Editorial
Responding to brighter jute prospects
The approach must be grounded in reality
In the northern region of the country, small and medium private sector jute enterprises are springing up -- thanks to a spurt in bank-rolling. The prospects for export of quality raw jute and jute manufactures have brightened for some time past. This is in direct proportion to the synthetic products losing ground in the world market which is showing a greater preference to natural fibre in an era of climate change.
Not only is the jute a cash crop but it has also a great potential for job creation in the manufacturing sector of a wide variety of jute goods. Thus its place in the economy remains undimmed. While, therefore, welcoming the new trend in private sector enthusiasm, we also notice a new move aimed to bolster jute industry in the public sector. A restructuring plan to revamp 27 state-owned jute mills to turn them into profitable concerns is being finalised. The idea is to hand these over to 'efficient and experienced entrepreneurs' who then would run these as public holding companies off-loading shares to the capital market to garner finance.
While governments have usually sought to divest sick industries there have been few takers of losing concerns. Besides, these ran up huge debts with the banks. Take for instance the 27 public sector jute mills of which 19 are in operation. But just; for these have accumulated Tk 2060 crore in defaulted loan. Last year alone, these were in the red to the tune of Tk 91 crore. Evidently it is a tall order to transform them into profitable business. The state-owned banks refusing to lend them money and government counting huge amount in subsidy, something extraordinary had to be thought up. In brass-tacks, Bangladesh Bank has refinanced 16 jute mills by an injection of Tk 500 crore to buy raw jute for the next season. And the BJMC's own requirement is Tk 365 crore in the current season.
The basics must be gotten right. It is at the productivity level that the government must focus on. We need to produce quality jute and ensure remunerative prices to farmers who received a raw deal in the last season because of a glut. The machinations of the farias will have to be checkmated through quicker lifting at the growers' level much as the latter are supplied with timely inputs.
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