Lest we forget, the jute sector was the daily life blood of our financial state for several a long time and continues to be one particular of the mainstays of our rural financial state even currently. About fifteen million farmers are associated in increasing this money crop and several million more of our populace, potentially an equivalent quantity, are associated with its processing, transportation, conversion, etc. Be that as it may, the sector has gone off monitor owing to undue interference and discriminatory procedures produced by the coverage- makers from time to time and also for good reasons past the control of the industrial operators. In order to comprehend the present point out of affairs in the sector, one particular ought to appear into the track record of the jute sector and the gatherings that took position over the past several a long time.

Whilst this portion of the region was deemed to be a hinterland in the nineteen forties exactly where we developed only raw jute, all processing of the fibre was finished in the jute mills in present India.

The then Authorities of Pakistan realised that it would be far better to increase price to the fibre and export jute products to earn overseas trade for the country instead of exporting only the fibre. As these, the Authorities began to promote setting up of jute mills as far again as in 1951 in this portion of the region.

At a time when Pakistan was going via a period of immediate industrialisation, the Govt. of India made a decision to devalue her forex. The economists of that period realised that if Pakistani Rupee was also devalued at the exact rate as that of India, the immediate industrialisation system that the region was experiencing would be retarded.

Consequently, the Govt. came up, as early as in 1959, with a exclusive process of compensating the sector for overvaluation of Pakistani Rupee in the kind of reward vouchers, a scheme meticulously crafted exactly where the individuals compensated for the overvaluation of the forex and there was no stress on the countrywide exchequer.

By the conclude of 1960s and early seventies, about thirty million individuals ended up by now associated straight or indirectly in the sector. By 1972-73 the sector was by now producing about 4 hundred and fifty thousand metric tons of jute products earning approximately US$ 195 million.

In the calendar year 1971-seventy two, the Govt. of Bangladesh adopted a coverage of nationalisation and as these, less than a Presidential Order, nationalised all big industries including the feasible, vibrant and economically healthful jute sector without the need of using into thought, irrespective of whether the mills ended up owned by Bangladeshi nationals or or else.

Following a period of about I I years of operation less than the Bangladesh Jute Mills Corporation (BJMC), incurring substantial losses and crippling the sector, the Authorities of Bangladesh adopted a coverage of privatisation whereby tiny over one particular third of the reduction generating jute sector, which was originally owned predominantly by Bangladeshi nationals, ended up de-nationalised or privatised in the calendar year 1982-83.

Whilst carrying out so, sadly, the Authorities compelled the present homeowners to shoulder the total legal responsibility that they experienced produced all through the nationalised period. Let me reiterate that when the mills ended up nationalised in 1972 we experienced handed over a feasible, vibrant and a economic healthful jute sector to the Authorities. In spite of all troubles and against all odds, the initial homeowners came forward and took over the mills in the hope of reviving the sector.

In 1982-83 the sector developed about 5 hundred and forty thousand metric tons of Hessian, Sacking, CBC, Carpet and Yarn and acquired about US$ three hundred.00 million. Though the sector was divided among public sector and personal sector, the norms of credit rating to the sector ended up directed by Bangladesh Lender to the industrial banks and any other facilities that ended up provided to the sector ended up also provided in a good and equitable way, irrespective of irrespective of whether the mills ended up run in the public sector or the personal sector.

The price tag of the substantial debt stress that the personal sector jute sector experienced to shoulder resulted in continued losses for the sector. As a result a quantity of research ended up undertaken and eventually the Planet Lender came forward with a $250 million Jute Sector Adjustment Credit history (JSAC) to assistance the Jute Sector Reform Programme (JSRP) in 1992-93. The objective of the programme was to remodel the existing reduction generating jute sector into a feasible sector run predominantly in the personal sector. In order to achieve this intention the Planet Lender and the Authorities of Bangladesh made a decision to deal with one) potential rationalisation, ii) un-sustainability of earlier debts, iii) interim reduction finance and iv) privatisation.

