SoEs: To privatise or not

It has become, as though by default, a custom now-a-days that for actions to follow in the form of correction, there has to be elaborate foul-play -- monstrous enough to cause public uproar. So, it is not until the misdeed is too heavily laden that the government remains listless, and waits for things to go totally down the tunnel to finally sit up.
The recent move of the government to reclaim errant privatised mills and factories followed by the Prime Minister's directive may well be seen as a case in point. The directive came a day after the concerned former minister Abdul Latif Siddiqui, charged with hurting religious sentiments of the people by his inappropriate remarks, was sacked, albeit under unprecedented pressure from all conceivable quarters, including the party in power.
Now that the directive has come so strongly from the highest level, it will be worthwhile for the authorities to revisit the terms and conditions that led to the privatisation of a large number of state-owned enterprises (SoEs), especially those under the ministry of jute and textiles. In line with the PM's directive, the ministry is reportedly preparing to take steps to reclaim the mills and industries from private entrepreneurs who failed to resume operation. The directive came following recommendations by a committee of the Prime Minister's Office (PMO) that found 47 state-owned jute mills and factories sold/leased out to private hands during 2009-2013. The handing over took place reportedly either without inviting tenders or in violation of regular practices. The committee's report recommended that the government should reclaim them. The PM further announced that no state-owned industry would be leased out or sold from now on. She also asked the ministry to find ways for allocating unused lands of government-owned industries to private entrepreneurs for producing, processing and development of jute goods on small plots to ensure the best use of lands.
It may be recalled that the country's print media was highly critical of the activities of the former minister concerned while he was in charge of the jute and textile ministry during his previous tenure. Large-scale privatisation of state-owned mills in utter disregard for rules and practices made lead news stories in the dailies - however, with no visible reaction in the behaviour of the government. One does find it difficult to reason how the ministry that he ran (ruled) at that time was totally cowed to servitude that none bothered to raise the slightest protest? Or, did they? It would be interesting to know if anybody considered the acts improper.  
Given the deep-seated political culture in the country, charging a sitting minister for any act of misuse of authority -- meaning corruption in most cases -- is not in fashion because it is viewed to demean the honour and dignity of the party in power. But looking at the issue differently, one finds that had the minister concerned been charged earlier with the wrong-doings now being framed against him, the government would have gained greater mileage than it hopes to gain from sacking him on charges of his sacrilegious remarks. After all, what does one see at the moment? The controversial minister lost his job not because of the alleged squandering of public properties but for his irresponsible remarks amongst a group of his peers far away from home.         
Coming to the leasing/selling of the SoEs, it has been a grim reality for decades that the burden of these mostly loss-incurring enterprises made it a case for successive governments to deal with these in whatever ways they considered befitting. The only solution they found suitable was to gradually let the enterprises go off the inefficient hands to private owners. So, the practice was on, and under various pretexts these mills and factories were handed over to private ownership.
Privatisation of the SoEs was questionable during the tenure of all previous regimes. Reports in the media on the current state of the privatised SOES show that a majority of the mills and factories are either not in operation or are being used for purposes not allowed as per the terms of handing over. Since the establishment of the Privatisation Board in 1993 and thereafter the Privatisation Commission in 2000, major sectors for privatisation comprised industry, power, gas and water, transport and communications, trade, agriculture, construction and services. A close survey of such privatised enterprises would reveal many irregularities, including using vacant spaces for non-productive purposes.
The decision to reclaim nonfunctioning enterprises is no doubt a strong one. However, it remains uncertain whether the government would at all be in a position to stick to its stand given the tough prospect of winning legal tussles.
In this connection, the decision not to allow further privatisation of the SoEs does not sound realistic. This decision, sparked by the irregularities committed in the privatisation process, must not be seen as a cure for the loss-making enterprises. There is no point for the state coffer to be routinely drained to keep such enterprises alive, albeit on life-support? This is in essence a governance issue. Staying away from making the loss-making SoEs into profit-making ones for fear of corrupt bureaucracy and political manipulations should not be construed as a good idea at all. Thus, if the government is determined not to allow minimum irregularities, there is no reason why the loss-making entities should feast on taxpayers' money.  
As for utilising spare/unused lands in the SoEs, there has been a move for sometime to lease those out to small entrepreneurs for various productive purposes. The move did not work as it smelt a rat in the way the proposals were being cooked. Now, if the government considers it appropriate to use such spare lands for productive purposes, it should devise the mechanism in a planned manner, preferably by instituting a competent committee. The recent suggestion of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for creation of small-sized apparel zones in the closed and loss-incurring SoEs by relocating garment factories may also be looked into.

wasiahmed.bd@hotmail.com