Revive Sick Industries

The ongoing economic crisis roiling many countries has been largely attributed to their import-based economy. The countries whose import dominates the export trade have to spend a lion's share of their foreign reserves to buy fuel, food, medicines, and even luxurious items. During the crisis period such as the pandemic and war, the nations have hard time owing to disruption in supply chain and production. Sri Lankan economy went bankrupt because it lacked foreign currencies to procure fuel, food and medicines.

The countries with export-oriented and import-substituting industries can easily avert economic crisis precipitated by the external shocks. Many experts have warned that Nepal’s import-driven economy might face Sri Lankan fate if the timely measures are not taken to avoid it. Though Nepal’s economic situation is better than that of Lanka, Nepalis are bearing the brunt of soaring prices of fuel and other commodities in the international market. 

The crisis like that in Sri Lanka will not likely befall Nepal but it should be a wake-up call for policy makers for focusing on domestic production of basic goods and services. Once Nepal used to export food but today it imports grains worth billions of rupees, which has negative consequences for agriculture, employment and economy as a whole. Feeling the heat of import-driven economy, the country has realised the need for running its own industries that can help reduce trade deficit and imbalance in balance of payment.

The successive governments have felt that the country must focus on industrialisation for economic independence and prosperity. There is a growing consensus that it is not good to leave the economy to mercurial market forces that are not accountable to any legitimate institutions. Realising that the state should play an important role in developing industrial sector, the government has formed a task force with a view to revive the state-owned sick industries. 

The Ministry of Industry, Commerce and Supplies has begun the process to resuscitate those enterprises which have been closed down or reeling from serious fiscal troubles. In line with the Industrial Enterprises Act 2076, the task force is taking stock of physical, economic, technical, market and managerial aspects of those problematic enterprises. According to a news report of this daily, it is going to prepare procedures to re-operate nine ailing industries - Biratnagar Jute Mills, Janakpur Cigarette Factory, Nepal Metal, Gorakhkali Rubber Industry, Hetauda Textile Industry, Nepal Orient  Magnesite Industry, Birgunj Sugar Mill and Agricultural Inputs Company. Interacting with the industrialists in Biratnagar the other day, Minister for Industry, Commerce and Supplies Dilendra Prasad Badu said that work has progressed for the operation of sick industries owned by the government along with the private sector. 

Now the government should sort out the problems of industries located along the Sunsari-Morang industrial corridor. Likewise, it should devise proper strategy to bring the Biratnagar Jute Mills, the country’s first government-owned industry, into operation. Spread over an area of 46 bighas of land, Biratnagar Jute Mills has been shut down for the last six years. It has employed hundreds of people while promoting regional economy. It is an irony that the government-owned industries have stopped operating while the private industries of the same nature are making good profits. Thus, it is a positive step on the part of government to reopen the sick industries based on public-private partnership (PPP), lease or on their own.