A firm commitment from the government is required Empowering the PB to make decisions, ensuring legal cover by enforcing the privatization jaw. The greater emphasis in most developing countries on market-oriented industrial growth and on a greater role for the private sector in industry has been a key factor in determining the extent and nature of privatization in various developing countries.
Statement of the Problem
On the other hand, the price of privatized services was raised significantly in most cases. In Argentina, for example, after the privatization of the national telecommunications companies, the price of basic services was increased by 500 percent.
Profitability of the Private Enter pr-ises Compared with SOEs
This subsidy money comes from people's pockets in the form of taxes. With this money, the government can implement various development programs, including the construction of new hospitals, educational institutions, roads and bridges.
The Bangladesh Context
The second phase of privatization (or denationalization) took place in the first half of the 1980s and mostly covered jute and textile mills originally owned by Bangladeshi nationals before independence. The government of the People's Republic of Bangladesh must carry out privatization in the context of its broader goals of economic development and poverty reduction.
Rationale of the Study
The outcome of the proposed research can be successfully used as training materials in these courses. It is expected that the strengths and pitfalls of the privatization process will be revealed, which could benefit privatization.
Objectives of the Study
It has been accepted in the world economy that privatization will be the main stream of development in the next century 21. To measure the progress of privatization efforts and to identify the main issues of privatization in Bangladesh.
Scope of the Study
To identify the special features of policy planning, design and implementation systems of privatization programs by PB. iii).
CHAPTER-II
Nature of Research
Techniques of Data Collection
Data Collectors and Data Collection Period
Data Processing and Analysis
Report Plan
CHAPTER-III
Privatization
How to Approach Privatization: Ten Propositions and Caveats"
This issue should be approached from the point of view of privatizing an economy, not simply by sacking inefficient and cash-strapped state-owned enterprises. Privatization should be undertaken to develop sustainable enterprises and a more vibrant economy, not simply to reduce the losses of state-owned enterprises (SOEs) or to reduce government deficits. The approach to privatization should be pragmatic and not ideological, with the emphasis on "what will work in this society, in this bureaucracy, in this situation".
Types of Privatization'?
Partial divestiture: Partial divestiture can involve sale of a particular unit of a particular SOE, but is usually concerned with sale of a'-percentage of the SO Es shares
Privatization is a means, not an end; and it is not a panacea to solve all the ills of a sick economy. Privatization is fraught with political, social and economic problems and risks: its pole listing is characterized by nagging uncertainties and few short-term victories; it's a sloppy business. However, liquidation has the one saving grace of ending ongoing losses while putting some cash in the coffers.
State Owned (SO)/ Public Enterprises
Liquidation or Closure: Liquidation is a difficult decision for the government as it involves an admission of failure. Marginalization: This is sometimes called "silent liquidation." It involves freezing or gradually reducing the budget or operations of a state-owned company while a replacement is slowly created in the private sector. There are four basic elements in this dimension: (I) state public ownership, (ii) state public purpose, (iii) state public control and (iv) public responsibility.
Types of State Owned (SO)/ Public Enterprise
These corporations are separate legal entities, have an authorized capital and are authorized to define their own rules and regulations and prepare their own budgets with the approval of the government. They have their own Board of Directors, which may consist of members of government-appointed ministries and corporations, as well as private shareholders. The employees of the companies are not government employees and their budget is even less supervised and controlled by the government.
CHAPTER-IV
Institutional Framework
Special Features of Policy Planning, Design and 'Implementation Systems of Privatization Programmes by Privatization Board (PB)
One or both of the following methods will be used for privatization of SO Es. a) Sale by international tender: local and foreign private buyers may participate in all such tenders. Association of workers, employees and officers of the tendered enterprise can also present a bid for the purchase of the enterprise.
Preparation of SOEs for Privatization
Guidelines for Valuation
When estimating current construction costs, the rate chart of the Ministry of Housing and other construction departments and the estimates published by the Bureau of Statistics will be taken into account.
