It is a major economic policy decision that Prime Minister Sheikh Hasina has announced. She has, thus, directed the ministry of textile and jute to take necessary steps for 'reclaiming' the mills and industries from private entrepreneurs who have failed to resume their operation which they had promised.
After an official investigation found out that Latif Siddique, dropped from the cabinet recently, had sold 47 state-owned jute mills and factories during the period between 2009 and 2013 either without inviting tenders or in non-transparent ways, she said this week the government will reclaim them and take action against those involved in any underhand dealing.
The Prime Minister also reiterated that no state-owned enterprises (SoEs) would be leased out or sold from now on. Earlier, she did also clearly express her firm position on not undertaking any further privatisation of public sector mills and industries, upon her assumption of office in 2008 during the immediately preceding electoral term.
In its election manifesto, the ruling party did also state that no industry would be privatised or closed down without creating alternative employment opportunities for the workers and employees.
However, the government could not to live up to its promises. Bypassing the Privatisation Commission (PC), quite a number of SoEs were privatised unlawfully by the ministries concerned. Among them, the ministry of textile and jute performed the best, but allegedly in a blatantly irregular manner.
The fact remains that some unscrupulous persons under the guise of promoters bought those mills and factories at a nominal price, taking advantages of the privatisation programme. Later, they used the public properties as a tool for making money.
Over the 32 years since 1982, as many as 134 jute and textile mills of the public sector were divested. Of this, 48 mills and factories were handed over to the private sector during the time of Abdul Latif Siddique alone, when he was in charge of the ministry concerned.
As per directive of the Prime Minister, the ministry has already initiated the process of taking now back over 100 industrial units, including the 48 textile and jute mills, under government ownership.
Among them, 70 mills that were disinvested in violation of the agreement with the government, appear non-existent. Those exist in paper only. On the land of such mills, various establishments including houses have grown up now. Some entrepreneurs were reported to have 'bought' the SoEs at nominal prices, allegedly in connivance with a section of corrupt PC officials. Such allegations suggest that even the face value of a disinvested unit was several times more than its sold-out price.
Lack of coordination among various public sector agencies and inaccurate valuation of the SoEs hindered the process of privatisation in a transparent manner. The functional role of the PC was also largely unclear. This was partly because of the fact that no firm signal about the future of the privatisation was available from the government.
However, the government did re-open some of the closed jute mills in order to rejuvenate the ailing jute sector. But many loss-making entities in the public sector are still responsible for causing haemorrhage to the public exchequer.
Inefficient management, corruption and worn-out machinery have been sapping the vitality of many public sector mills and factories. Such industries have not even been modernised with the change of time.
Bangladesh slowly opened up some major sectors to private entrepreneurs -- both domestic and international. For example, the government had declared a policy of allowing the setting up of private sector power generation companies to produce and sell power to the government. Approval for such companies had already been given and more may come in the future.
The natural gas and oil exploration business was also made open to the private sector entirely and it appears that this sector is attracting some foreign investment as well. The telecommunications sector was also privatised and a number of private sector telecom operators are now operating in the country.
Meanwhile, the government has reportedly decided to merge the Board of Investment (BoI) with the PC under a scheme now being worked out at the official level to address some pertinent issues.
The merged entity, to be renamed as Bangladesh Investment and Industrial Development Authority (BIIDA), is expected to coordinate and harmonise all trade- and investment-related activities of the government and private agencies responsible for raising the level of investment in the economy.
Reports say it may have powers and functions to give registration to new investment proposals and provide one-stop service to clients. It will also coordinate the investment-related requests with other organisations like Bangladesh Export Processing Zones Authority (BEPZA), Bangladesh Economic Zones Authority (BEZA) and such other bodies to find land and other utility services to them to set up new plants.
The new organisation is being set up, reportedly being based on a Malaysian model. to meet the emerging challenges arising out of a growing interest of many foreign investors from Asian countries and also those beyond in Bangladesh as their new investment destination. The main focus of the proposed BIIDA will be on giving quick and efficient services to foreign and local investors by removing all kinds of bureaucratic hassles.
Past experiences suggest that many good and viable projects had ended up in utter failure due to alleged indifference on the part of the government high-ups, coupled with non-cooperation of different ministries.
Against this backdrop, all concerned would like to see now how the authorities concerned do implement the new task of reclaiming mills and factories from the 'errant' private sector entrepreneurs. This is, no doubt, quite a challenging task.
szkhan@dhaka.net