Nearly four years after national elections brought hope that Bangladesh could finally begin put its poisonous politics behind it, the country has returned to the tumultuous factionalism that generated a coup and two years of military-backed caretaker government.

“Hope has been replaced by deep disillusionment as two familiar threats to Bangladesh’s democracy have returned: the prospect of election-related violence and the risks stemming from an unstable and hostile military,” according to a report released this week by the Brussels-based International Crisis Group.

The country’s bitter politics, fought out for decades between the current prime minister, Sheikh Hasina, and her rival, Khaleda Zia, stand in marked contrast to its economic performance, which has been improving – with reservations -- in recent years, according to a May report by the World Bank, with successive bumper crop harvests and annual manufacturing growth of 9.8 percent, partly because of credit support by the Bangladesh Bank, the country’s central bank, for small-scale manufacturing. Construction is continuing to recover and there is sustained robust growth in services. A recent report by McKinsey concluded that the country’s burgeoning garment industry has the potential to generate more than US$40 billion a year from exports despite slowing imports by the Eurozone and weak ones in the US, the two primary markets for Bangladeshi garments.

Growth is expected to slow somewhat to a still healthy 6.3 percent, in contrast to the continuing global slowdown although inflation remains disturbingly high, rising to 11.6 percent annually last November before falling to 9.9 percent in April. At least 50,000 garment workers went on strike Wednesday to demand 50 percent wage rises and subsidized food in violent demonstrations, with scores of police officers and workers injured.

Whatever is happening economically, however, the political situation appears to exist in a vacuum in which Hasina’s Awami League and Khaleda’s Bangladesh National Party remain at each other’s throats, as they have been for decades. They can be expected to stay that way through elections, which must be held within 90 days of the expiry of the Parliament on December 29, 2013. Mysterious disappearances are growing and recently 33 senior members of the opposition were arrested on charges of vandalism and arson. In opposition, Khaleda is increasingly ordering a drumbeat of street protests and hunger strikes, and threatening angry mass rallies. Sheikh Hasina has answered with a crackdown on civil groups, including new legislation to bring NGOs more firmly under political control.

The caretaker government put in place after the2006 coup jailed both women in a vain attempt to force the Awami League and the Bangladeshi National Party to undertake reforms. Although ultimately the two parties agreed to peaceful dialogue and a well-supervised election, they remain bitter enemies.

In December 2008, the Awami League won an overwhelming 229 of the 300 seats in the Parliament. But “Instead of changing the old pattern of politics, the Awami League government has systematically used parliament, the executive and the courts to reinforce it, including by filing corruption cases against Khaleda Zia, the BNP chairperson, and employing security agencies to curb opposition activities,” according to the ICG report.

Most worrying, however, the ICG says, is the Awami-League’s decision last year to push through a constitutional amendment featuring the threat of sedition for anyone criticizing the document and prescribing the death penalty for anyone plotting to overthrow the government, as well as scrapping a provision mandating the formation of a neutral caretaker administration to oversee general elections.

“It is no surprise that the public has now slowly turned against the government or that the BNP has regained much of its strength, according to the crisis group report. “In a major show of force on 12 March 2012, 100,000 people attended a BNP rally in Dhaka, even though the government virtually cut nationwide transport links to prevent supporters from joining. But more violent political confrontations loom if no accommodation between the two parties is reached.”

The military is also growing increasingly frustrated although the constitutional amendment prescribing the death penalty for anyone plotting governmental overthrow is regarded as a threat to keep the army in the barracks. On Jan. 19, the military announced it had foiled a coup by mid-level and retired officers who sought to install an Islamist government. Senior officials told Crisis Group investigators that disaffection and anger are widespread and rising in the military, which is regarded as increasingly unstable.

“Large-scale dismissals, forced retirements, deepening politicization and a heavy-handed approach to curb dissent and root out militants have created an unstable and undisciplined force,” according to the ICG report. “While a top-level coup is unlikely, the prospect of mid-level officers resorting to violence to express their suppressed anger is increasingly high.” Against that backdrop, Khaleda’s Bangladesh National Party gave an ultimatum to the government to reinstate the election caretaker system by last Sunday or face battles in the streets, rallying 100,000 supporters in Dhaka in March for a protest that turned violent.

“With the deadline passed and no action from the government, it is now calling for nationwide political agitation,” according to the ICG. “A BNP-led boycott of the 2013 general elections may be in the offing.”

“Should the situation deteriorate to the point that the army again decides to intervene, it is unlikely to be content to prop up civilian caretakers and map a course to fresh elections as it did in 2007. This time the generals could be expected to have more staying power, not to mention less reluctance to carry out “minus two” – their previous plan to remove Sheikh Hasina and Khaleda Zia from politics.”