roughly two-thirds of camp residents, with some now surviving on the equivalent of just $NZ15 a month – albeit with some new forms of assistance funded by the US.

Meanwhile, the population keeps growing through new arrivals and an estimated 30,000 births a year. Refugees cannot get secure jobs, but many work illegally for lower wages than the local Bangladeshi labourers, creating further tensions.

Security has deteriorated too. A fragile truce between rival Rohingya armed factions which was brokered by Bangladeshi intelligence in late 2024, is reportedly unravelling amid competition over cross-border drug trafficking.

Old playbook, new problem

Bangladesh has weathered Rohingya refugee crises before, with BNP governments facing earlier waves of arrivals in the late 1970s and early 1990s. But the current predicament is more complicated than anything the party has previously managed.

Myanmar's Tatmadaw has now lost military control across much of the country. The Arakan Army now holds nearly 90 percent of Rakhine State, including the entire Bangladesh border region. And after years of failed diplomacy, patience among ordinary Bangladeshis for a repatriation programme that never materialises is wearing thin.

Under former Prime Minister Sheikh Hasina, Dhaka pursued negotiated repatriation almost exclusively through Myanmar's central government, including with Chinese mediation, while placing tight restrictions on refugees' movement, work and education to discourage anything looking like permanent settlement. Not a single refugee went home through the formal repatriation mechanism Hasina's government negotiated.

Instead, the restrictions deepened dependence on aid and created space for armed groups like the Arakan Rohingya Salvation Army (ARSA) to entrench themselves as the camps' de facto power brokers, sparking a violent turf war with a rival faction that Bangladeshi security agencies quietly threw their support behind.

The interim government that followed Hasina's removal in August 2024 tried a different tack by opening direct contact with the Arakan Army, pushing for a UN conference on the crisis, and cautiously loosening some restrictions on refugees. It was a departure from the old approach, but not on its own a lasting solution. That knotty task now falls to the BNP.

Rohingya Muslims at a Mosque in Sittwe, Rakhine State 2016/ image amc

What a reset could look like

As many Myanmar-watchers would agree, the first step must be to sort out the camps themselves, by bringing in stronger security, more economic self-reliance for refugees, and some straight talking with the two forces that control conditions across the border in Rakhine: Myanmar's military backed administration, and the Arakan Army.

That means regulating refugee employment rather than pretending it doesn't happen, expanding and upgrading camp infrastructure, and creating space for genuine Rohingya civilian leadership, rather than bodies widely seen either as extensions of Bangladeshi state control, or “businessmen” with ties to armed groups and the Myanmar military, or even organised crime members from as far afield as Taiwan.

Crucially, it also means talking to the Arakan Army. The group now controls the territory most Rohingya would eventually return to, making it an unavoidable actor, and one that has already made it very clear how much they dislike the “Kalars”.

Speaking to a Wellington audience this week, former NZ Ambassador to Myanmar Steve Marshall agreed that a solution is possible. “Everyone understands the Rohingya are going to have to come back” he said “ Even the Arakan Army understands that, but they also say there’s no point bringing them back into a warzone”.    

During my own visit to the Rakhine State, about a year before the forced Rohingya expulsions, Arakan Army members were happy to tell me just how invasive and destructive the Rohingya had been, despite their existence in the region since the 10th Century AD.

While it was the Myanmar military that carried out the August 2017 "clearance operations" in northern Rakhine, including the mass killings and village burnings later dubbed genocide, it was the Arakan Army that finished the job in 2023-24, as they took back control of Rakhine from the Tatmadaw.

The issue has long festered. Following Burma's independence in 1948, the Rangoon government initially recognised the Rohingya as legal citizens with voting rights. However, successive military regimes systematically eroded these rights, culminating in the 1982 Citizenship Act which rendered them stateless. From there it was all downhill for the Muslim minority.

In 2026, Bangladeshi politicians, security officials and Cox's Bazar locals worried about strain on local resources are likely to push back hard against anything that now looks like a formal recognition of refugees' presence. But across the border any engagement with an organised armed group like the Arakan Army remains massively problematic.

Managing that domestic backlash while keeping international donors happy will be a big ask for the new BNP administration.

A regional watch-point, not just a local one

The Rohingya crisis has also become entangled in wider regional recalibration. Dhruva Jaishankar, executive director of the Observer Research Foundation America (ORF America) and a 2026 senior fellow with the Asia New Zealand Foundation, told a US congressional hearing in December that Washington and New Delhi have taken visibly different approaches to Bangladesh since Hasina's fall, with the US prioritising free elections while India remains focused on extremism and minority rights – although also willing and able to speak to the Bangladeshis about possible future solutions.

But Jaishankar points out that India has, by design, never been that open to receiving refugees. “The issue is now complicated by the civil war in Myanmar “he said. “But we have now seen the junta being engaged by ASEAN, by China, and we are now seeing India do the same”.   

For New Zealand and other donor countries watching from a distance, the message is a familiar one: goodwill and periodic aid top-ups won't be enough. Without a genuine reset, including regulated work, credible camp leadership, some diplomacy with the Arakan Army, and a united international donor base willing to fund a cheaper, longer-term response, Bangladesh risks losing the last decade's fragile stability in Cox's Bazar.

Banner Image ; IRC

Asia Media Centre