The New Nation - Internet Edition

Md Lutfur Rahman

This article is being written in such a time when the Jute industries and the Jute sector, once which was the biggest sector, is thought as a very sick sector as made somehow in the country. As a whole we may say regretfully that this is due to manmade local and international politics and policy, absence of proper guidance, financial assistance and the policy from the government to root out the corruption from the jute industries. All these important points have come out from the seminars and round-table conferences held on jute in different times in the country, but government did not care and dear the measures and steps requested in time by the experts, industrialists, businessmen and leaders of the mass people. As a result, we see the current abnormal situation prevailing in the sector once which was the golden and vital economic sector for the country. Still, the earning of foreign currency of this sector though decreased is 100% value added.

At the current situation, the government has formed a high powered "Task Force" for the development and re-formation of the Jute Sector which is a very positive step and good news for the sector, though no remarkable action is taken so far. But we are not sure if it will be like all committees in past, or just an eye-wash. Let us see the rolls to be played by the task force policy making. We the people of Bangladesh still believe that the roll of jute and jute products in the world is endless and the jute sector may regain its good mane once it is patronised by the government like the neighbouring countries. Fast of all, all the corrupted officers and employees of the past and current time must be punished for the sake of glorious future of the Jute Sector. It is regretting that the Combined Force I Task Force still did not put any step in BJMC though they have, in the meantime, finished successful operations in TITAS, PDB, WASA, DCC, CPA and some other organisation.

As an exporter of jute products, the main objective in my article is to bring forward an issue of sub-sector of Jute and this is called the "Jute Diversified Products" like Jute Tape in roll, Jute Nursery pot/bag, Jute Triangle/Square Nursery Sheet, Jute Shopping & promotional bags etc. (there are many more diversified items of jute), other than traditional Hessian and sacking items of jute. Time passes and technology develops. There is an organisation - 'Jute Diversified Promotion Centre' formed by the Government in March 2002 and working under Ministry of Textile and Jute. Meantime, they have developed a good number of technology. projects and jute diversified products which are mainly technology based and in most cases needs fund financing. But diversified products like Jute Tape in roll, Jute Nursery pot/ bag, Jute Triangle/Square Nursery Sheet, Jute Shopping & promotional bags of different types are mainly home or cottage industry and self-finance capital based.

As an exporter I know that, the diversified and non-traditional hand made Jute products like Jute Tape in roll, Jute Nursery pot, Jute Triangle/Square Nursery Sheet, Jute Shopping & promotional bags etc are being exported by some of exporters for the last 8/10 years and earning valuable foreign currency which is 100% value added. Mention-worthy that, these items are made of Jute Hessian and CBC procured from BJMC and private jute mills by Mfrs & exporters by payment in cash.

Our export volume for these items are inadequate in terms of international demand volume. Currently, Bangladesh has a very small share in the int'l market, say about 50 x 40ft TEUS per year, whereas the demand is about 1.000 TEUS per year worth more than 15 million US Dollars. But, we are unable to compete in the international market, because of our incompetent price for these items as mentioned above.

It may be mentioned here that, we the Mfrs and exporters buy Jute Cloth & CBC from BJMC and private jute mills in local currency in cash which includes 7.5% as export incentive (suppose to be received by the mills after export if not sold locally) plus VAT. We then prepare the Jute diversified products in homes and cottages manually in step by step by cutting, sewing and packing in carton and effect shipment directly against EXP Form duly issued and signed by us as an exporter. But we are not patronised by way of export incentive and/or any rebate for VAT from the government against the export, though these items meet the category of "Jute Products". Hence, the price costing for jute diversified and non-traditional items produce's and exporter's are high than our competitors in the other countries. As a result, we are loosing a good volume of orders for these diversified and non-traditional items from the buyers in abroad. In this case, the jute mills except a very few producing the traditional items only (Hessian, Sacking and CBC) are allowed for 7.5% export incentive. Even after receiving the incentive benefit from government, what is the result we observe in BJMC and private jute mills?

