Corruption, mismanagement menace SoEs

Published: 00:05, Jun 17,2019

 
 

THE Bangladesh Economic Review, released as part of budget documents on Thursday, paints a deplorable picture of the affairs in state-owned enterprises, with many experiencing a sustained decline in profits and a number of them seeing a significant increase in their losses. In the first 10 months of the 2018-19 financial year, the state-owned enterprises counted Tk 4,324 crore in losses. At least 13 of the 49 enterprises, as New Age reported on Saturday, became majorly losing concerns while profits of 16 others declined significantly compared with the previous financial year. The finance minister, however, attached importance to proper performance for stabilising the market and ensuring sustainable economic development. His observation tacitly implies that the losses should be attributed to corruption and mismanagement. But what remains worrying is that similar companies in the private sector are reported to have been making profits for years. The situation suggests that corruption and mismanagement have continued to plague the state-owned enterprises for long which the government has conveniently ignored. A situation like this calls for an early government intervention to stop corruption and mismanagement in the enterprises to save public money that has been squandered away.

The Bangladesh Power Development Board comes to be the biggest loss-making public entity, counting Tk 10,271 crore in losses in the first 10 months of the 2018–19 financial year, up from Tk 9,284 crore in the previous fnancial year. The Bangladesh Forest Industries Development Corporation is a new addition to the government’s list of losing concerns with a loss of Tk 7.92 crore in the 10 months. The other loss-incurring government industrial concerns are the Bangladesh Textile Mills Corporation with losses of Tk 24.61 crore which is the highest in 12 years, the Bangladesh Sugar and Food Industries Corporation with losses of Tk 981.96 crore, the Bangladesh Chemical Industries Corporation with losses of Tk 911.43 crore and the Bangladesh Jute Mills Corporation with losses of Tk 695.13 crore. The Bangladesh Steel and Engineering Corporation is the only entity among the state-owned industrial units to made profits, Tk 74.83 crore in the first 10 months of the outgoing financial year. Similar entities and companies in the private sector keep making profits and this means that inappropriate use of government funds, failure in performances and services delivery, corruption, mismanagement and flawed planning may have contributed to the collective failure of state-owned enterprises.

The government, under the circumstances, must investigate why state-owned enterprises fail to perform. After it establishes the reasons, the government must deterrently punish, after credible investigations, the people found responsible for such failures. The government must stop corruption in and improve the management of the entities to save public money.

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