Jute sector in national spotlight again
Monday, 20 August 2007
Shamsul Huq Zahid
Jute has become almost a history. None except for jute growers and the management of a declining band of public and private jute mills cares much about it.
Farmers who are still growing jute, in most cases, are doing it under compulsion. For, the land where they grow jute is not suitable for cultivation of any other crop during that particular period of the year. And the owners and management of both private and public sector jute mills are fighting a losing battle for survival. They do know that the extinction of the sector is inevitable and what is happening now is a slow but painful journey to the ultimate destination.
Yet the sector that once considered the lifeline of the country's economy occasionally comes in the national spotlight and triggers heated debate over the origin of the problems that have brought the jute to the death-row. However, debate or controversy, whatever you call it, is also seasonal and does not last long and the situation returns to its original position.
About a couple of years back, there were talks about the revival of the jute sector following resurgence in demand for the 'Golden Fibre' internationally. Even it was reported in the media that the then government was planning to reopen the closed jute mills under its ownership to cope with the growing demand for jute goods abroad, particularly from Syria, Ghana, Australia, Japan and some EU countries. An enthusiastic jute minister of the immediate past political government sought a minimum amount of fund from the ministry of finance for procuring jute for BJMC mills. But the finance ministry pouring water on the jute ministry's enthusiasm allocated a paltry amount of money. However, the finance ministry's miserly attitude so far as public sector jute mills is concerned had not been out of context. For, these mills proved to be all-devouring ones because of their built-in deficiencies, including inefficiency and corruption.
After two years, the future of the jute sector is being discussed again, following the interim administration's decision to close down a number of jute mills and the growing discontent among the thousands of jute mill workers who clashed with the law enforcers in Khulna and Chittagong demanding their arrear wages and other benefits.
If one traces the origin of the problems of jute, one has to go back to the post-independence days. Sweeping nationalisation of jute mills and appointment of administrators of dubious background to run those caused the first damage to a sector that constituted the backbone of the economy of a newly independent country. Inefficiency, wholesale plunder and mismanagement soon brought the nationalised jute mills to deplorable state. That was actually beginning of the end of the sector. All the governments that adorned the seat of power since the post-1975 political changeover allowed the deplorable state of the public sector jute mills to continue, except for transferring a few mills to the private sector. However, the situation with the privately-owned jute mills, barring the twine and spinning mills, is no better than that of the state-owned ones. Most of the private sector jute mills with the production level down to 50 per cent of their actual capacity are also counting their days.
The public sector jute mills, which have incurred losses worth billions of Taka over the years, owe a substantial amount of money to banks, jute traders, workers and the government. It is hard for the government to settle all the dues in one go. Statistics, thus, are galore to substantiate the deplorable state of the jute industry.
While blaming mismanagement and corruption on the part of a section of local people, outsiders, including the World Bank (WB), are also blamed for the present state of affairs in the country's jute sector. The then government sent 30,000 jute workers on voluntary retrenchment scheme (VRS) with the fund from the WB under the Jute Sector Restructuring Programme (JSRP) in 1994. The WB is also accused of putting pressure on successive governments for closing down a number of jute mills, including the world's largest one-the Adamjee Jute Mills, on the plea of their financial non-viability.
The WB is also accused of protecting the interest of neighbouring India where, reportedly, there had been a revival of the jute sector. There exists, rightly or wrongly, a general perception here that the WB is promoting the Indian jute sector at the cost of the one in Bangladesh. Statistics rather strengthen such a suspicion. The production of jute in India has more than doubled while the same has declined by nearly 50 per cent in Bangladesh. While a large number of jute mills in Bangladesh have been closed down, the jute mills in the Indian state of West Bengal are going through a process of revival.
There is no denying that people, rightly or wrongly, tend to blame the Bretton Wood institutions for most economic ills in poor developing countries. The accusation relating to the decline of the Bangladesh jute sector is one. However, the WB, if it deems fit, should come out with facts and figures to claim its innocence. However, the WB may like to avoid getting stuck up in any controversy. But the fact remains that it is very much at the centre of the controversy. It is better to explain its position to dispel confusion, if there is any, about its role.
