Making a decision on the future of BJMC  

The state-run Bangladesh Jute Mills Corporation (BJMC) is again under attack. This time more strongly than before. Being a state agency in charge of dozens of jute mills, there are of course reasons to question what it has been doing to run the mills efficiently as well as promote jute goods domestically and internationally. The utter failure to rise up to the expectations and needs of the time, especially at a time when the natural fibre should have vastly diversified and value added uses at home and abroad, has been at the centre of focus for long.

There are quarters, stakeholders to be precise, who are in favour of privatising the mills in order that they are managed well, their products diversified and progressively adapted to the changing needs of consumers at home and abroad. One of the key arguments in favour of releasing the mills from the grip of the BJMC is, to put it broadly, the constraint of its being tied to government policies which often come in the way of becoming proactive - a crucial need for a product like jute that needs continuous innovation aided by advanced technology.

Lately, it is none other than the finance minister who hurled the strongest of salvos. He was straightforward when he said the other day that for the interest of the country's jute industry, the state-run BJMC has to go. He came down heavily on the organisation asking for its immediate shut down, alleging it ever-hungry for government funds -- that too in huge sums -- only to see its losses mount.

Established way back in 1972, immediately after the country's independence, BJMC was then deemed to be the appropriate state agency to preside over the just-nationalised jute mills -- in all seventy-seven. The government was initially prepared to take the load of loss and loan burden in the hope that over time the state agency would be able to acquire management and marketing skills required to run the mills productively and profitably. This unfortunately has not happened - and in this it is no exception to other state-run corporations in charge of nationalised mills, factories, even banks.

No doubt, the finance minister being the one to dish out huge sums of money -- Tk 4-5 billion every year -- from the state exchequer is totally dismayed by the returns from BJMC, in terms of losses. However, his strong stance on the future of BJMC is a reflection of inter-ministry rift - between his ministry and the ministry of jute and textile. The state minister in charge of the jute and textile ministry is overtly in conflict with the finance minister's position on the future of jute in the hands of the BJMC. The latter blames the government, particularly the finance ministry, for not doing the needful to keep the ognisation in a better shape in order that it is in a position to ride out the difficulties for revival of the jute sector.

Allegations and counter-allegations apart, it is indeed difficult to endorse the views of either of them. That the BJMC is a white elephant and largely responsible for mismanagement of the jute mills under its control can hardly be contested. But seeking recourse to abolishing it and running the mills under public-private partnership (PPP) as suggested by the finance minister does not look quite reasonable given the state of the PPP programmes in the country.

The problems with the jute sector are often seen as a mix of maladies related to productivity, product development and marketing. There was hardly any systematic plan for continuous research to develop and diversify jute products in keeping with consumer tastes and preferences at home and abroad. Stray initiatives were there, but lack of concerted efforts coupled with fund constraints did not allow those to materialise in a commercially viable manner. No wonder, despite being the second largest producer of raw jute, Bangladesh is still in the age-old sack business, that too without much of a variety. Moreover, lack of BMRE and replacement of rundown machineries are considered by insiders as largely responsible for causing hindrance to better running of the mills.

Under the circumstances, it would be unwise to rush for a decision. Hoping to see the jute industry revamped in private hands is too simplistic an idea. How the mills privatised before are doing is a vital question to ask. And reviewing how things are like in private hands instead of the BJMC should give enough food for thought in making a decision on the future of the jute mills now run under it. Observers will not disagree that the experience of privatisation is not all rosy. This is not to say that letting the mills languish under the BJMC is a good idea. In all fairness, there has to be a well thought-out plan to help the jute mills get over the prevailing crisis so that the prospects that jute keeps promising are best explored.

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