Overall receipts from service sector plunge to $6.13bn
Bangladesh’s export earnings from computer services and software registered a 15.24% growth to $276.45 million in the last fiscal year, although the receipts from the entire service sector plummeted roughly 5.56% to $6.13 billion.
Computer services include software, data processing and consultancy for foreign clients.
According to data from the Export Promotion Bureau (EPB), Bangladesh earned $276.45 million, up by 15.24%, in the 2018-2019 fiscal year.
The country’s export earnings from goods declined by 16.93% to $33.67 billion in the 2019-20 fiscal year.
“Amid the sharp decline in merchandise export, a 15.24% growth in computer services is very encouraging for us,” Bangladesh Association of Software and Information Services (BASIS) President Almas Kabir told Dhaka Tribune.
Despite the fact that the sector had faced trouble with the outbreak of the Covid pandemic, the situation improved later, said Kabir.
In a situation described as the new normal, demands for new solutions and tools increased, helping the sector to earn better even amid the pandemic, he added.
“This is because of higher demands for solutions in online education, working from home and virtual meetings,” said the business leader.
Since the economy has been becoming operational gradually under the new normal situation, exporters were hoping for better earnings as people were using more digital tools and solutions to work from home and factories also, he added.
On top of that, the capacity of Information Technology-Enabled Services (ITES) and Business Process Outsourcing (BPO) service providers had increased, which was another reason for better performance, according to people in the sector.
This was because of the government’s policy support as well as for providing training to youth on data processing and outsourcing, they added.
Service sector export earnings decline
As the Covid-19 pandemic struck at economic activities across the globe and restricted movement, the country’s export earnings from the service sector witnessed a decline by 5.56% to $6.13 billion in FY20.
The service sector includes computer services and software, among other sub-sectors.
As per EPB data, Bangladesh earned $6.13 billion in FY20 against $6.49 billion in FY19.
Of the total earnings, the transport sector, including sea, air, rail and roads, emerged as the largest foreign currency earners in the services sector, earning $574 million, down by 13.45% compared to $662.76 million in the last fiscal year.
The telecommunication and information services sector fetched $474 million, down by 14.87%, followed by construction services with $263 million and the travel sector with $320 million, registering 39% and 13% decline respectively.
Government goods and services posted a 3.47% rise to $3.93 billion in FY20 against $2.84 billion in FY19.
While earnings from office maintenance services dropped by 9.44% to $1.49 billion, earnings from establishment expenses of international missions and organizations increased by 43.24% to $954 million.
Export earnings from the financial services, excluding insurance, have increased by 9.25% to $160 million during the period. Professional and management services earned $232 million, up by 2.50%.
“This year earnings from services fell as the services sector was interrupted by the lockdown and restrictions on people’s movement due to the Covid-19 pandemic,” Policy Research Institute (PRI) executive director Ahsan H Mansur told Dhaka Tribune.
However, there was a huge opportunity to earn more from the services sector if the nation could improve the quality of services and ensure timely delivery, said the economist.
The country could not tap the opportunity provided by the transportation services, especially airlines and shipping, due to poor service quality, added Mansur.
On the other hand, there was huge potential in the health care, tourism and education sectors, which had been neglected in the country, he maintained.
From the tourism and education services, in FY20 Bangladesh earned $318.50 million, down by 13% compared to $366 million in the previous year.