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Aziz terms SoEs financial burden on govt PDF Print E-mail
Thursday, 17 January 2008

Staff Correspondent

Finance adviser Mirza Azizul Islam has said state-owned enterprises are financial burdens on the government and their role needs second thoughts. 'The government cannot go on subsidising the enterprises for ever,' he said Tuesday, reiterating the present administration's policy of washing its hands of industries and businesses.

The government can respond in two ways – outright sale of SoEs or offloading of shares and corporatising SoEs, he said. A number of public sector entities, including commercial banks, Biman and Bangladesh Telegraph and Telephone Board, have already been corporatised, he listed.

'Now they have to compete with the private sector,' the adviser said at a seminar on corporate governance practices for SoEs. As part of its plan for gradual withdrawal from SoE affairs, the government has decided not to appoint any official to the management boards, he said. Putting government officials on SoE boards as ex officio is not a healthy sign as it may create conflict of interests, he observed. 'Ministries are supposed to oversee the SoE operations. But how will they do it fairly keeping their people in the boards?' he pointed out.

Instead, he suggested, experts from various areas like management, finance and technology can be included in the SoE boards to promote good corporate governance practices in the public sector entities and enhance their efficiency to sustain stiff competition from the private sector. The private sector has gained the capacity of running big enterprises and has been operating in natural monopoly areas including power and telecoms, he said.

'In this background, the role of SoEs should be revisited.' Bangladesh Enterprise Institute organised the seminar as part of a series to promote good corporate practices in Bangladesh. Initiating the talks, BEI president Farooq Sobhan stressed that the government should nominate officials on SoE boards on the basis of merit under specific policy guidelines for selecting directors. 'Government-nominated board members are often found lacking knowledge and skills to understand the issues,' he noted. Two resource persons YRK Reddy and K Padma Kumar made presentations in the programme.

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