Tender Procedures for Sale
Short-term liabilities such as employees' and workers' claims and income taxes, etc., accrued before the transfer of the enterprise will be taken over by the Government. In addition to the above, the buyer will also provide an irrevocable personal bank guarantee without recourse for the above quasi-equity loans and obligations or will hold the share certificates of all shares purchased by him, under the custody of the Government. The government will not accept any liability of the company. j) During the implementation of the privatization policy, an effort will be made to make the ownership of industrial enterprises as broad as possible.
The Procedure for Analysing the Tenders
In both cases mentioned under (c) and (d) above, the buyer will have to provide an irrevocable bank guarantee without recourse if payment is not made in cash. The company whose shares are offered for sale will do so. repay all quasi-quity loans from the government and dues from the corporations within a period of 10 years in six monthly installments at an ordinary interest of 10% per annum and furnish an irrevocable bank guarantee without recourse from a scheduled bank. In this case, the acceptability of the highest bid can be considered even if the amount quoted, together with the long-term obligation accepted by the bidder, is lower than the value of the fixed assets.
Financial Arrangement
Payment Procedure
Whether the sale of government shares of various companies through the stock exchange will be correct can be decided after consultation with the Security and Exchange Commission. If the discussion shows that selling the shares via the Stock Exchange can yield a satisfactory price, the shares may only be sold there under those circumstances.
CHAPTER-V
FINDING OF THE STUDY Progress of Implementation of Privatisation Programmes
Privatization Scenario in Bangladesh
The above table-I shows that 490 industries were sold to private entrepreneur, 3 of these 490 were sold by BP (After March 1993) and another 487 were privatized during the period 1976-93, by the Ministry of Industries and ICOP. The current picture of privatization in the period 1976-93 is that the Ministry of Industries and ICOP sold 503 industries and 1 from Bangladesh Shilpa Rin Sangstha against their outstanding loans. It is worth mentioning the fact that after the creation of the Privatization Board, only 17 (seventeen) SOEs were handed over to the private sector. Of the ~OE, 12 were submitted during the period 1993-96 and another 5 were submitted during the period. 1996-98.
Government's Present Plan on Privatization Activities
From this finding, it is evident that BP was able to privatize less than 3 enterprises per year during the period from March 1993 to May 1999 (Appendix-D). During the month of May 1997, the Privatization Board had issued LOI (letter indent) for 9 (nine) SOEs to be handed over to buyers after final approval by the higher authority (Annexure-F). Due to the protracted and complicated delivery process, some privatized units already sold to private enterprises have not been delivered even after 5 years from the acceptance of the offer and the advance payment made by the party.
Industrial Policy for Private Sector Development
Case Study
Case Study-I
Sylhet Textile Mills, Sylhet Introduction
Assets of the Mill
Statement of Last 10 Years Profit and Loss
Now it is declared closed but still 117 staff and officers are getting their salaries and 504 workers are getting their wages without doing any work. The market price was always lower than the cost of production and there was restriction in marketing. Lack of essential machine parts in the local market, which occasionally hampered production.
Review of the Causes of Sickness
It's an obvious question that applies not only to this company, but to all public companies. Lack of current capital or insufficient current capital to purchase enough cotton as input from the factory. We can hardly name an example of necessary and immediate action against these types of irregularities in the public sector.
Concluding Remarks
6 thousand, (iv) purchase of raw materials from non-lowest bids and loss of Tk 22 thousand (v) non-optimal production of available looms and machines and loss of Tk 90 lakh, (vi) unsold production worth Tk 4 crore . appox), which caused a crisis of current capital (vii) non-appropriation of purchase capital of Tk 5,000; were identified as illegal and must be responded to immediately. The top management was also well aware of these irregularities but terribly failed to take any action to prevent the government business. The factory management and top management are regularly receiving their salaries and other facilities, while the government-owned companies are suffering worldly and may even be closed down.
