End of state-owned jute mills: so why close when you're able to reform?

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So it is official now. The federal government is heading to shut down all 25 state-owned jute mills managed by Bangladesh Jute Mills Company (BJMC) and lay off about 25,000 staff associated with them. The primary minister approved the decision on Thursday, relating to UNB, putting an end to speculations pursuing an announcement by the textiles and jute minister compared to that effect last Sunday. Unless there exists a reversal of decisions which is definitely unlikely at this stage, we will witness a historic point in time for Bangladesh's jute industry, although it's not the main one we were promised, nor can we let it pass without right scrutiny of what provides led to this minute and what we could have done to avoid it.

Here's what we realize so far: the wages and benefits of all current workers (24,886) and the dues of 8,956 already retired personnel of those jute mills will be paid within "the quickest practical time", said the main secretary to the primary minister. A Tk 5,000-crore fund will come to be allocated for this function. On average, each worker will get Tk 13.86 lakh, and the payments will be made directly to their bank accounts. As for the continuing future of the laid-off employees, we are informed that they would learn and "granted priority" in recruitment to the mills if they happen to be "modernised" and "reopened" under Public-Individual Partnerships, or various other joint ventures, or through leasing out to third celebrations. Details for the reason that department remain a little sketchy.

The official narrative pins the blame for today's situation on BJMC's insufficient profitability, saying it had recorded a cumulative lack of Tk 10,674 crore from 1972 until 2018-19 and can't be viable when confronted with competition from private mills. That is no doubt an enormous red flag for just about any industry, specifically in the center of a pandemic when even profit-making industries happen to be struggling. But what the officials have conveniently glossed over 's the reason behind this change of events. BJMC might have been a rudderless ship but it's not unmanned. It's manage by real people, who've let it rot in a bottomless pit of corruption, mismanagement, insufficient coordination, inefficiencies, etc.

So what we aren't being told is that loss or lack of profitability, as an excuse for outsourcing development to the private sector, is merely a semantic sleight of side to let these persons and their enablers off the hook. We've observed the same excuse peddled during the past, striving to justify occasional closure or privatisation of some mills. We've read it when the personnel went on hunger marches to demand their dues. Insufficient profitability is normally a long-worn-out excuse by now, and it's really frightening that it might be used to pass loss of life sentence to a sector that, if properly run, has so very much to provide to this nation. 

Jute is called "golden fibre" not simply since the fibre is golden. It's called so since it also offers a golden possibility to turn our market around. Jute may be the second most significant natural fibre with regards to global intake after cotton, and Bangladesh provides ample to offer. The country's jute developing sector, among its oldest traditional making sectors, emerged in erstwhile East Pakistan in the early 1950s, with the founding of Adamjee Jute Mills. Through the 1960s and 1970s, this sector accounted for a major share of the countrywide income. IN-MAY 1972, after Bangladesh started to be independent, the government nationalised the market to streamline exports. Ironically, the key reason cited for this maneuver was to "check corruption" in the sector and guarantee fair prices for jute manufacturers. In 1973, its contribution in the overall nationwide export was 89.9 percent. It had been a golden period for the golden fibre.

In the 1980s, however, it commenced to lose its lustre, after synthetic components like polythene and plastics were introduced. This led to a gradual decline in its show of the countrywide export, overall forex earnings and the Gross Domestic Product (GDP). The go up of the RMG sector, regressive plans of successive governments and the drive for privatisation were as well in charge of the decline. Adamjee Jute Mills was shut down in 2002. Today, so far as public guidelines go, jute is present as a glorified relic from the past. After a limited period of euphoria over the promulgation the required Jute Packaging Act, 2010, which paved just how for compulsory make use of jute product packaging for 17 products, things have come full circle, culminating with the closure of most state-possessed jute mills in a single fell swoop.  

The annals of jute in independent Bangladesh is thus one of unutilised potential and unfulfilled promises. From the wholesale nationalisation in 1972 to the low cost denationalisation in 2020, the trajectory of the industry shows not simply its declining charm or performance over time. It's also, significantly, an indictment of the stop-commence approach of successive governments that either do an excessive amount of or inadequate, ignoring the long-term implications of their action. So it's little wonder they have chosen a fairly easy exit when push came to shove, instead of taking up the strenuous job of reforming it from the bottom up.

The official narrative about closing and "reopening" the mills under private arrangements and reemploying the personnel raises some questions: how do the personnel trust this promise when there is a well-documented history of the authorities failing to give them their rightful dues or break the all-powerful hold of syndicates over this industry? What promise do they possess that their dues will get paid completely or they'll be given right wages in the privatised mills? Can denationalisation eradicate the way of life of corruption and mismanagement hence entrenched in the market? Why were the calls for modernisation to create those mills rewarding ignored when it is obvious that it could have cost the federal government a lot less than its Tk 5,000-crore settlement package? Why did the federal government consider this decision particularly when there are signals that jute is producing a comeback finally?

The last point is specially significant. According to info from the Export Promotion Bureau (EPB), exports of jute and jute goods increased by about 4 percent in the first 11 weeks of FY 2019-2020. Through the same period, exports of readymade garments declined by about 19 percent and exports of leather merchandise declined by about 22 percent. In the process, the jute sector surpassed household leather to take the next place in Bangladesh's general export trade. On the other hand, the RMG bloodbath remains apace as global customers withdraw orders or won't pay the manufacturers. Various migrant workers have previously came back to Bangladesh after losing their careers in the pandemic, producing a large dent in its remittance income. Experts say in these tricky and changing occasions, sectors like livestock, jute, and agriculture can play a significant role in our financial recovery. Why, in that case, is this regressive proceed to close so various jute mills simultaneously which might set us again years, if not decades?

It's worth noting that recently there has been a good resurgence of interest found in jute globally, thanks to the rise found in environmental consciousness and greening strategies appearing adopted to combat environment modification. In the coming times, there will be an enormous demand for jute products and Bangladesh can be a global head in this sector. The individual mills are upgrading to the duty as best as they can but we are in need of those 25 open public mills to get ready to go again. We are in need of them to come to be refurbished with modern day equipment to start making profits. And we are in need of those laid off personnel to be back the video game, both for their sake and the sake of the country. Proper strategies, efficient control and diversified jute items are key to achievement in this scenario.

The jute industry stands at a crossroads-we have to choose our next path very carefully.
Source: https://www.thedailystar.net

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