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The last nail for Bangladesh's state jute industry

Frustration and fury grip workers after the surprising announcement to shut down all government-run jute mills

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The last nail for Bangladesh's state jute industry

Bangladeshi jute mill workers stage protests in Dhaka for unpaid wages and allowances in 2019. The government’s decision to shut down all state-owned jute mills will render about 25,000 workers jobless. (Photo: Stephan Uttom/UCA News)

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Mehedi Hasan has been passing sleepless nights over the past three days after news spread that he will soon become jobless.

Hasan, 38, is a worker in the mechanics department of state-run Eastern Jute Mills Ltd. in Khulna district that has about 900 permanent and 2,500 seasonal employees. The mill produces jute yarn, ropes, sacks and bags among other jute products.

“I couldn’t believe it when I first heard it from colleagues. This is an inhuman decision amounting to kicking the stomach of poor workers,” the Muslim father of two told UCA News.

Frustration and fury have gripped workers since Jute and Textiles Minister Golam Dastagir Gazi made a surprising announcement on June 29 about shutting down all 26 jute mills under the state-run Bangladesh Jute Mills Corporation (BJMC).

The move will lead to layoffs of about 25,000 permanent employees like Hasan for whom the mills have been the only source of livelihood for years. Most workers are from the Khulna industrial area that houses nine large jute mills.

The BJMC has been incurring heavy losses for years, prompting the government to take the decision, Gazi said, adding that 50 billion taka (US$592 million) will be allocated to pay wages and financial benefits of employees.

After shutting down, the mills will be modernized and reopened under public-private partnership (PPP) on a joint venture or lease system. After reopening, laid-off workers will get priority for employment, he said.

Hasan says the lives of workers like him will be turned upside down if the government goes ahead with the closure decision.

He joined the factory in 2005 as a temporary worker and was made a permanent staff member in 2011. His last monthly wage was 11,860 taka, which pays for the expenses of his seven-member family including three sons and elderly parents.

“My parents have high blood pressure and they need medicines worth 4,000 taka every month. I have three children too. I hoped that I could work here for another 20 years. Now, during a grave crisis like coronavirus pandemic, a brutal move is being forced upon us. I am extremely anxious about the future of myself and my family,” he said.

“We have nowhere to go to lodge complaints — we can only cry before Allah to ask why this disaster has come upon us.” 

Mozammel Haq Khan, 65, a former jute mill worker and trade unionist in Khulna district, claims the government’s decision to shut all state-owned jute mills makes scapegoats of innocent workers. (Photo: Uday Halder/UCA News)

Scapegoats

Trade unionist Mozammel Haq Khan alleged that workers have been made scapegoats for ineffective management, leadership and corruption by the BJMC.

Khan, 65, worked at Eastern Jute Mills from 1974 to 2014. He is a former secretary-general of Jute Mill Workers League in Khulna.

“The mills incurred losses due to a corrupt syndicate that looted public money year after year but didn’t modernize factories with new machines, train workers in better skills and didn’t purchase raw jute at low prices during the high season. This allowed hoarders to make big money for bribes. Now workers are being made scapegoats,” the Muslim father of two told UCA News.

He also alleged that the closure decision is an international conspiracy backed by the World Bank and Bangladeshi officials to weaken the state industry to prioritize private enterprises.

“In our estimate about 12 billion taka is needed to modernize and upgrade the jute mills, which is far less than the 50 billion taka being offered to workers. A group of ministers, most of them businessmen, have set their eyes on the huge properties of jute mills to earn dividends from collaboration with business groups,” Khan added.

The gradual decline of state jute mills is implementation of an anti-people scheme in place since 1990s, said Anu Muhammad, a professor of economics at Jahangirnagar University, near Dhaka.

“Bangladesh had more than 70 state jute mills after 1971 independence and in the past some 40 were closed down on the prescription of the World Bank and IMF. The biggest casualty was closure of Admajee Jute Mills in 2002 that rendered 20,000 workers jobless,” Muhammad told UCA News.

The human and economic costs of closure of 26 mills would be much higher as not only families of 25,000 workers will be affected but it will take a toll on two o three times the number of families of interlinked businesses, enterprises and markets as well as local farmers, he pointed out.

“In the past we have seen when mills closed the areas turned to lifeless, dead cities. This will happen once the decision comes into force,” he said.

Muhammad alleged that for years the BJMC has proved itself a corrupt and inefficient organization, but no official has been held accountable for misdeeds.

“If the authorities were enthusiastic, it could easily invest to revive it instead of shutting it down altogether. They have been sneaky to choose the time of Covid-19 when it is difficult to protest the decision,” he said.

Several top officials from the BJMC declined to comment on the issue when contacted. 

Alternatives ignored

Development experts also expressed dismay over a move that ignored feasible alternatives for revival.   

“The government should have prioritized natural fiber like jute that is environmentally friendly and causes no harm to soil, water and air, but instead mixes with soil as a natural composed fertilizer. Jute is a very good alternative to plastic and polythene pollution,” Benedict Alo D’Rozario, president of Caritas Asia, told UCA News.

D'Rozario, a former executive director of Caritas Bangladesh, noted that private jute mills and enterprises in Bangladesh including those run by Caritas have been making profits from local and international markets by selling innovative jute products.

CORR-The Jute Works, a trust of Caritas that has produced and sold jute products in local and international markets since 1973, has an average $2 million annual exports and aims to achieve $3 million in the next five years, its officials said.

The sorry state of BJMC mills is a result of “a serious lack of a coordinated and comprehensive approach” in upgrading the industry, D’Rozario said

“There were various studies, research and recommendations to improve the jute sector, but these were not implemented. Also, the Mandatory Jute Packaging Act (2010) for 18 food items, food grains as well as cement and fertilizer, was highly appreciated but was not implemented. It could widen the domestic jute market,” he noted.

He cited studies and recommendations made by the Center for Policy Dialogue, a leading Bangladeshi think tank, since 2009 that highlighted challenges and possibilities of the jute industry, only to be ignored.

India and Bangladesh account for some 90 percent of jute produced in the world, according to BJMC data. During its heyday in the 1960s to 1970s, jute and jute products fetched the highest annual foreign exchange, earning jute fame as “golden fiber.”

Despite a decline in demand from the late 1980s, the jute industry started regaining its glory in 2000 amid a rise in public consciousness about the environment and pollution.

Data from the Export Promotion Bureau shows Bangladeshi jute and jute products earn about $1 billion in annual exports and have potential to hit $3-5 billion.  

Despite the fact that Bangladeshi jute is the finest, state-run jute mills faltered for a lack of good leadership, management and renovation, while India continued to purchase raw jute from Bangladesh, produce jute products and sell on international markets, D’Rozario lamented.

“The existing infrastructure in the jute industry needs an overhaul — manpower needs to be trained, machines require upgrades and innovation. The process is called BMR — balancing, modernization and rehabilitation. This is vital to increase productivity, reduce production costs and to make it consumer-friendly and competitive” he added.

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