FOUR state-run corporations having counted Tk 282.38 billion in losses in 28 years is a glaring example of inefficiency and mismanagement. The mismanagement in two corporations, the Bangladesh Jute Mills Corporation and the Bangladesh Sugar and Food Industries Corporation, resulted in the closure of 31 mills during the third tenure, 2019–2024, of the previous Awami League government, which was toppled in a mass uprising on August 5, 2024. Whilst 25 jute mills, running under the Jute Mills Corporation since 1972, were closed in July 2020, six sugar mills, running under the Sugar and Food Industries Corporation, were closed six months later in December that year. The Jute Mills Corporation has counted Tk 94.96 billion in losses in 28 years. It counted Tk 145.9 million in profit only once, in the 2011 financial year, whilst its highest loss for a single year reached Tk 7.74 billion in the 2020 financial year. The Sugar and Food Industries Corporation has counted profits twice in 28 years and its losses incurred over 26 years have reached Tk 96.58 billion. The Bangladesh Chemical Industries Corporation, which counted profits on eight occasions, has incurred Tk 81.62 billion in losses in 28 years and the Bangladesh Textile Mills Corporation has incurred losses of Tk 9.23 billion in 1997–2024 financial years.
Losses having resulted from inefficiency and mismanagement have forced successive governments to close down six other mills earlier. Dhaka Match Factory was closed in 2005. Adamjee Jute Mills, Khulna Newsprint Mills, North Bengal Paper Mills and the Chittagong Chemical Complex were closed in 2002. Chittagong Steel Mills was closed in 1999. All this took the number of total mills thus closed to 37. Economists blame the inefficient operation of the mills for the growing losses as the mills could contribute to industrialisation and count profits before and after Bangladesh’s independence. They observe that there is, and was, no system of reward and punishment in the management of mills and factories, which pushed the mills and factories to such a pass. The situation only worsened during the 15 years’ rule of the immediate past Awami League government as kleptocracy was at the heart of the management of the corporations. The white paper on the state of the Bangladesh economy that the interim government, installed on August 8, 2024, has carried out says that a lethal interplay of politics, business and governance caused a near-breakdown of the integrity of economic management, noting that public enterprises lack commercial incentives and accountability. Many believe, and rightly so, that state-run mills and factories are needed in national interests as any disruption in import caused by external factors could strain domestic demand beyond reparation, even at least for a short term.
In such a situation, whilst it is imperative for the government to improve efficiency and management of both the state-run corporations and the mills and factories that run under them, it is important for the government to find out the reasons that let the state-run industries down and fix them for their proper functioning.
