Bangladesh's economic miracle is in jeopardy.

Squeezed on three sides by India and on the fourth by the Bay of Bengal, Bangladesh, the world's eighth-most populous country, is both a much-praised model of development and a significant regional economy. Since a brutal war of independence from Pakistan in 1971, it has made remarkable social and economic progress.

A billiard-table-flat land on the combined floodplain of some of Asia's biggest rivers, the country was once a byword for poverty, famine and natural...