Bangladesh plans to set up an independent commission to identify problems in the country's ailing jute sector and suggest ways to restore its fortunes, a senior government official said on Sunday. Jute, known as a "golden fibre", derived from reed-like plants and used to make rope and sacking, was once Bangladesh's main export, bringing in more than $700 million a year.
Now earnings from jute are no more than $250 million and the authorities recently decided to shut four jute mills because of mounting losses, at the cost of thousands of jobs.
"We want jute to survive as a healthy business entity. So it has become very necessary to get the independent view on the ailing sector," said Geeteara Safiya Chowdhury.
She is an adviser to the army-backed interim government for the jute, textile and other industries.
"The commission would involve people with real expertise in the production and business of jute, not just some government people with minimal or no knowledge about this sector," the adviser told Reuters in an interview.
Jute has lost out to cheaper, more durable, synthetic materials over the past two decades. But awareness about the environment has put the focus back on jute, officials said.
However, previous governments were unable to diversify the use of jute and farmers were not keen to return to its cultivation because of low prices and high production costs.
Geeteara is hoping for a turnaround in three years, but does not have a detailed plan yet. Clothing is Bangladesh's biggest export earner today, bringing in more than $8 billion a year. Jute has fallen to fourth place, after leather and frozen fish.
Last week's decision to shut down four jute mills in the public sector would make 6,000 workers redundant. Some 8,000 more would be retrenched from 18 other state-run mills by the end of 2007, officials said. However, the government will also inject fresh funds into the sector.
"We have the raw materials and also access to the market. Still our jute sector is making a loss for many years. We tried to find out the reasons and have taken the measures," said Geeteara.
"Most of our mills are overstaffed. There were politicisation, carelessness and nepotism in recruiting the people," she said. "The overstaffed mills are unable to pay their employees. So we have no other choice but to reduce the manpower drastically."
The adviser said the axed mill workers would be compensated. The government would mobilise 1.38 billion taka ($20 million) to compensate the workers.
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