Digitisation will significantly cut costs, enhance business efficiency: AmCham president

Digitisation of businesses will significantly cut costs and enhance business efficiency, which is a must requirement for LDC graduation of the country, said Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh (AmCham) on Tuesday.

He said Bangladesh has made good progress so far, but will lose several benefits when it graduates from LDC status in 2026.

Therefore, to overcome the challenges, RMG and all other exports must focus more on reducing management expenses and operational costs and increasing efficiency, the AmCham president said. 

“We believe digitisation will cut costs and make international trade more efficient, reliable, secure, sustainable, and less susceptible to illegal activity or fraud in Bangladesh's international trade,” he said, while making opening remarks at the monthly luncheon meeting titled “Driving Financial Inclusion for Smart Bangladesh” of the chamber in a city hotel.

“We see, metro, tolls and rapid bus in Bangladesh are all running at close loop, these need to be open loop and American companies like Mastercard and Visa can support the government to establish an open loop ecosystem," he said. 

They have experience in different economics and want to transfer the same technology to Bangladesh, Mr ahmed said, adding that Mastercard and Visa have been closely involved in Bangladesh Bank’s “Cashless Bangladesh” initiative from day one and have so far launched cashless payments at many places.

He said every year, two million graduates further aggravate the persistent employable skill shortages amid AI and automation threats.

“To create more jobs, we need to diversify our exports and facilitate more local and foreign investment.”

Mentioning inflation as currently one of Bangladesh's major challenges, he said inflation management in FY 2024-2025 will be crucial for achieving a Smart Bangladesh.

The AmCham president said due to a lack of adequate logistics infrastructure and policy, higher logistics cost and longer lead time, the country is lagging behind other competitor countries.

“To be competitive in the global market, new logistics policy need to be implemented immediately and practically,” he said.

“Delays in government regulatory decisions need to be overcome," he said, adding that the introduction of the Crawling Peg System was a good initiative to stabilise the exchange rate.

“Given the prevailing economic landscape, we need more effective policy decisions to address the declining foreign exchange reserves, a deficit in the balance of payments, and the struggling banking sector to sustain the promising GDP growth," he added. 

Speaking as chief guest, State minister for finance Waseqa Ayesha Khan stated that the government will focus on economic stability and promoting education in science, scientific research, and innovation to transform Bangladesh into a Smart Nation by 2041.

Emphasising the use of technology at all levels, she said the government plans to digitise all public services, optimise the use of marine resources, ensure discipline in the financial sector, and create a conducive environment for industry setup and investment.

In the envisioned Smart Bangladesh, she said the per capita income is expected to reach at least $12,500, with less than 3 per cent of the population below the poverty line and extreme poverty eradicated.

“Inflation will be maintained between 4-5 per cent, the budget deficit will stay below 5 percent of the GDP, the revenue-GDP ratio will exceed 20 per cent, and investment will account for 40 percent of the GDP.”

The government aims for a 100 per cent digital economy and science and technology-based literacy, she said, highlighting that financial inclusion and easy access to financial services are crucial for poverty alleviation and boosting e-commerce.

The government and financial institutions have implemented various plans to encourage digital payments.

“By 2025, 30 per cent of transactions are targeted to be cashless, with a goal of reaching 100 per cent by 2031, as discussed in the first Smart Bangladesh Taskforce Meeting in August 2023,” she added.

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