Beneath the undertaking, the Govt. was obliged to:

I . Near nine Public sector mills
one. Downsize two huge Public sector mills
three. Produce off one particular third of all earlier bank loans as on June thirty, 1992.
4. Have in position an interim funding mechanism because the Govt. and the Planet Lender realised that the sector would carry on to incur specific sum of losses all through the forex of the undertaking.
five. Privatise eighteen Public sector mills

The Jute Sector Reform Programme of US$ 250 million was the single most significant Planet Lender-assisted undertaking in Bangladesh at that time. The Govt. of Bangladesh was capable to attract only the to start with tranche of US$ fifty million. The authorities was unable to attract the harmony US$ 200 million simply because it did not fulfil its obligations in the undertaking. Whilst the undertaking may have unsuccessful for several elements, we experience incredibly strongly about the unfair cure, we in the personal sector been given, from the Planet Lender Task in the kind of interim reduction funding. When the undertaking was becoming made, the Planet Lender economist knowledgeable us that there would be a predetermined reduction based mostly on the normal losses of the best 5 personal and best 5 public mills. He further more claimed that the public mills will get 100% of this predetermined reduction as interim reduction finance but the personal sector will get two third of this predetermined reduction because they are deemed to be more successful. The Planet Lender calculated this normal reduction determine to be 24% of income based mostly on the figures of 1991-92 without the need of using into thought depreciation, gratuity etc.

The personal sector complained to the Inspection Panel of the Planet Lender that they have been materially and adversely impacted by this undertaking and as these it needs to be looked into urgently. The Inspection Panel took up the make a difference significantly and visited the Planet Lender, the Authorities of Bangladesh, BJMC and Bangladesh Jute Mills Affiliation (BJMA) and verified that there ended up style flaws in the programme and the personal sector mills ended up materially and adversely impacted. As these, the Inspection Panel recommended the Planet Lender that the credit rating need to not be extended right up until and unless the undertaking is revisited and the flaws in the programme are taken out.

It appears to be stylish to go Planet Lender bashing for every thing that goes completely wrong in our region exactly where the Planet Lender is associated. It is potentially substantial time to consider a really hard appear at the JSRP and the part that our coverage makers took in coming up with a programme entire of flaws which eventually produced distortions in our raw jute current market, our labour current market, our economic current market as well as the worldwide jute products current market.

In 1997 an inter-ministerial committee was fashioned less than the Ministry of Jute to advise a ‘Revised Jute Sector Reform Programme’. Sad to say, the advice that was produced in 1997 only arrived at the Economic Relations Division (ERD) and the Planet Lender in the center of June 2006 after a period of about nine years. I urge on our individuals to check with who ended up the coverage makers who made a decision to sit on it for nine extensive years and for what purpose or for whose profit. We hope the Authorities and the Planet Lender would significantly revisit the undertaking, rectify the style flaws and produce a new undertaking in a good way. We experience, provided the appropriate assistance and creation of a degree actively playing area among public & personal sector, the sector can be revived to its entire potential.

Following the interim reduction funding period for the public sector i.e., BJMC, was over, they ended up out of the blue in tremendous liquidity crisis. Beneath the circumstances, the Govt. experienced arranged for BJMC to get loans amounting to more than Tk twenty five billion (two,500 crores) less than distinctive heads, in addition to any subsidy that was furnished for export of jute products, to maintain them afloat. When the Govt. is aware of that these loans are never ever going to be repaid, for all sensible needs these are grants. Because of these “loans”, the BJMC is resulting in distortions in the raw jute current market, the economic current market, the labour current market, as well as the worldwide jute products current market.

We would like to see that each individual single jute mill in the region, irrespective of possession, need to be in operation. Nevertheless, we do not consider that the public sector mills can carry on to function without the need of huge quantities of cash becoming produced available to the BJMC straight by the Authorities calendar year after calendar year. We as a result, experience that the Govt. need to deal with the complications of regular jute sector and consider the pursuing steps as the way forward to revive the sector.

