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Substituting software imports with local and open-source products

  • Published at 12:10 am August 19th, 2017
  • Last updated at 12:54 pm August 19th, 2017
Substituting software imports with local and open-source products

It is gratifying to read Dhaka Tribune news reports that Bangladesh’s export of software has finally reached $191 million in the last financial year.

However, before getting complacent, we should recall that the indicator of international competitiveness in any industry is net exports, which is the value of exports minus imports. Positive net exports in any sector implies that the country sells more to the world than it buys, and is thus truly independent in that sector.

When we try to calculate net exports of software from Bangladesh, however, we run into a major problem. We know that the vast majority of computers in the country run pirated versions of MS Windows and MS Office.

These have not been paid for, but by law, they must be paid for as software piracy is illegal (however, the laws of intellectual property are poorly enforced and so pirated DVDs of Microsoft software are widely available). However, we can calculate the economic value of pirated Microsoft software from published statistics and market prices.

According to the World Bank, in 2006, Bangladesh had 2.4 computers per 100 people. If we conservatively assume that this same figure still holds, then the total number of computers spread across the population would be (2.4/100) x 165 million people or about 4 million. Each of these computers has a pirated copy of MS Windows, which costs $100, and MS Office which costs $200 (total $300).

So, the total value of pirated Microsoft software in the country is approximately $300 x 4 million computers = $1200 million. This is a large figure, but it is a total which does not have to be purchased annually.

Assuming each computer has a life of five years, the annual replacement cost will be $1,200 million/5 years = $240 million per year. Even this conservatively calculated figure is larger than Bangladesh’s software exports; so according to this calculation, the country is a net importer of software.

Once pirated/imported software has been replaced by free/open-source software like LibreOffice and Linux, the export figures of Bangladeshi software will actually mean something

On the one hand, the local software industry should be congratulated for reaching a respectable level. However, we should bear in mind that we are still far from holding our own in the international IT market; the value of our imports (in terms of pirated MS software used) is still higher than our exports.

Our current lax intellectual property enforcement shields us from this uncomfortable fact, but as the US government pressures Bangladesh to improve the policing of Microsoft copyrights, we can expect the pirated DVDs to gradually disappear, as they have in more developed countries. Then the country will have to actually pay for its imported MS software, and the foreign currency from software exports will effectively be swallowed up by import bills.

A simple strategy of import substitution would hugely benefit the country. We can easily prevent the loss of $240 million per year by replacing MS software with free/open-source software.

MS Office can easily be replaced with LibreOffice, which is freely downloadable from www.libreoffice.org and has an MS Office compatible word-processor, spreadsheet, and presentation tool.

MS Windows can also be freely replaced by Ubuntu Linux (www.ubuntu.com/desktop) which is comparable in functionality and ease of use.

Mozilla Firefox web browser and Mozilla Thunderbird email software are also included in Ubuntu Linux as free alternatives to Microsoft Explorer and Outlook.

Linux also includes free equivalents to Adobe Photoshop and Illustrator (www.gimp.org and www.inkscape.org). Kazi Farms Group, Central Women’s University, Dhaka Tribune, and Deepto TV are among the organisations in Bangladesh which have already switched to free/open-source software, saving the companies and the country millions of dollars in software licencing fees.

Other companies and government departments should proceed accordingly.

Once pirated/imported software has been replaced by free/open-source software like LibreOffice and Linux, the export figures of Bangladeshi software will actually mean something, as they will represent a net export. The country will save hundreds of millions of dollars in valuable foreign currency every year as a result.

All that is required is that IT departments in government and private organisations get trained on Linux so that they can support computer users as they migrate to new alternatives.

Training of IT personnel in Linux and free/open-source software should therefore be a priority.

Zeeshan Hasan is a director of Kazi Media, the company behind Deepto TV. He is also the managing director of Sysnova.