Exit policy for sick industries under preparation: Dilip Barua
Sunday, 24 January 2010
Sheikh Shahariar Zaman
The government is trying to put in place an exit policy for sick industries with a view to clearing the burden of unutilised resources, Industry Minister Dilip Barua said.
In an interview with the FE late last week, Mr Barua said the private sector will play the dominant role for industrialisation to create more employment opportunities and eradicate poverty in the country.
The government would continue to facilitate the private sector in whatever capacity possible. The draft Industrial Policy 2009 has already been formulated keeping in mind the interests of the private sector, he said.
The objective of the policy is to have a vibrant and dynamic industrial sector that would help eradicate poverty, create employment opportunities, raise people's income and, thus, ensure prosperity, he added.
The ministry has sent the policy to the cabinet division for approval and it will soon be okayed, Mr Barua said.
He said during the last one year, the ministry identified several hindrances to industrialization.
"Interest rate is one major problem and it should be brought down to a single digit level," he said.
The documentation process is also very cumbersome and it needs to be simplified, he suggested.
"Efficient and effective one-stop service should be launched to provide better service to businesspeople," he said.
The public sector does no more play any dominant role in the industrial sector as the state-owned enterprises (SoEs) are not many in numbers.
"The SoEs are no longer a burden on the government as most of them are profitable," he said.
Out of eight companies under Bangladesh Steel and Engineering Corporation (BSEC), seven are profitable and the fertilizer factories are also making profits, he added.
The companies have become profitable as the grand alliance government has been able to reduce pilferage and control corruption in procurement, the minister said.
"The main problem occurs when raw materials are purchased at higher prices and the finished goods sold at lower prices."
He, however, said the state-owned sugar mills are in red due to mismanagement during the tenures of the past governments.
"We inherited the loss-making mills as they were neglected by the previous governments."
The industry ministry is trying to facilitate acceleration of new investment activities, which remains the only way to create employment, he said.
"We are able to remove the negative perception of the businesspeople towards the ministry," he added.
The businessmen used to think that the ministry's only job was to sell SoEs at a lower price but now they admit that 'the ministry plays an instrumental role in making rules and regulations for development of the industrial sector.'
"We are trying to create an industry-friendly environment to make the country a prosperous and industrialized one."
The government is trying to formulate an exit policy for sick industries as to clear the burden of unutilized resources, Mr Barua said.
"It is a continuous process as today's profitable industry can become sick tomorrow," he said.
A profitable organization can be a loss-making unit for many unknown or unseen reasons and to tackle the situation, there should be a law regarding the sick industries, he added.
The minister lamented that due to the greed of some unscrupulous bankers, many industries have become sick.
He, however, cautioned all concerned about taking undue benefit in the name of sick industries.
"There are many industrialists who intentionally made their industries sick to get government support and interest waiver."
Mr Barua said there should be a comprehensive industrialisation policy and power is an integral part of that.
"Energy and power are the pre-requisites for industrialization and the government is aware of that."
In the next six months, 500 megawatt of electricity will be added to the national grid and another 1000 MW by this year, he claimed.
"Within a very short time, the country will get rid of power crisis," he said optimistically.
The minister categorically said the government might consider the decision to offload the shares of SoEs in the market.
"The profit-making SoEs may raise funds in the future for their expansion."
When his attention was drawn to the recent announcement by the finance minister about offloading stakes of 26 SoEs in the market, he said, "I am not in full know about this issue."
The minister said he is not aware whether any profitable company under the sector corporations of the ministry of industries is on the list of 26 SoEs or not.
"Neither the finance minister nor the finance ministry informed us the names of the selected companies."
He, however, said the offloading of SoE shares is a policy matter and it will be taken at the highest body of the government i.e. the cabinet.
The recent visit of the Bangladesh prime minister to India was a very successful one and it will open a new door of cooperation and trust between the two neighbouring countries, the minister said.
"The Indian investors will be interested to invest in the country and the products they produce can be exported to the north-eastern states of India," he said.
Bangladesh exporters can also have the opportunities to export to the north eastern states of India as it is a big market, he added.
Non-tariff and other barriers will be removed as the two governments have warm relationship, Mr Barua said.
The multi-modal connectivity among Bangladesh, India, Nepal and Bhutan would help Dhaka development of communication network, he added.
Replying to a question, the industries minister noted that investments in information communication technology (ICT) and high-value added segment of the garments industry hold out bright long-term prospects for Bangladesh.
