Leading donors to seek govt clarification on privatisation, EPZ issues
Wednesday, 13 May 2009
Mushir Ahmed
The government's apparent halt of privatisation and the handover of an extension of Export Processing Zone (EPZ) have irked the country's donors, an official of a leading multilateral capital donor agency said Tuesday.
"We'll raise these issues with the government," he said.
He said the donors would seek a clear government stand on the privatisation and a halt on the EPZ handover back to the food department, "which sends a wrong signal to the foreign investors."
The government has sold off 49 enterprises between 1991 and 2006, but many of these ventures were later closed down by their new owners.
An important government functionary said earlier this month the privatisation in the past couple of decades has led to gross abuse of state wealth and the land of the disinvested ventures were mostly used for purposes other than industry.
"We don't know whether the government has in fact suspended its privatisation process. There is no clear decision from the cabinet yet," the official of the lender agency said.
"The SOEs are a drag on the government's resources, draining hard-earned money that would have been better spent."
The World Bank has in the past few years tied up their financing to disinvestment of the loss-making ventures. It was their advice that prompted the previous BNP-led government to shut down Adamjee Jute Mills and try to sell off Rupali Bank.
Although officials said only a few SOEs are left to be privatised, enterprises like the Bangladesh Petroleum Corporation and Biman bleed more than a billion dollars a year -- roughly equal to half the loans the country takes from donors annually.
Leading donors have also expressed their displeasure at the decision to cancel some 14 plots allocated to foreign investors and return the land at the formerly Halishahar foodstore in Chittagong back to where it belonged.
"It was quite unexpected. It will have a very bad impact on the country's foreign direct investment. The investors who have already invested there could seek compensation," he added.
"It would also make potential investors to think twice about investing in Bangladesh."
The investors, mainly from Taiwan have already stated that they would take the matter to the international court as they have already built up their facilities and even took orders from buyers.
The government's apparent halt of privatisation and the handover of an extension of Export Processing Zone (EPZ) have irked the country's donors, an official of a leading multilateral capital donor agency said Tuesday.
"We'll raise these issues with the government," he said.
He said the donors would seek a clear government stand on the privatisation and a halt on the EPZ handover back to the food department, "which sends a wrong signal to the foreign investors."
The government has sold off 49 enterprises between 1991 and 2006, but many of these ventures were later closed down by their new owners.
An important government functionary said earlier this month the privatisation in the past couple of decades has led to gross abuse of state wealth and the land of the disinvested ventures were mostly used for purposes other than industry.
"We don't know whether the government has in fact suspended its privatisation process. There is no clear decision from the cabinet yet," the official of the lender agency said.
"The SOEs are a drag on the government's resources, draining hard-earned money that would have been better spent."
The World Bank has in the past few years tied up their financing to disinvestment of the loss-making ventures. It was their advice that prompted the previous BNP-led government to shut down Adamjee Jute Mills and try to sell off Rupali Bank.
Although officials said only a few SOEs are left to be privatised, enterprises like the Bangladesh Petroleum Corporation and Biman bleed more than a billion dollars a year -- roughly equal to half the loans the country takes from donors annually.
Leading donors have also expressed their displeasure at the decision to cancel some 14 plots allocated to foreign investors and return the land at the formerly Halishahar foodstore in Chittagong back to where it belonged.
"It was quite unexpected. It will have a very bad impact on the country's foreign direct investment. The investors who have already invested there could seek compensation," he added.
"It would also make potential investors to think twice about investing in Bangladesh."
The investors, mainly from Taiwan have already stated that they would take the matter to the international court as they have already built up their facilities and even took orders from buyers.