Will Bangladesh ever recapture its golden fibre?

In student life, a common phenomenon is fostered by students- cram and write down the essay on jute- the golden fibre which had strengthened and reinforced economic empowerment of the people of Bangladesh. UNO declared the 2009- as the year of natural fibre, Debates and confrontation between LDCs and Developed countries for global warming and climate change regarding the conference on Copenhagen and conversation in the media and government policy and last not but the least, a mammoth production of jute, have been revising the issue of jute and it's allied contexts since last year.
Kamran T. Rahman ex-chairman of Bangladesh Jute Mills Association described the situation as such: "After partition, the government of Pakistan realized that it would be better to add value to the fibre and export jute goods to earn foreign exchange instead of exporting only the fibre. As such, the government began to promote setting up of jute mills in this part of the country as far back as 1951." Jute manufacturing sector is a long-established manufacturing sector of Bangladesh, which materialised in former East Pakistan in the early 1950s. Major share of the manufacturing sector in national income and generating employment was reported by this sector during the1960s and 1970s. During the1960s exports of jute and jute goods were the two most important sources of foreign exchange of Pakistan.
After independence of Bangladesh in 1971, the government pursued a programme of nationalisation of large manufacturing enterprises. As part of this program it took over all the abandoned jute mills and nationalised those owned by Bangladeshi citizens. The operations of these nationalised mills were put under the Bangladesh Jute Mills Corporation (BJMC). In the early 1980s, some rethinking led to a partial reversal of this policy and over 50 percent of the mills (35 out of 66) under BJMC were privatised. Notwithstanding this change, market forces were still not allowed to guide the operation of the mills and both public and private sector mills remained mired in large financial losses.
During 1990s the govt. focused again on the jute sector's problems through a reconstructing programme in order to create a commercially workable jute industry. In this period, following the suggestions of the World Bank, the government was on track to denationalize a number of public sector jute mills. Supported by the World Bank's jute sector adjustment credit (JSAC), the government put this sector into restructuring programme in 1993 to nationalise the cost structure in the jute industry and to introduce mechanism through which financial discipline and accountability could be established. The jute sector reform programme of $ 250 million was the single largest World Bank assisted projected in Bangladesh at that time.
In this context, Kamran T Rahman commented in his article: "When the credit agreement was finally signed in Washington we were astonished to find that the private sector would get two-thirds of this predetermined amount but the public sector would get 100% of their book losses. As a result, the private sector mills received 16% of their sales value as interim loss finance and the public sector mills got a minimum of 31% and up to a maximum of 67%. Consequently, a very uneven playing field was created in the jute sector through this World Bank assisted project." Jute sector reforms got a catastrophic event with the closure of Adamjee jute mills of Bangladesh in 2002. Researcher and columnist A.M.M Shahabuddin, regarded this event as "an indecent burial." Consequently, smuggling raw jute to India increased and the circumstance went downhill while Bangladesh produced just one lack tons of Jute per year, while India was producing annually over two million metric tons of raw jute .
Najmul Huq, Chairman of Bangladesh Jute Mills Association (BJMA) pointed out five major drawbacks of Jute sector: Unavailability of varieties of jute seed, absenteeism of mechanization, inconsistent policy on private sector, inadequate R & D facilities at both public and private levels, continued financial crisis in the public sector jute mills and lack of coordination between public and private sector. Sheikh Farook Hossain, President of Bangladesh Jute Association (BJA) comments "climate change is responsible for degrading of jute cultivation even as rivers are dying along with golden colour of fibre fading."
According to a report of Bangladesh Jute Spinners Association, about 40 to 42 lakh bales of jute are required yearly for manufacturing of jute products in 178 mills running presently. On the other hand, 18 to 20 lakh bales of raw jute are exported. So, Bangladesh requires 60 to 65 lakh bales of raw jute every year, whereas it is producing only 45 lakh bales. Standard qualities of jute are purchased 2000 to 2100 taka per mound, nevertheless farmer do not get benefits since they have already sold their crops. In this situation, some disloyal businessmen are stocking jute through syndication for getting better profit. Consequently, market price of raw jute becomes volatile every year.
The government imposed a ban of export of raw jute mainly to ensure adequate availability for the local jute mills, which were facing trouble in procuring the raw material because of price hike in the domestic market. Sheikh Farook Hossain is anxious about this decision. Farook considered it as a blunder for this sector. He further informed that, India, Pakistan, China are the largest buyers of local raw jute while Britain, Spain, Ivory Coast, Germany and Brazil also import jute from Bangladesh.
