'Golden handshake' in SoEs still a priority for govt
Shakhawat Hossain | Monday, 21 July 2008
The finance ministry has sought extension of a World Bank (WB) sponsored reform project -- Enterprise Growth and Bank Modernisation (EGBM) -- to help continue the 'golden handshake' programme in public sector commercial banks and enterprises until 2009, said the ministry officials Sunday.
Being the implementing agency of the project, the finance ministry has sought approval of the planning ministry on extension after a series of consultation with the WB.
The continuation of 'golden handshake' or the voluntary retirement scheme (VRS) means further retrenchment of employees from the country's state-owned enterprises (SOEs), said a senior ministry official.
The official, however, said it is imperative for the government to extend the EGBM for the next two years to make full use of the project fund.
The VRS is one of the major components of the EGBM project worth Tk 21.40 billion.
The project, taken in 2004 in line with suggestion by the WB, was scheduled to be ended December last.
Already more than 7000 public employees were offered 'golden handshake' under the VRS during the last couple of years that had cost some Tk 11.33 billion.
"Still some Tk 3.50 billion has remained unutilised under the VRS," said another ministry official.
About Tk 14.83 or 69 per cent of the project cost is meant for VRS activities.
"To make full use of the money the government has no other option but to extend the project life to continue the golden handshake programme," said the official.
The loss incurred by the 44 SoEs was estimated at Tk 52.76 billion in 2007-08 while the amount was nearly Tk 22.76 billion in 2006-07.
The SoE losses has been a headache for the successive governments because together those pose a serious problem in the task of maintaining fiscal balance.
An expert, however, said the 'golden handshake' is not a good option under the present circumstances to reduce the operational losses of the SoEs because of high inflation.
"Public employees will not be encouraged to take VRS," said Bangladesh Institute Development Studies (BIDS) research director Zaid Bakth.
Bakth said: "Nobody wants to be jobless amid double digit inflation."
He said the government should apply some other ways instead of the golden handshake to reduce operational losses of the SoEs.
Private-public partnership could be one of such ways, he said.
Being the implementing agency of the project, the finance ministry has sought approval of the planning ministry on extension after a series of consultation with the WB.
The continuation of 'golden handshake' or the voluntary retirement scheme (VRS) means further retrenchment of employees from the country's state-owned enterprises (SOEs), said a senior ministry official.
The official, however, said it is imperative for the government to extend the EGBM for the next two years to make full use of the project fund.
The VRS is one of the major components of the EGBM project worth Tk 21.40 billion.
The project, taken in 2004 in line with suggestion by the WB, was scheduled to be ended December last.
Already more than 7000 public employees were offered 'golden handshake' under the VRS during the last couple of years that had cost some Tk 11.33 billion.
"Still some Tk 3.50 billion has remained unutilised under the VRS," said another ministry official.
About Tk 14.83 or 69 per cent of the project cost is meant for VRS activities.
"To make full use of the money the government has no other option but to extend the project life to continue the golden handshake programme," said the official.
The loss incurred by the 44 SoEs was estimated at Tk 52.76 billion in 2007-08 while the amount was nearly Tk 22.76 billion in 2006-07.
The SoE losses has been a headache for the successive governments because together those pose a serious problem in the task of maintaining fiscal balance.
An expert, however, said the 'golden handshake' is not a good option under the present circumstances to reduce the operational losses of the SoEs because of high inflation.
"Public employees will not be encouraged to take VRS," said Bangladesh Institute Development Studies (BIDS) research director Zaid Bakth.
Bakth said: "Nobody wants to be jobless amid double digit inflation."
He said the government should apply some other ways instead of the golden handshake to reduce operational losses of the SoEs.
Private-public partnership could be one of such ways, he said.