Jute has become almost a history. None except for jute growers and the management of a declining band of public and private jute mills cares much about it.
Farmers who are still growing jute, in most cases, are doing it under compulsion. For, the land where they grow jute is not suitable for cultivation of any other crop during that particular period of the year. And the owners and management of both private and public sector jute mills are fighting a losing battle for survival. They do know that the extinction of the sector is inevitable and what is happening now is a slow but painful journey to the ultimate destination.
Yet the sector that once considered the lifeline of the country's economy occasionally comes in the national spotlight and triggers heated debate over the origin of the problems that have brought the jute to the death-row. However, debate or controversy, whatever you call it, is also seasonal and does not last long and the situation returns to its original position.
About a couple of years back, there were talks about the revival of the jute sector following resurgence in demand for the 'Golden Fibre' internationally. Even it was reported in the media that the then government was planning to reopen the closed jute mills under its ownership to cope with the growing demand for jute goods abroad, particularly from Syria, Ghana, Australia, Japan and some EU countries. An enthusiastic jute minister of the immediate past political government sought a minimum amount of fund from the ministry of finance for procuring jute for BJMC mills. But the finance ministry pouring water on the jute ministry's enthusiasm allocated a paltry amount of money. However, the finance ministry's miserly attitude so far as public sector jute mills is concerned had not been out of context. For, these mills proved to be all-devouring ones because of their built-in deficiencies, including inefficiency and corruption.
After two years, the future of the jute sector is being discussed again, following the interim administration's decision to close down a number of jute mills and the growing discontent among the thousands of jute mill workers who clashed with the law enforcers in Khulna and Chittagong demanding their arrear wages and other benefits.
If one traces the origin of the problems of jute, one has to go back to the post-independence days. Sweeping nationalisation of jute mills and appointment of administrators of dubious background to run those caused the first damage to a sector that constituted the backbone of the economy of a newly independent country. Inefficiency, wholesale plunder and mismanagement soon brought the nationalised jute mills to deplorable state. That was actually beginning of the end of the sector. All the governments that adorned the seat of power since the post-1975 political changeover allowed the deplorable state of the public sector jute mills to continue, except for transferring a few mills to the private sector. However, the situation with the privately-owned jute mills, barring the twine and spinning mills, is no better than that of the state-owned ones. Most of the private sector jute mills with the production level down to 50 per cent of their actual capacity are also counting their days.
The public sector jute mills, which have incurred losses worth billions of Taka over the years, owe a substantial amount of money to banks, jute traders, workers and the government. It is hard for the government to settle all the dues in one go. Statistics, thus, are galore to substantiate the deplorable state of the jute industry.
While blaming mismanagement and corruption on the part of a section of local people, outsiders, including the World Bank (WB), are also blamed for the present state of affairs in the country's jute sector. The then government sent 30,000 jute workers on voluntary retrenchment scheme (VRS) with the fund from the WB under the Jute Sector Restructuring Programme (JSRP) in 1994. The WB is also accused of putting pressure on successive governments for closing down a number of jute mills, including the world's largest one-the Adamjee Jute Mills, on the plea of their financial non-viability.
The WB is also accused of protecting the interest of neighbouring India where, reportedly, there had been a revival of the jute sector. There exists, rightly or wrongly, a general perception here that the WB is promoting the Indian jute sector at the cost of the one in Bangladesh. Statistics rather strengthen such a suspicion. The production of jute in India has more than doubled while the same has declined by nearly 50 per cent in Bangladesh. While a large number of jute mills in Bangladesh have been closed down, the jute mills in the Indian state of West Bengal are going through a process of revival.
There is no denying that people, rightly or wrongly, tend to blame the Bretton Wood institutions for most economic ills in poor developing countries. The accusation relating to the decline of the Bangladesh jute sector is one. However, the WB, if it deems fit, should come out with facts and figures to claim its innocence. However, the WB may like to avoid getting stuck up in any controversy. But the fact remains that it is very much at the centre of the controversy. It is better to explain its position to dispel confusion, if there is any, about its role.