The United Nations (UN) declared 2009 as the 'Year of Natural Fibre' in order to popularise the use of natural fibres in manufacturing goods and consumers of developed countries are interested in buying more environment-friendly products. From this perspective, jute is considered as a demandable item because of its biodegradability and environment-friendly nature. In the case of Bangladesh, there is an ample scope for the development of use of jute and jute goods at the domestic level. Exporters of jute products envision that Australia and New Zealand are the prospective destinations for their products, especially jute shopping bags, as eco-concerns drive demand for biodegradable goods in the global market. This created a big opening for higher volume of exports this year, while some European countries were to impose ban on the use of polythene bags in 2010. Australia has already announced its plan to lock up plastic bags and few other countries have already imposed the ban. According to a report in the Financial Express, the global context has prepared a multi-billion dollar global shopping bag market, which has opened up a big opportunity for the export of the country's golden fibre. The country earned $156 million during July-November period of the current fiscal from jute goods export. Bangladeshi traders export about 1.2 million shopping bags annually on an average to different countries, including Germany, the Netherlands, Sweden, UK, USA, Canada, Japan, Switzerland, South Korea, and France.
Sheikh Farook Hossain further informed that, total 63 mills running under Bangladesh Jute Spinners Association (BJSA), 95 mills under Bangladesh Jute Mills Association (BJMA) and 17 partly as well as 22 mills fully running under Bangladesh Jute Mills Corporation (BJMC). He further adjoins Bangladesh Jute Association (BJA) exports 20-25 lakh bales of jute in Turkey, India, Brazil, Belgium, Germany and other foreign countries. Bangladesh Jute Association sources said the country exports raw jute to 25 countries of which major portion goes to China, Pakistan, Thailand, Italy, Germany and Vietnam. But 88% of the total export goes to China, Pakistan and India. Nazmul Huq pronounced on BJMA's jute production of 2009 was 1 lakh 20 thousand tons, and it is expected this would increase to 1.5 lakh tons in 2010.
Bangladesh and India have started a long-term project for researching and developing jute-based geotextiles, which will potentially prevent soil erosion and help the roads to last for a longer time. Geotextiles are permeable fabrics which, when used in association with the soil, have the ability to separate, filter, reinforce, protect or drain.
Northern districts of Bangladesh stimulate the manufacture of jute made goods, in these contexts small and medium entrepreneurs are playing dominating roles. Bogra is the centre of this reviving process, a total of 9 mills are running now. Some industrialists are moving toward development and investing abundantly for protecting this golden fibre. Najmul Huq assumes that if the government reviews jute policy and puts a reformative scheme into practice, this industry would have created employment opportunities and strengthened rural development of monga-affected communities.
There are already encouraging signs approaching from the present government since the parliamentary standing committee on jute and textile has asked the concerned authorities on allocation for purchasing jute, resuming operations of the second unit of Adamjee Jute Mills and urging resumption of operation of Kawmi Jute Mills in Sirajganj and Daulatpur Jute Mills in Khulna. "Rural development and economic empowerment have been significantly opted by jute production since 3 crore people are directly or indirectly involved including in cultivation, manufacturing, marketing, selling, trading, and what not. Additionally, about 3 lakh labourers are working in this sector," said Sheikh Farook Hossain.
Khondaker Golam Moazzem, Md Tariqur Rahman and Abdus Sobhan of the Centre for Policy Dialogue (CPD) recommend reconstruction of BJMC, review of jute policy with an effective and realistic plan of action for short, medium and long term outlook. With minimum repair costs for maintenance of the unused machines, new mills could be setup. Researcher A K M Rezaur Rahman believes jute deserves international support and cooperation as a natural corollary to the United Nations Sustainable Development Programme and Millennium Development Goals for socioeconomic development, protection of environment and reduction of poverty. He recommends the following:
o Member countries of the UN system should be encouraged to adopt appropriate policies for use of jute products instead of synthetic substitutes in packaging cereal commodities in particular
o Super markets and shopping outlets worldwide should be encouraged to use jute shopping bags instead of polythene/polypropylene shopping bags
o Geo-jute and jute geo-textiles should be used instead of synthetic alternatives in construction of roads and pavements, soil saving and erosion control activities.
o Entrepreneurs may be encouraged for using jute as basic raw material for pulp and paper manufacturing industries
o Finally and importantly, there should be coordination and understanding among the stakeholders of the various natural fibres with regard to their better utilisation.

Sources:
* Golden past, golden future Kamran T. Rahman, Forum, Volume 2 Issue 9 | October 2007.
* Policy & Prospect of Jute & Allied Fibers with Special Reference to Bangladesh by Dr. Mohammad Mahbubur Rahman Secretary Ministry of Textiles & Jute Govt. of the People's Republic of Bangladesh.
* New report of prothom alo in 06.10.2010.
* Jute Manufacturing Sector of Bangladesh Challenges, Opportunities and Policy Options
* Paper 78 by Khondaker Golam Moazzem Md. Tariqur Rahman and Abdus Sobhan Published by Centre for Policy Dialogue (CPD).
* Markets opening up for jute shopping bags worldwide a news report of the financial express in VOL 1818 NO 332 REGD NO DA 1589 | Dhaka, Thursday January 14 2010.
* A K M Rezaur Rahman, former International Jute Organization, Bangladesh. Paper on South Asian Jute.
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Sun Aug 01 2010 22:04:50 GMT+0600 (Central Asia Standard Time)Fri Feb 12 2010 11:39:19 GMT+0700 (SE Asia Standard Time