The way forward:

The Authorities of Bangladesh owes the personal sector jute mills an sum of Tk. 531.9 million (fifty three.19 crores) less than the heads of JSRP/JSAC and subsidy against the export of jute yam. The Authorities of Bangladesh need to promptly release these cash to the personal sector jute mills which they owe against specific MOF circulars.

Subsidy against export of jute products are nonetheless to be compensated to the personal sector jute sector for portion of FY 2005-2006, the entire of FY 2006-2007 and the present FY 2007-2008. The Authorities need to promptly release these cash to empower the personal sector jute sector to perform adequately. Henceforth, the Authorities of Bangladesh need to ensure that export subsidy is credited to the accounts of the exporting mills instantly with the presentation of the Proceeds Realisation Certificates.

The Authorities of Bangladesh need to urge the Planet Lender to urgently revisit the JSRP, take out the flaws and produce a new programme in a good way and develop a degree actively playing area among the public and the personal sector jute sector.

Increase export subsidy from seven.five% to fifteen% for Hessian, Sacking, CBC and Yarn and 20% for diversified or price-additional jute goods as for every advice of the Advisory Committee of the Ministry of Textiles & Jute.
Let responsibility free and VAT free import of spare parts of jute mill equipment by the jute mills.

The Govt. need to promptly make it required to pack food stuff grains, sugar, fertiliser, and cement in jute luggage.
This will not only develop a supportive and guarded internal current market for natural environment helpful and normal jute luggage which are 100% indigenous goods of Bangladesh, utilizing hundreds of thousands of individuals, but also conserve the country hundreds of thousands of bucks utilised in importing polypropylene compounds to manufacture p.p. luggage.

The Govt. need to also think about complete privatisation, public-personal partnership and leasing of the public sector mills to carry on production in the public mills in a sustainable way.

Thanks to the strength crisis prevailing in the region a quantity of jute mills have installed fuel-powered turbines.
The price tag at which the mills have to fork out for the fuel that they consume is substantially increased than the price tag for fuel compensated for by the Power Development Board (PDB).

We urge on the Govt. to lessen the price tag of fuel for captive energy era to the exact degree as compensated for by the PDB. We also urge on the Govt. to make fuel available to the jute mills which are not connected as nonetheless but are eager to set up captive fuel-powered turbines.

The above is a brief or a track record of the regular jute sector in Bangladesh alongside with ‘the way forward’. It was not intention of this author to paint a sorry photograph.

Points are only becoming furnished here for a dispassionate thought of the condition dealing with the sector. The complete amount of Hessian, Sacking and CBC developed in 1972-1973 was tiny over 450,000 M.Tons which grew to about 563,000 M.Tons in 1982-83. Thanks to shear neglect and an uneven actively playing area produced by the Govt. and the Planet Lender undertaking (JSRP), the production of regular jute goods, specifically, Hessian, Sacking and CBC dwindled to about 242,000 M.Tons in the calendar year 2005-06.

Nevertheless, there is a brighter side of the sector, which is only spinning jute yarns.

This sub-sector of the jute sector, luckily, does not have any public sector involvement or debt overhang or any artificial distortions and as these has emerged to be a promising operation.

The production of jute yarns in the jute spinning sector has amplified from about 27,000 M.Tons in 1982-83 to about three hundred,000 M.Tons in 2005-2006.

Bangladesh has a populace of about one particular hundred and forty million individuals out of which about thirty million individuals are straight or indirectly associated with the jute sector.

The greatest problem for Bangladesh currently is not only to maintain the degree of work that we have created so far but also to develop work for the hundreds of thousands who are joining the labour current market day to day. It is, as a result, very important that we deal with the complications of the jute sector in a good way and develop a degree actively playing area in a supportive natural environment.