The government is trying to put in place an exit policy for sick industries with a view to clearing the burden of unutilised resources, Industry Minister Dilip Barua said.
In an interview with the FE late last week, Mr Barua said the private sector will play the dominant role for industrialisation to create more employment opportunities and eradicate poverty in the country.
The government would continue to facilitate the private sector in whatever capacity possible. The draft Industrial Policy 2009 has already been formulated keeping in mind the interests of the private sector, he said.
The objective of the policy is to have a vibrant and dynamic industrial sector that would help eradicate poverty, create employment opportunities, raise people's income and, thus, ensure prosperity, he added.
The ministry has sent the policy to the cabinet division for approval and it will soon be okayed, Mr Barua said.
He said during the last one year, the ministry identified several hindrances to industrialization.
"Interest rate is one major problem and it should be brought down to a single digit level," he said.
The documentation process is also very cumbersome and it needs to be simplified, he suggested.
"Efficient and effective one-stop service should be launched to provide better service to businesspeople," he said.
The public sector does no more play any dominant role in the industrial sector as the state-owned enterprises (SoEs) are not many in numbers.
"The SoEs are no longer a burden on the government as most of them are profitable," he said.
Out of eight companies under Bangladesh Steel and Engineering Corporation (BSEC), seven are profitable and the fertilizer factories are also making profits, he added.
The companies have become profitable as the grand alliance government has been able to reduce pilferage and control corruption in procurement, the minister said.
"The main problem occurs when raw materials are purchased at higher prices and the finished goods sold at lower prices."
He, however, said the state-owned sugar mills are in red due to mismanagement during the tenures of the past governments.
"We inherited the loss-making mills as they were neglected by the previous governments."
The industry ministry is trying to facilitate acceleration of new investment activities, which remains the only way to create employment, he said.
"We are able to remove the negative perception of the businesspeople towards the ministry," he added.
The businessmen used to think that the ministry's only job was to sell SoEs at a lower price but now they admit that 'the ministry plays an instrumental role in making rules and regulations for development of the industrial sector.'
"We are trying to create an industry-friendly environment to make the country a prosperous and industrialized one."
The government is trying to formulate an exit policy for sick industries as to clear the burden of unutilized resources, Mr Barua said.
"It is a continuous process as today's profitable industry can become sick tomorrow," he said.
A profitable organization can be a loss-making unit for many unknown or unseen reasons and to tackle the situation, there should be a law regarding the sick industries, he added.
The minister lamented that due to the greed of some unscrupulous bankers, many industries have become sick.
He, however, cautioned all concerned about taking undue benefit in the name of sick industries.
"There are many industrialists who intentionally made their industries sick to get government support and interest waiver."
Mr Barua said there should be a comprehensive industrialisation policy and power is an integral part of that.
"Energy and power are the pre-requisites for industrialization and the government is aware of that."
In the next six months, 500 megawatt of electricity will be added to the national grid and another 1000 MW by this year, he claimed.
"Within a very short time, the country will get rid of power crisis," he said optimistically.
The minister categorically said the government might consider the decision to offload the shares of SoEs in the market.
"The profit-making SoEs may raise funds in the future for their expansion."
When his attention was drawn to the recent announcement by the finance minister about offloading stakes of 26 SoEs in the market, he said, "I am not in full know about this issue."
The minister said he is not aware whether any profitable company under the sector corporations of the ministry of industries is on the list of 26 SoEs or not.
"Neither the finance minister nor the finance ministry informed us the names of the selected companies."
He, however, said the offloading of SoE shares is a policy matter and it will be taken at the highest body of the government i.e. the cabinet.
The recent visit of the Bangladesh prime minister to India was a very successful one and it will open a new door of cooperation and trust between the two neighbouring countries, the minister said.
"The Indian investors will be interested to invest in the country and the products they produce can be exported to the north-eastern states of India," he said.
Bangladesh exporters can also have the opportunities to export to the north eastern states of India as it is a big market, he added.
Non-tariff and other barriers will be removed as the two governments have warm relationship, Mr Barua said.
The multi-modal connectivity among Bangladesh, India, Nepal and Bhutan would help Dhaka development of communication network, he added.
Replying to a question, the industries minister noted that investments in information communication technology (ICT) and high-value added segment of the garments industry hold out bright long-term prospects for Bangladesh.