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Bangladesh's digital service exports to decline by 29-44pc

FE REPORT | Thursday, 2 December 2021


Bangladesh's digital service exports are estimated to decline, ranging from 29 per cent to 44 per cent, depending upon the severity of restrictions and retaliatory measures on Cross-border Data Flow (CBDF), said a study.

The quality of the services can be negatively impacted if such restrictions are imposed, resulting in the increase in operational costs for local service providers, it said.

The findings of the study were shared by the Research and Policy Integration for Development (RAPID) at a webinar, titled 'Digital Exports and Cross Border Data Flows: The Bangladesh Perspective', on Tuesday.

The study looked into the impact of CBDF restrictions on the digital service exports of Bangladesh and its implications on the potential growth of the Information and Communication Technology (ICT) sector, cross border free flow of data, compliance costs on businesses, non-tariff barriers, and policy alternatives, among other unintended consequences.

However, in contrast to the findings of the RAPID's study, some stakeholders opined at the virtual event that CBDF restrictions could ensure data privacy and security.

Dr M Abu Eusuf, executive director of RAPID and also a professor of the University of Dhaka, moderated the event.

Dr Shagufta Gupta, Digital Trade Economist, made the keynote presentation at the webinar.

The presentation was followed by a panel discussion where stakeholders of the ICT sector expressed their views.

Raisul Kabir, co-founder and CEO of the software company Brainstation-23, emphasised that it was necessary to take a cautious approach while considering data localisation provisions.

He also stressed the importance of building the competitiveness of local firms to embrace the new-generation challenges unfolding on the digital trade landscape.

Mr Kabir also mentioned that there was a great opportunity for the cloud storage service in Bangladesh.

Though the National Data Centre is playing a significant role in this regard, the sector should strategically position itself to learn from the cloud services offered by Amazon and Microsoft, he added.

Tawhidur Rahman, senior technical specialist of the Bangladesh Computer Council, said that the upcoming provisions on data localisation were being adopted in a manner so that interests of the nation were served.

AKM Ahmedul Islam Babu, managing director and CEO of TechKnowGram Limited, said preserving data security should be a priority to build a brand image.

Building on this brand image, the country can attract more investors in the ICT sector to drive the growth and generate productive employment, he observed.

Mahfuz Rahman, a tech entrepreneur and general secretary of the Bangladesh Freelancer Development Society, said that Bangladesh was at a nascent stage with great potential.

He suggested conducting studies on the impact of businesses carefully.

Speaking on the occasion, Doulot Akter Mala, senior correspondent at The Financial Express, said it was important to carefully draft the privacy laws, ensure proper infrastructure and develop productive human resources, in order to become a leader in digital exports.

Md Akhtaruzzaman Adnan, assistant professor of the University of Asia Pacific, underscored the importance of producing competent graduates, with proper training on data privacy and security that will be critical to support the industry and drive digital exports.

In the discussion, Enamul Hafiz Latifee, joint secretary (Research Fellow) of the Bangladesh Association of Software and Information Services, said that restrictions tended to discourage Foreign Direct Investment.

It is important to learn from the experiences of the countries that are leading digital exports and also have a good reputation on protecting data, he suggested.

Addressing the virtual event, Dr Mahfuz Kabir, research director of the Bangladesh Institute of International and Strategic Studies, said through some effective policy action, the potential of the ICT industry could be unleashed more.

Data security must not be compromised and a forward-looking policy approach is of prime importance to boost digital exports, in order to outpace the global champions of digital trade, he proposed.

Md Jillur Rahman, assistant professor of economics at Jagannath University and also Research Fellow of RAPID, highlighted that Bangladesh ICT sector had the potential to drive exports in the post-LDC era.

In this context, it is imperative that Bangladesh take an economically pragmatic approach while adopting any data localisation policy, Mr Rahman added.

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