'Exploitation of loopholes in the regulations by existing businesses leads to sufferings for both the customers and the new businesses'
Bangladesh should improve internet quality and accessibility to reap the benefit of digitalization in trade and services, said experts at a virtual dialogue on Monday.
They said Bangladesh should increase internet affordability, ensure quality internet and ICT skills development, reduce digital divide and urgently address policy gaps related to trade in digital services.
Centre for Policy Dialogue (CPD) and Friedrich Ebert Stiftung (FES), Bangladesh jointly arranged the dialogue on ‘’Trade in Services in the Digital Age.”
“Not only accessibility to the internet, but also the quality of internet is extremely important for the delivery of digital services,” said Dr Ratnakar Adhikari, Executive Director for Enhanced Integrated Framework (EIF) at the World Trade Organisation (WTO).
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Talking about the internet affordability, he said the internet price is relatively high in Bangladesh.
According to the Affordability Drivers Index by Alliance for Affordable Internet, Bangladesh ranks relatively better among LDCs, but the countries like Senegal, Cambodia, Rwanda and Nepal are ahead of Bangladesh in terms of affordability, said Dr Adhikari.
Dr Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem) questioned the regulatory framework in Bangladesh for digital trade.
He highlighted how exploitation of loopholes in the regulations by existing businesses leads to sufferings for both the customers and the new businesses.
Syed Almas Kabir, president of Bangladesh Association of Software and Information Services (BASIS) said digital payment needs to be flourished in Bangladesh to ensure a complete process of digital trade.
He said some 95-96% internet users now have to depend on mobile operators, while only 4-5% on broadband internet.
"If we want to provide services digitally, they [the people] actually need a high speed network or broadband network…… The transmission cost is very high and that is actually creating a digital divide between the rural and urban areas,” he said.
He, however, said amid the internet affordability problem, the digital payment has increased from only 15% to 32-35% during the Covid-19 pandemic.
“So, that is a good sign. That is why I want to propose to the government to incentivize the digital transaction,” he said.
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In order to promote the digital transaction, Almas Kabir proposed to provide cash back incentive to all kinds of digital transactions for the next 3-5 years, keep all kinds of digital transactions under the purview of VAT and make the digital payment mandatory for all government fees.
About ICT skills development, he said there is a gap between academia and the industry. “We need to minimize the gap.”
He said some 22,000 students graduate every year from the computer science and engineering subjects, but they have to go through a training process for the next 3-6 months to become employable.
"If we want to reduce this gap, we need to incorporate the skill development training in their four-year academic curriculum,” said the BASIS president.
CPD Executive Director Dr Fahmida Khatun, who moderated the dialogue, said the expanding cross-border tradability of services is opening new opportunities for national economies and individuals in the 4IR revolution era.
CPD Distinguished Fellow Professor Mustafizur Rahman focused on the need of getting engaged in global discourse since it is also about competing in the domestic market with foreign goods.
He recommended that Bangladesh should have a comprehensive trade and industrial policy that reflect all the important issues regarding digital services and e-commerce.
General Manager of Payment Systems Department at Bangladesh Bank Md Mezbaul Haque said the E-commerce sector of Bangladesh is dominated by F-commerce. Such businesses are not under the formal banking system causing a major barrier to digital payments.
He said there is interoperability from a bank to another bank and bank to MFS but not between one MFS to another MFS. “We’re working on it. We are confident that we'll be able to bring this interoperability within a few months.”
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Besides, Executive Director of Institute of Policy Studies of Sri Lanka (IPS) Dr Dushni Weerakoon, Executive Director of South Asia Watch on Trade, Economics and Environment (SAWTEE) Dr Puspa Sharma, Senior Economic Affairs Officer at the United Nations Conference on Trade and Development (UNCTAD) Dr Rashmi Banga, Chief Executive Officer of the HSBC Bangladesh Md Mahbub Ur Rahman, Associate Professor of Research and Information System for Developing Countries (RIS) Dr Priyadarshi Dash, FES Resident Representative for Bangladesh Felix Kolbitz delivered the introductory remarks, while CPD’s former research associate Md Kamruzzaman made the keynote presentation.
In the keynote presentation, Kamruzzaman said innovative technology is seeping into the mechanisms of economic sectors worldwide. Professional services are expected to be heavily disrupted by artificial intelligence (AI), data analytics, machine learning and digital platforms, he said.
He said Bangladesh’s exports have been heavily concentrated in the textiles and garments sector. Strategic development and promotion of services trade are among the key approaches needed for Bangladesh to break into new markets. Eliminating barriers to trade in services is therefore vital to ensure market openness in the digital age, he added.