Inside view of a jute mill (Internet)
Trade is apparently a precursor to industrialisation. Trade and industry have always been intertwined, but the trajectory of world business over centuries indicate that trade has normally been ahead of industrialisation and created grounds for the industry to grow, observes Dhaka Courier Correspondent Wafiur Rahman.
In the wake of the independence of India and Pakistan in 1947, most of the jute barons left India leaving behind the jute industries which were mostly taken over by Indian business class called Marwaris. Tata and Birla – contemporary business empires virtually started with trading in jute. The Birlas are a Marwari family with Mittal and Bajaj. The latter two families also traded in jute.
After Pakistan’s independence, it turned out that the then East Pakistan produced the finest of jute fibers in the world, but the country lagged a jute industry. Necessity brought several groups of Pakistani business families, mostly from the then-West Pakistan, into the jute business and they established a good number of jute mills in various areas of East Pakistan. The most remarkable names among these families are: the Bawanis, the Adamjees, the Ispahanis and the Dawoods etc. West Pakistani business families also established a number of textile mills and other industries in East Pakistan.
During Pakistani period, the East Pakistan industrial development corporation (EPIDC) was created to promote industrial development in East Pakistan alongside private initiatives. EPIDC helped to establish many a industrial units in East Pakistan. There were very few Bengalis who came up to establish industrial units at that time. However, there were a hand full of them- to name some of them are Mr. Afilluddin from southern Bengal, Mr. Gul Box Bhuiyan of Narayanganj and Mr. AK Khan from Chittagong.
Bangladesh was liberated in 1971 and as a result West Pakistani business entrepreneurs went back to their native land leaving the business establishments behind in Bangladesh. All the abandoned industries, commercial units and other properties were nationalised under the constitutional provision of socialism. The government of Bangladesh created a good number of semi-government corporations to run industrial units in different sectors such as textiles, jute, chemicals, food and sugar, steel and engineering, transport, water ways, forestry, energy and petroleum etc. Private sector business was shunned until early 1980s.
The sector corporations ran fairly well for few years, but started failing very soon due mainly to public sector inefficiency, lack of personal interest for better performance, corruption, red tape and above all in the absence of business enthusiasm in the govt. operators. The corporations still exists to hold a major portion of Bangladeshi business but with hardly any success – the country has been enduring them for the last four decades though they have caused tremendous drainage of resources and thereby an economic hemorrhage to the nation.
Therefore, the govt. formed the Privatisation Board in 1993 which was reconstituted as Privatisation Commission in 2000, for the purpose of selling establishments and off loading govt. shares. So far 54 enterprises have been sold and shares in 20 enterprises have been off loaded as reported by the Privatisation Commission.
During those times, four public sector commercial banks mainly funded trading and service sector businesses. The govt. established specialised banks and financial institutions like Bangladesh Shilpa Bank (BSB), Bangladesh Shilpa Rin Sangstha (BSRS), and Investment Corporation of Bangladesh (ICB) for promoting and funding industrial enterprises as special govt. initiatives for industrialisation of the country. These banks and financial institutions operated mainly with assistance from IDA of the World Bank, the Exim bank of South Korea and IDB.
It was in this period significant investment and progress was made by Bangladeshi entrepreneurs in textile weaving, textile spinning, pharmaceuticals, chemicals, ship building, water transport etc. with the help of the foregoing banks and institutions. These institutions enjoyed their heyday up to about 1990 and then started declining partly because of drying credit lines and partly because of inefficiency in project management, fund realisation and malpractices. The Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha was merged together in January 2009 and has now been operating as a commercial bank under the name of Bangladesh Development Bank Ltd. (BDBL).
The emergence of private banks in 1983 served as a milestone in the transformation of Bangladeshi business to the present state and has served as a vehicle for expansion and diversification of business resulting in remarkable national progress. If we call at all the up-to-date achievement in industrialisation to be a kind of a “Bangladeshi version of industrial revolution” that was initiated by the first generation private sector commercial banks lead by Islami Bank Bangladesh Ltd. by funding readymade garments (RMG) projects starting back in 1984 and continuing till date. These banks also funded projects in other sectors like textiles, pharmaceuticals, chemicals, cement, paper, ship building, transport, glass industry, cigarettes, beverages, leather and leather products, jute and jute goods, ceramics and so on.
Over the last 45 years the readymade garments sector has mutated into an industrial behemoth at the national and international levels capturing the second largest position of exporter of readymade garments in the world and fetching an annual sale proceeds of about $14 billion for the country. The income surplus of the readymade garments sector virtually supplied the seed money for founding projects in other sectors, which together with the RMG sector have been contributing to the national transformation from agriculture based to an industry based economy.
The panorama of the national economy is being changed everyday enormously by the activities of the business community and the resultant effect is being felt by every quarter including successive governments. The comparative advantage factor and the efficiency and resilience of Bangladeshi business has now made a seat for the country in the international table making it inevitable for us to continue to offer the world with goods and services and in exchange get paid and respected. The people of the country and the government have nothing but to recognise this development and cooperate accordingly; the better the cooperation, the brighter the future.