Challenge of reviving SOEs is daunting

When investment in the industrial sector is hard to come by, asking for outlays for revival of sick or closed state-owned enterprises (SOEs) sounds rather paradoxical. Time and again, such initiatives have caused waste of funds. The reason why such moves have ended in failures is more political than industrial consideration based on pragmatic decisions. Few SOEs were handed over to genuine parties with the required expertise and vision needed to manage factories and industries. In a country where the banking sector is in a shambles with a burden of Tk 10.08 trillion non-performing loans---more than the fiscal year 2026-27 budget amounting to Tk 9.38 trillion, investors will think twice before injecting money into enterprises that have collapsed or running at losses. The prospect does not look very bright for such factories or industries.

Now Prime Minister Tarique Rahman pledges his all-out support to prospective investors if they are serious about pulling the closed or ailing SOEs out of the morass. He has hinted at gradual recovery of such non-functioning enterprises. Yes, a step by step approach looks pragmatic. An expert committee should be formed to evaluate proposals submitted by parties for recovery of the loss-making enterprises first. Past experiences in handing over jute mills and paper mills are not happy at all. Private operators exited from their responsibilities unceremoniously. Now the problems have accumulated and challenges are proving even more daunting. One of the reasons is crisis of energy---gas or fossil fuels. The sugar mill in Kushtia presented a different type of problem because of outdated machinery. Production costs are very high and cannot compete with neighbouring countries' costs far lower than those of the local one.

Notwithstanding all such limitations and managerial shortcomings, the prospects of not all such enterprises are bleak. For example, jute, the natural fibre, has tremendous prospects if the country can cultivate the positive points of this once golden fibre in a new context. The context is the increasing global awareness against use of plastic and polythene. Yarn, bags and sacks made from jute can be promoted at the international level. Dr Mubarak Ahmed Khan's breakthrough invention of jute cellulose leading to production of eco-friendly bio-plastic called "sonali bag" could be taken ahead for commercial production of such bags. Its prospect is immense and if investors invest in such a project for mass production preferably in collaboration with foreign firms, this can usher in a kind of industrial revolution.

The proposed committee can take this one as a pilot project and make an appraisal of its viability. There may be a few more such projects that deserve a closer look for their revival. One thing is clear that investors will have to be amply convinced of the merit of SOEs. Meanwhile, small and medium enterprises (SMEs) can be better candidates for investment. Application for loans for installing capital machinery and expansion of their units can be brought under scrutiny. If political bias can be avoided and genuine entrepreneurs are helped to expand manufacturing capacities of such enterprises, they can prove their mettle. Already the young entrepreneurs have shown what they can accomplish without government patronage. They deserve government supports and assistance.