Revamping jute sector for ensuring long-term viability
Thursday, 26 July 2007
OUT of the existing 22 state-owned loss-making jute mills under the Bangladesh Jute Mills Corporation(BJMC), the government has decided to shut down four under a three-year reform programme. The closure involves job-shedding of 6,000 workers of these four jute mills. But the move will not just stop there and reform, in order to be effective, will encompass more steps for ensuring the long-term viability of the sector. Thus, more 8,000 workers in the state-owned jute sector will lose their jobs in phases through what it is called the 'golden handshake.' An amount Tk. 13.67 billion will be needed to pay off the retrenched workers. The sacked workers of the four mills, as the Adviser concerned said the other day, will get all their dues within August. With funding supports by the ministry of finance, that should come at the earliest.
The rationale for the step is to cut loss as the cumulative losses sustained by the unprofitable mills stand at Tk. 47.7 billion. Once this huge drain on the state-owned jute mills is plugged, the public sector jute mills as a whole, as the expectation is under the reform programme, can be run viably. There is no denying that some of the jute mills of the country have turned into a source of permanent headache for the successive governments. It is not enough to say that the mills were in problem; they were also causing other kinds of problems that were spilling over into their neighbourhoods creating law and order situation. In the eye of a modern result-oriented management, those non-functional mills resembled a creaking wheel that was in line for replacement for long. The donors accordingly did come up with their structural adjustment package to get rid of the losing concerns.
Regardless of the specific nature of the problems facing the state-owned enterprises (SOEs) in the jute sector, the decision is part of the government's move to gradually disinvest those, especially the losing ones. So, there is no point in arguing against this general scheme of things. Notwithstanding that, some uneasy questions still remain. In a very populous country like ours with a high unemployment rate, it is next to impossible to have a second chance after one loses a job. This is more so for the less educated section of the people. When money is fast losing its buying capacity, when the mad horse of price hike is making it harder for people in the low income bracket to make both ends meet, how long will the sacked workers sustain with the money they will get? So, creating self-employment with the money will remain a chimera for them in most cases. In this context, some special programmes will be needed to enable the sacked workers through re-training and other supports for becoming self-employed. The government should devise another scheme, supported by the donors, to create self-employment for the jobless workers with easy credit facility from banks.
When one comes to the issue of bailing out the ailing jute sector, the government should address the needs of the growers at their fields as well as at the market where they face the nearly insuperable hurdle created by the middlemen. The glory of the golden fibre will return when the growers will feel securer. The prospects for the jute industry to come out of the woods are now otherwise bright under today's changed international situation with growing awareness about the environment-friendly character of the natural fibre. With appropriate steps coming in right time and right manner to help revamp the sector, the demand conditions are most likely to improve. Stable supplies at competitive prices which are possible when the industry is run cost-effectively will make its turnaround a reality sooner than later.
The rationale for the step is to cut loss as the cumulative losses sustained by the unprofitable mills stand at Tk. 47.7 billion. Once this huge drain on the state-owned jute mills is plugged, the public sector jute mills as a whole, as the expectation is under the reform programme, can be run viably. There is no denying that some of the jute mills of the country have turned into a source of permanent headache for the successive governments. It is not enough to say that the mills were in problem; they were also causing other kinds of problems that were spilling over into their neighbourhoods creating law and order situation. In the eye of a modern result-oriented management, those non-functional mills resembled a creaking wheel that was in line for replacement for long. The donors accordingly did come up with their structural adjustment package to get rid of the losing concerns.
Regardless of the specific nature of the problems facing the state-owned enterprises (SOEs) in the jute sector, the decision is part of the government's move to gradually disinvest those, especially the losing ones. So, there is no point in arguing against this general scheme of things. Notwithstanding that, some uneasy questions still remain. In a very populous country like ours with a high unemployment rate, it is next to impossible to have a second chance after one loses a job. This is more so for the less educated section of the people. When money is fast losing its buying capacity, when the mad horse of price hike is making it harder for people in the low income bracket to make both ends meet, how long will the sacked workers sustain with the money they will get? So, creating self-employment with the money will remain a chimera for them in most cases. In this context, some special programmes will be needed to enable the sacked workers through re-training and other supports for becoming self-employed. The government should devise another scheme, supported by the donors, to create self-employment for the jobless workers with easy credit facility from banks.
When one comes to the issue of bailing out the ailing jute sector, the government should address the needs of the growers at their fields as well as at the market where they face the nearly insuperable hurdle created by the middlemen. The glory of the golden fibre will return when the growers will feel securer. The prospects for the jute industry to come out of the woods are now otherwise bright under today's changed international situation with growing awareness about the environment-friendly character of the natural fibre. With appropriate steps coming in right time and right manner to help revamp the sector, the demand conditions are most likely to improve. Stable supplies at competitive prices which are possible when the industry is run cost-effectively will make its turnaround a reality sooner than later.