Historic potential of jute sector ignored, yet again

Published: 00:00, Jun 30,2020


THE jute sector, which was once the glory of our national economy, has been struggling to survive for mismanagement and corruption and the last nail in the coffin appears to have come with the decision to close all 22 state-owned jute mills and laying off 24,886 workers. The textile and jute minister in a virtual press briefing on Sunday informed that the government made the decision on the ground that the sector is incurring loss due to its out-dated infrastructure and high production cost. In the time of a pandemic, when the workers are already suffering from the economic slowdown and the government is expected to support the low-income people with cash aid, the decision to shut down factories making thousands of workers unemployed is rather inhuman. Economists have instantly criticised the closure saying that the workers have been made to pay for the governance failure of the Bangladesh Jute Mill Corporation. Not only the workers will suffer, but an economy that is already unstable due to the COVID-19 situation will encourage other sectors to take similar measures to minimise loss and push more people into poverty. 

Economists have alleged that the government has kept the sector a loss-incurring one intentionally by not attending to the prevailing mismanagement and corruption. In reality, over the last decade, the government has allocated at least Tk 6,941 crore of public money for the jute corporation, but the sector continued to incur losses due to irregularities in jute purchase and lack of an organised marketing strategy to recover from losses. Time and again, workers have alleged that a section of BJMC officials, along with members of Collective Bargaining Agents, have been buying raw jute in late season when price is higher leading to a higher production cost. The problem and economic prospect of the sector is known to the government, yet it chose to de-prioritise this sector in accordance with World Bank’s development model that supported more privatisation and environmentally insensitive industrial projects. Bangladesh’s diplomatic relation with India has also made an impact on the jute industry as India has intermittently imposed anti-dumping duty on jute products. India was one of the largest export destinations for Bangladesh’s jute but after the imposition of the anti-dumping duty in 2017 shipments declined.

The state minister, justifying the decision to close down the state-owned jute mills by July 1, said that the workers would be paid all their dues through golden handshake programme and the laid-off workers would be given priority when the mills reopen under public-private partnership. Similar promises were made when Adamjee Jute Mill was closed, but the workers were not paid in a timely manner, nor the new factories opened under the proposed arrangement helped the industry to grow. The government must ensure that the promised financial benefits for workers are disbursed judiciously. More importantly, it must acknowledge the historic potential of the jute industry in our national economy and reconsider its policy for the sector with the sovereign interest of the state in mind.

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