Leasing out of public sector jute mills
Wednesday, 17 October 2007
The jute sector of the economy has been going through the worst times in its history. Situation has come to such a pass that it is now hard to believe that jute was once the biggest foreign exchange earning crop of the country. The largest jute mill, the Adamjee Jute Mills, which once boasted of employing the highest number of workers, is now a thing of the past. The conditions of other jute mills, especially those in the public sector, are also not bright. Recently, four loss-making jute mills have been closed down.
The multilateral lending agencies, especially the World Bank (WB) and the Asian Development Bank (ADB) have been pressuring the successive governments to either privatise or close down the loss-making mills and factories. Small wonder the public sector jute mills have turned out to be a thorn in the side of the government since long. The reason is closing down of jute mills implies loss of hundreds of jobs. Such a decision for mills like the Adamjee means loss of thousands of jobs. One can then easily infer from this the fallout of closing down one unit after another of these labour intensive traditional job-creating industrial ventures. But on the other hand, the reality on the ground is so harsh that it will brook no benevolence towards workers in exchange for an ever-bleeding state exchequer.
There is also yet another side of these industrial ventures of which the backward linkage involves the livelihood of tens of millions of others in the semi-urban and rural backyard. In the marketplaces of the districts, upazilas and villages no end of big and small traders, middlemen, stockists, bailers, moneylenders, you name them, still thrive on the supply of this natural fibre produced by millions of farmers in the villages. Therefore, closure of a jute mill is not simply about job-loss for a few hundred workers and other staffs. In fact, its knock-on effect on the entire economy is far deeper and extensive than it appears on the surface.
That the authorities concerned are growingly awakening to this fact is demonstrated by the moves they have been making to reinvigorate the jute mills now facing losses under new arrangements. The decision to lease out eight unprofitable jute mills, of which four have already been shut down, to the private sector operators, is one such step. Interestingly though, the accumulated loss these jute mills in the public sector had made until 2006 makes a staggering figure of Tk. 47.70 billion. Despite this huge challenge, the cabinet committee on economic affairs with the finance and planning adviser in the chair has taken this bold and innovative decision to inject fresh hopes in those losing concerns.
Except that the mills would be given over to the lessees for a five years' period and that the liabilities of the jute mills under consideration would be met from the lease money, the authorities, however, have not elaborated on the entire set of criteria of the leasing arrangement. All concerned would hope that those criteria have been well thought-out so that those would enable the private operators to run the mills profitably to the benefit of all the parties involved. What is encouraging about those four public sector jute mills still in running condition under the Bangladesh Jute mills Corporation (BJMC) is that the private operators of the mills under the leasing contract will have to keep the job of existing employees. However, in the case of the four closed down mills, the lessees will be able to appoint fresh staff and workers. This is certainly a reassuring piece of news for the workers and staff of those jute mills so far as their jobs are concerned.
The multilateral lending agencies, especially the World Bank (WB) and the Asian Development Bank (ADB) have been pressuring the successive governments to either privatise or close down the loss-making mills and factories. Small wonder the public sector jute mills have turned out to be a thorn in the side of the government since long. The reason is closing down of jute mills implies loss of hundreds of jobs. Such a decision for mills like the Adamjee means loss of thousands of jobs. One can then easily infer from this the fallout of closing down one unit after another of these labour intensive traditional job-creating industrial ventures. But on the other hand, the reality on the ground is so harsh that it will brook no benevolence towards workers in exchange for an ever-bleeding state exchequer.
There is also yet another side of these industrial ventures of which the backward linkage involves the livelihood of tens of millions of others in the semi-urban and rural backyard. In the marketplaces of the districts, upazilas and villages no end of big and small traders, middlemen, stockists, bailers, moneylenders, you name them, still thrive on the supply of this natural fibre produced by millions of farmers in the villages. Therefore, closure of a jute mill is not simply about job-loss for a few hundred workers and other staffs. In fact, its knock-on effect on the entire economy is far deeper and extensive than it appears on the surface.
That the authorities concerned are growingly awakening to this fact is demonstrated by the moves they have been making to reinvigorate the jute mills now facing losses under new arrangements. The decision to lease out eight unprofitable jute mills, of which four have already been shut down, to the private sector operators, is one such step. Interestingly though, the accumulated loss these jute mills in the public sector had made until 2006 makes a staggering figure of Tk. 47.70 billion. Despite this huge challenge, the cabinet committee on economic affairs with the finance and planning adviser in the chair has taken this bold and innovative decision to inject fresh hopes in those losing concerns.
Except that the mills would be given over to the lessees for a five years' period and that the liabilities of the jute mills under consideration would be met from the lease money, the authorities, however, have not elaborated on the entire set of criteria of the leasing arrangement. All concerned would hope that those criteria have been well thought-out so that those would enable the private operators to run the mills profitably to the benefit of all the parties involved. What is encouraging about those four public sector jute mills still in running condition under the Bangladesh Jute mills Corporation (BJMC) is that the private operators of the mills under the leasing contract will have to keep the job of existing employees. However, in the case of the four closed down mills, the lessees will be able to appoint fresh staff and workers. This is certainly a reassuring piece of news for the workers and staff of those jute mills so far as their jobs are concerned.