Editorial
4 years ago

In search of genuine PPP  

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The latest news regarding 22 mills under the Bangladesh Jute Mills Corporation (BJMC) has created mixed reactions in various quarters. While economists and financial analysts have long been expressing dismay at the horrible state of affairs inside government-owned mills, whose only work seemed to be loss-making, over 25,000 workers and their family members have been placed face-to-face with a bleak future. Although the official announcement has been that these mills will now be run on Public Private Partnership (PPP) basis, experience with PPP in some other areas left scope for questioning. Some experts tend to believe this might indeed stray into denationalising the mills with all the properties they have. The government, however, in a high-powered meeting very recently has been quick to point out that these mills will indeed be modernised under PPP and all workers considered fit in a future scenario will be readmitted. Besides that arrangements have been made to pay arrear salary of the workers. A hundred-crore fund, considered by many as too paltry, will start payments from next September, with the ultimate amount rising up to five thousand crores. The Prime Minister in the meanwhile has asked all concerned to clear all dues of the jute mill workers. 

Jute has been a headache for the policymakers ever since the early nineties because of economic reforms. Ups and downs in the world market have seen its glorious past take dips. About 30,000,000 people of the country depend on jute production and jute industry in different ways. That a wholesale nationalisation in the post-independence days did not necessarily do good was proved in the subsequent days through an endless stream of subsidies. The case of Adamjee Jute Mills has shown that continuous subsidy cannot make an entity survive in a competitive world. At the moment over 95 per cent of the jute mills of the country are privately owned and they make money. The remaining five per cent, government-owned, have been a continuous drainage on public resources. Mismanagement and corruption have been cited as the major causes. Apart from that the basic reason that a market mechanism works better than a moribund state ownership may have something to do here. The government must not do business, it has to help business.

Coming back to the proposed PPP for the two dozen BJMC jute mills, the most important thing to remember will be to ensure that it become the real thing in matters of modernisation, efficiency and cost-cutting. Besides, the huge landed property that they have must be protected at any cost: no unholy alliance must be allowed to be formed to thwart the underlying aim of the effort. Past experience with PPP is not praiseworthy. This latest effort deserves to set up a unique example in which a willing public sector will help the growth of modernised jute mills with the help of resurgent private entrepreneurs. The prospects are huge in view of the environmental ascendancy of the natural fibre over synthetics. Lethargy, mismanagement, corruption and wastage cannot have any place in the new protocol. Besides, experienced hands from the existing mills must have their doors open for future employment.

Since Bangladesh always figured prominently in international jute trade, the two dozen mills, once modernised and set on a sound PPP footing, would no doubt contribute to the legacy.

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