It is generally held that poorly-run state enterprises are grist to the mill of corruption. Now a new study has found that corruption, mismanagement and absence of proper planning are indeed responsible for the losses incurred by state-owned jute and sugar mills, leading to the closures of many, while those that still operate are barely limping along. The study report, disclosed at a press conference on Monday, explains the reasons for the closure or poor performance of these state-owned enterprises and debunks the excuse for outsourcing production to the private sector. One may recall that after the closures of all 25 state-owned jute mills in June, the government had promised to train and recruit the laid-off workers by "modernising" and "reopening" the mills under public-private partnerships. Such promises are often hollow, the study shows, as of the 75 industries handed over to private owners from 1993 to 2010, 31 were later found to be closed. Clearly, privatisation was just another excuse for rent-seeking by corrupt businessmen and officials, and didn't lead to the promised expansion of the industries either.

The question is why these state enterprises—on which the lives of thousands of workers and their families depend—keep failing despite massive capital injections and bailouts, and at what cost. The loss in financial terms is often pushed forward to legitimise privatisation. What's conveniently ignored, however, is the cost paid in sufferings by the workers and the region in which the shuttered mills are located. After the closure of the 25 state-owned jute mills, over 25,000 workers became redundant overnight. The government has also shut down six out of the 15 state-run sugar mills, laying off another 3,000 workers. The closure of these mills, located in the northern and south-western parts of Bangladesh, also hugely impacted the local economy, threatening the livelihoods of those involved with nearby grocery stores, hotels, furniture and clothing shops and many other small businesses. The social costs of these closures are no less significant, showing how profound the impact of corruption can be.

Unfortunately, the trinity of corruption, mismanagement and absence of proper planning is a problem that has plagued all our state enterprises. If run properly, these jute and sugar mills have huge economic potential, especially given the rising global demand for eco-friendly industries as well as home-grown products. Increasing sugar production, for example, can reduce market prices and make Bangladesh self-sufficient in sugar. So the government must find a way out of the destructive policies and practices that have led to the closure and underperforming of state-run mills. It must take concrete measures to reduce losses by increasing their production capacity. Corruption and inefficiencies must not be tolerated at all. The government should also immediately reopen the closed mills through the modernisation of equipment and taking legal action against those responsible for their sorry state.