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WB says labour productivity declining in jute sector

'Over-manning' leads to losses

By SY Bakht
Labour productivity In the jute industry In Bangladesh is nearly half of that in India and is declining In the public sector, according to a recent World Bank (WB) report.
The WB draft report on "Bangladesh: Restructuring Options for the Jute Manufacturing Industry" notes •that productivity In the industry falls far short of the potential and international standards.
The document only com-
pares the rate of labour productivity with that of India s as the technology used in both •countries are similar.
The average total productivity during the 1989-90 period for hessian, sac king and carpet-backings (CBC) in the public and private sector Jute mills stood at 3.2 and 4.13 tonnes per man a year respectively compared to 6.37 tonnes per man a year in India, according to the chart shown In the document citing figures of
Bangladesh Jute Mills Corporation (BJMC). Bangladesh Jute Mills Asso ciation (BJMA) and Jute Manufacturers Development Council (JMDC) of India.
Productivity in the BJMA mills Is belter than the public sector mills. According to the chart, labour productivity declined In the BJMC mills from 3.4 tonnes per man a year In 1988-89 to the current level. However, productivity tn the priviite mills increased by 0.56 tonnes per man per year during the same period.
The primary reason for the low labour productivity, the report points out. is related to the existence of large excess employment tn the sector.
Very high 'over-manning' particularly In the public sector came under sharp scrutiny in the WB draft report. It points out that the Jute mills function essentially as employment centres and that BJMC s employment practices emanate from social and political pressures.
The total employment tn the Industry, the document adds, Is estimated al 157.318 in FY91, of which 65 per cent is in the private sector and about 85 per cent of the employees in both sectors are classified as workers and the rest as 'officers and staff. Of the workers. 75 per. cent are permanent and the rest arc temporary (bacilt) or casual workers.
I lowevcr, the report notes, it is difficult to establish the precise number of employees because of the discrepancies present tn the mill records. "It is alleged that actual employment Is lower than what the records show in both the public and private sectors because the employment records are deliberately inflated to divert funds." the document adds.
According to the report, the main causes of over-manning in the industry include operating the machinery and equipment inefficiently.
Efficiency of the operated looms (output per loom) in Bangladesh is about 70 to 80 per cent of the efficiency achieved in India, the document points out. despite the fact that the mills arc considerably older tn India.
In the public sector, looms arc operated at about 50. 80 and 60 per cent of the achievable efficiency target set by BJMC for hessian, sacking and CBC respectively, the report
The workcr/loom ratio, which Is used as the main employment indicator in the Jute mills, is also very high in Bangladesh compared to that of other countries and international norms, the report adds. The workcr/loom ratio in BJMC mills arc. on average, about 45 per.cent higher than 'he ratios achieved tn India.
Furthermore, hiring more temporary workers than necessary to replace absentee
permanent workers also con tributes to low productivity.
In FY91. the report says, the public mills did not reduce the number of temporary workers to a level warranted by a sharp fall in exports. This resulted in an excess tempo rary hiring of about 10,000 workers leading Io a dramatic increase tn unit labour cost and financial losses In that
Other reasons of over-manning and consequent low productivity in the industry cited in the report includes setting of employment targets on the basis of tnstalk-d capacity and keeping a large number of offi cers. clerical staff and other icrsonncl not. directly Involved in production.
Part of the excess employment in the public sector is "open" consisting of workers assigned to redundant machines. the report notes, and the number of such workers is estimated at 11,090 by BJMC The rest is disguised in low labour productivity, the report adds.
In the private sector, the document points out. excess employment is manifested mainly In low labour productivity and because of strong and militant trade unionism supported by political interests, the private mills arc pressured to adopt the productivity norms established for the public sector.
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