The government will no more privatise state owned enterprises (SoE), as successful bidders have not been using the divested SoEs for purposes they had promised, said Industries Minister Dilip Barua yesterday.
Barua also suggested bringing down interest rates to single digits, as according to him, high interest rates are a major obstacle to the country’s industrialisation.
He announced that the government has no plan to allow more Export Processing Zones (EPZs) in the near future, rather it is interested in setting up Special Economic Zones (SEZs).
Barua said the government will also review whether some closed SoEs could be reopened for generating employment.
It will not allow SoE buyers to use divested land for real estate purposes, as many of them have been doing, violating privatisation policies, the minister added.
“We have no plan to privatise any more state owned enterprises for the time being,” Barua said while seeking opinions from entrepreneurs, government high-ups, industrialists, chamber leaders, and other stakeholders concerned at a consultation meeting for formulation of the industrial policy 2009.
Seventy six SoEs have been privatised so far since 1994, and most of the divested entities are being used for purposes other than the promised ones said officials of the Privatisation Commission (PC).
According to the privatisation policy, buyers of divested SoEs must commit to continue the operations of the enterprises and rejuvenate them, but in most cases they actually change the nature of the divested SoEs and start completely different businesses on purchased properties including lands.
At the meeting held in Sonargaon Hotel of the capital, Barua said the new industrial policy 2009 will be prepared on the basis of the industrial policy for 1996-2000.
Chairman of the Parliamentary Standing Committee on Industries Ministry Tofail Ahmed attended the meeting as chief guest.
Barua said the government will identify some sectors on priority basis to provide bank loans. “Interest rates of those loans will be at single digits.”
In the proposed policy the minister identified agro-based and agro-product processing industries, ship building, renewable energy, tourism, basic chemicals, dyeing, chemical products, computer software and ICT products, and highly value adding readymade garment (RMG) industry as thrust sectors.
The other industries identified as thrust sectors are active pharmaceutical ingredients, herbal medicine, polymer, plastic, jute, leather, hospitals and clinics, light engineering, cosmetics and toiletries, furniture, diamond cutting and polishing, and handicraft.
The proposed new industrial policy also identified 17 sectors as controlled industries, and four as preserved.
The preserved industrial sectors are arms and other military equipment, atomic power, security printing, and technology adoption for forests and protected forestlands.
Barua announced that the government will also formulate a policy for making sick industries profitable, but noted that ‘the government will not allow anyone to do business in the name of sick industries’.
“We may make it mandatory to buy local products for government procurement, for the betterment of local industries,” he added.
Tofail Ahmed emphasised on establishing more backward linkage industries for sustainable industrialisation and for employment generation.
He suggested fixing industry friendly duties on imports, and incorporating the opinions of many more stakeholders in formulating the final industrial policy.
He also urged the government to impose protectionist measures to save local industries. “Many developed countries in the world are practicing protectionism to save their products, and we also have to do so to save ours,” he said.
He also requested the government to formulate an industrial policy that will increasingly attract foreign investment.
Economists and chamber leaders in their instant reactions urged the government to be more cautious in selecting bidders for divestible SoEs, so that public entities are not misused.
Dr MK Mujeri, director general of Bangladesh Institute of Development Studies (BIDS), said the government should be more cautious in selecting bidders for divestible SoEs.
“If the government could run the industries efficiently, we would be able to generate more employment. We should select good entrepreneurs for selling the SoEs,” Mujeri said.
Syed Nasim Manzur, managing director of Apex-Adelchi Footwear Limited, urged the government to modernise the processes of privatisation.
The authorities sell the SoEs to highest bidders, but the government does not notice whether the buyers have the ability or the mentality to continue and rejuvenate the operations of the divested public entities, Manzur, who is also a vice-president of the Metropolitan Chamber of Commerce and Industries (MCCI), said.
“The criteria for selecting the bidders should be modernised,” he said.
Source: The Daily Star, 26 April 2009