The New Nation - Internet Edition

RECENTLY, reports appeared in the press about the incumbent caretaker government drawing up afresh guidelines for privatisation. But this exercise ought not to be a long one considering that already too long a time has been spent on privatising the state-run enterprises (SOEs) with limited success. Therefore, the interim government may aim to actually carry out privatisation substantially during its tenure rather than drawing up only strategies to that end. There is real opportunity now to push through privatisation decisively by the neutral and caretaker government.

The burden of the losing SOEs can be well understood from a report in this paper some time ago that the total outstanding and classified loans of some 38 selected SOEs with the nationalised commercial banks (NCBs) and a special bank stood at Taka 192.62 billion until October 2006. Thus, this phenomenon is putting more and more strains on the government's limited resources to carry out its routine activities and draining resources into the SOEs. According to one credible estimate, a project the size of a Jamuna bridge could be built every two or three years with the total resources that are currently pumped into the chronically loss making SOEs.

Carrying out of privatisation will streamline the economy, add vitality to the financial sectors and create the conditions for greater availability of resources in the hands of the government for economy supportive activities. More important would be the environment of competition to be created by privatisation. In a privatised situation, the producers of goods or operators of services would be keen to ensure lower costs of production or operation respectively. Besides, they would be also in a keen contest to steal a march over each other by delivering relatively better quality goods and services to their consumers at lower prices. From such competition, consumers would likely gain in terms of quality and price.

Resistance to privatisation may come mainly from workers' unions and the employees. But they can be motivated with offers of attractive terminal benefits for workers and employees. The leaders of the major political parties should be also persuaded to initiate discussions at party levels. The people in general also should be educated more and more through publicity campaigns in the mass media about the positive sides of privatisation, such as the efficient running of the privatised units and hence their improved services delivery, reducing losses for the state, greater availability of public funds after faster privatisation of the losing SOEs for public investment in the social sectors. Ultimately, privatisation should proceed under a framework of national consensus between the government, the political parties, the unions and those to be affected so that the whole task can proceed smoothly in an uninterrupted manner.