It may be add here that, most of the jute mills in Bangladesh are the manufacturers of traditional items (like Hessian, Sacking & CBC) and have no set up, nor can prepare Jute Tape in roll, Jute Nursery pots/Bags/sheets, Shopping and promotional bags etc of some different type, because of nature of process and manpower involved in it is not yet developed with them and so, the export of these items as well the export incentive is not a headache for the traditional jute mills. So, why should not the exporters of these items get 7.5% incentive back to them that they paid/pay in local currency as incentive to BJMC and private jute mills when the exporters buy the jute cloth ?

Currently, our competitors/exporters in India, Vietnam and China are patronised & subsidised well by their government. to boost up export of these items irrespective of mills/factories for all diversified jute items exported.

Hence, they may meet the products more competitive in the int'l market than us. A remarkable point here to mention that the above mentioned countries import raw jute from Bangladesh to meet the internal requirements of jute products and export surplus items including variety of jute goods in competition with us.

We have seen in our country that most of the large scale and heavy industries in government and public sector like Paper-pulp Industries. Ship - Dock yards, Machine Tools Factory, Sericulture Board and some more are closed; some like BJMC, BTMC, BISIC, BIMAN etc are shrink and some like PDB, BPC, BCIC, WASA, Health etc are very week due to reasons best known to the people of the country.

As a result, the country's GDP and economical growth is not up to the expected label towards a under developed country. It is also seen for the last several years that, Bangladesh is a very import based than export showing a trade deficit even with neighbouring Nepal and Bhutan, while a very alarming gap with India. Of course, it should be come down and this may be only by way of increasing export than import.

Out of the above sectors, Jute is only one using 100% local raw jute and materials and earns foreign currency of 100% value added by export. About four billion people are involved in this sector directly or indirectly. Hence, this sector should not be neglected further, rather to do the needful right now. At the same time, government may turn to a new look at the "Jute Diversified Products" sector which may be one of the turning point of country's economic activities by way of export of the products made in homes and cottages as 'Small and Medium Scale Enterprises' in Bangladesh.

To grow up and develop the said sector. government should patronise and subsidize the exporters by way of min 20% cash incentive for export of the said items under easy terms and policy applicable. Banks in Bangladesh should also come forward for small scale financing to SME. Meantime, SME as a whole have been proved as good clients of banks and other financing companies than large scale industries in the country.

As per current circular of Bangladesh Bank, it is seen that the conditions as fixed in the circular are the hard barriers for cash incentives favouring the exporters for export of the items, except jute mills only under the category "Jute products", but no other manufacturers and exporters are eligible and thus, maximum genuine exporters of the items are deprived of the due export incentive.

It should be kept in mind that the concern items are mostly exported against the payment terms - by T/T in advance and firm CAD contract mainly for a hazel free transaction for a small lot/amount as preferred by the foreign buyers/importers now-a-days. Hence, export made against UC only, other than T/T payment in advance and firm CAD Contract, may not be only the criteria for export incentive as indicated in the current circular of Bangladesh Bank. It is needless to say that the export-shipment proceeds realisation procedures and documentations are same for all export payment terms like LC, T/T in advance and firm CAD contract.

We, the manufacturers and exporter of Jute Diversified and non-traditional items think it seriously that proceeds realised duly from the foreign bank after export against T/T payment in advance and firm CAD Contract also should be considered as logical for the due export incentive to legal exporters who issue, sign and seal the EXP Form as an exporter of the items. It may be mentioned here that an exporter is licensed as an exporter of Jute Goods from the Ministry of Jute, but Bangladesh Bank as well concern Ministry does not allow the export incentive to them as exporter. It is very contradictory and regretting too.

We may also emphasis here that, once the export incentive is allowed to the exporters who issue sign & seal in the EXP Form as an exporter of Jute Nursery pots/ Bags/ Sheets, Jute Tape in roll, Jute Shopping bags etc irrespective of jute mills, it will gain a new momentum to make the export volume as 20 - 25 times higher than the current export of the products from Bangladesh. At the same time, Jute Diversified products Sector will be enlarged creating more employment opportunities through out the country.

At last, we may strongly propose and request the concern government authorities to took into the issue and allow due cash incentive also for export of the items made against T/T payment in advance and firm CAD contract for the greater interest of the exporters as well the country.