The Chittagong Steel Mills(CSM)Limite_d
TABLE-3: STATEMENT OF INSTALLED CAPACITY AND PRODUCTION PERFORMANCE OF CHITTAGONG STEEL MILLS LTD BY ITEMS (1997-98). The above matrix shows that there were many differences between the installed capacity and the production performance of the CSM in different parts of the production. TABLE 4: APPROVED BUDGET AND EXPENDITURE OF THE CSM ARE SHOWN IN THE FOLLOWING MATRIX (Fig.
Observation Remarks about CSM
Pragoti Industries Limited Introduction
All the structures were made in the form of a pucca building with a total area of 78,703 square meters. The table above shows that the actual production performance of this company is better than that of CSM. From the above matrix it can be seen that Chittagong Steel Mills was loss making for nine years and made profit only in 1988-89.
SOME ISSUES RELATING TO PRIVATIZATION IN BANGLADESH The Privatization Board, the Development of Institutions and Policies to
Preparation and Marketing of State Owned Enterprises
Mobilisation of Financial Resources for Privatization
Labour Issues Dealing With Unions: Social Safety Nets, Etc
But there is no such arrangement for the affected workers of textile factories and other industries. The Privatization Committee plans to introduce a training program for affected workers in the textile and other industries. The aim of the program will be to develop marketable skills for alternative employment and help build a viable micro-enterprise for affected workers.
Post Privatization Impact and the Role of Government m the New Economic Environment
The scope of the program will be to assess the number of interested participants and the likely training area for alternative employment. Increasing private sector confidence, by demonstrating the government's commitment to increasing the role of the private sector in the economy, is necessary for increasing private investment in the manufacturing sector in Bangladesh. Finally, the privatization of certain parts of the utilities and infrastructure sector will improve the efficiency of services so that they are reliably available on a timely basis at market prices.
Constraints of Privatization of State Owned Enterprises
The policy does not provide a well thought out time frame for the completion of the privatization programme. Whatever the reason, obtaining a ruling in a case, especially on behalf of the government, is excruciatingly difficult. Authorities expect that as the private sector's share of activity levels increases, the pace of economic growth will increase.
CHAPTER-VI
SUGGESTIONS/RECOMMONDATIONS AND CONCLUSION
At the same time, all experienced personnel working in the privatization cells of the ministries should be placed under the control of the Privatization Council and the necessary files and papers. The dispute should be settled in favor of the sectoral companies to ensure that: (a) state-owned enterprises are managed on a more arm's-length basis; (b) greater autonomy and accountability of the management of SOEs is encouraged, and (c) interference in the activities of SOEs is reduced. The value of the state-owned enterprises to be privatized must also be determined at a reasonable price for land and other assets.
CONCLUSION
- Industrial Sector
- Financial and Insurance Sector 14. Sonali Bank
- Transport and Tourism Sector
- Agriculture and Water Resources Sector
- Energy Sector
- Area Development and Spatial Planning Sector
- Trading Sector
Some of these forces and factors arise from the nature of the market in Bangladesh; some stem from government policies, programs and procedures. As such, the ultimate purpose of privatization is not to relieve state enterprises, but rather to privatize the economy. Therefore, privatization policy/reforms should be accompanied by a set of policies that ensure that entrepreneurs profit from productive efforts and not at the expense of the public.
FIRST SCHEDULE
Industrial Enterprises Placed under Bangladesh Jute Mills Corporation)
SECOND SCHEDULE
THIRD SCHEDULE
Annexe--c
- TEXTILE SECTOR-15
- JUTE SECTOR-7
- STEEL SECTOR-9
- SUGAR.& FOOD SECTOR-9
- CHEMIAL SECTOR-8
- MISCELLANEOUS-2 (53) Common Finishing Facilities
PROFIT AND LOSS ACCOUNT OF THE COMPANY OVER THE YEARS (all figures in l::ikh ' T::ilrn). State-owned enterprises for which a letter of identity (LOl) has been issued after final approval by the highest authority. LIST OF COMPANIES THAT CANNOT BE OFFERED FOR SALE FOR MATTERS BEFORE THE COURT.
BIBLIOGRAPHY
