In the era of the fourth industrial revolution (4IR), digital trade in services has become crucial for Bangladesh’s economic growth. The global economy is undergoing digitalisation which has been accelerated during the pandemic. The expanding cross-border tradability of services is indeed opening new opportunities for national economies and individuals. In this backdrop, Bangladesh needs to prepare for reaping benefits from digital trade in services. In this connection, it is imperative to explore how Bangladesh can benefit from digital trade in services and what it will take for Bangladesh to adapt to the new trade regime in the digital age. Also, some action-plans are required to remove the challenges and impediments in this sector.
In view of the above, the policy gaps related to trade in digital services need to be addressed urgently to ensure digital inclusivity. More importance should be given to creating awareness and enhancing skills to prepare the future workforce. Access to information for all the stakeholders at the district and sub-district levels has to be ensured. Additionally, identifying and easing financial constraints are essential. The policymakers may strengthen their monitoring mechanisms in order to avoid any malpractices in the process. Moreover, to incentivise female participation in ICT related education and employment is a need of the hour.
Shedding light on these issues, the Centre for Policy Dialogue (CPD) and Friedrich-Ebert-Stiftung (FES) Bangladesh Office organised a virtual dialogue on Trade in Services in the Digital Age on Monday, 19 July 2021. The dialogue was held as part of the project titled ‘Future of Work in Bangladesh’ which is being implemented by CPD, with support from FES Bangladesh.
The keynote presentation at the dialogue was made by Mr MD Kamruzzaman, a former Senior Research Associate of CPD. Sharing the key findings from the study, he mentioned that 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. 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.
Mr Kamruzzaman added that the volume of trade in digital services has jumped manifold in Bangladesh. The pandemic has also encouraged the consumers in Bangladesh to avail goods and services through online platforms. Poor business environment impedes expansion of trade in services in our country, especially in terms of small and medium-sized enterprises (SMEs).
Dr Fahmida Khatun, Executive Director, CPD moderated the session. In her opening remarks, Dr Fahmida said that, digitalisation has made the trade in services much easier. Expanding cross-border tradability of services is opening up new opportunities for national economies and individuals. In order to reap the benefits of the 4IR, adequate internet connectivity and ICT infrastructure have to be in place, weaknesses in trade facilitation and trade logistics should be removed, and skills of workforce will have to be increased.
Mr Felix Kolbitz, Resident Representative, FES Bangladesh delivered the introductory remarks at the dialogue. He shared that CPD, in collaboration with FES Bangladesh, has undertaken a study on “Digital Trade in Services in Bangladesh: How Can Bangladesh Seize Opportunities?” The study discusses how Bangladesh can take advantage of the fast-evolving digital trade in services and what it will take for Bangladesh to adapt to the new trade regime in the digital age.
Dr Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework (EIF), World Trade Organization (WTO) highlighted the issue of inclusivity in digital trade due to the accessibility, affordability and application challenges. He also highlighted the fact that digital services are not sufficiently inclusive.
Dr Selim Raihan, Professor, Department of Economics, University of Dhaka and Executive Director, SANEM questioned the regulatory framework in Bangladesh for digital trade and highlighted how exploitation of loopholes in the regulations by existing businesses leads to sufferings for both the customers and the new businesses. He added that, technological development has led to a fall in labour’s share of national income.
Dr Rashmi Banga, Senior Economic Affairs Officer, United Nations Conference on Trade and Development (UNCTAD) shed light on how the COVID-19 pandemic has accelerated the digital revolution. Dr Banga suggested for formulating a comprehensive national digital transformation policy and also highlighted the importance of building a data infrastructure for creating new digital products and services.
Mr Md Mahbub Ur Rahman, Chief Executive Officer, The Hongkong and Shanghai Banking Corporation Limited Bangladesh stated that the opportunities in digital trade are growing and a national realisation is required on what technological advancements are required to grasp these opportunities. Mr Rahman mentioned that the more we use technology the more we face the threat of cybersecurity. Adequate preparation and investment are required to create firewall against cyber-attacks.
Mr Syed Almas Kabir, President, Bangladesh Association of Software and Information Services (BASIS) opined that digital payment needs to be flourished in Bangladesh to ensure a complete process of digital trade. He also called for mass awareness among netizens about digital platform usages. He focused on the issues related to data privacy and security. He also said, Bangladesh is not into research and development regarding digital services.
Sharing the growing digital trade scenario in Bangladesh, Mr Md. Mezbaul Haque, General Manager, Payment Systems Department, Bangladesh Bank stated that 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.
Dr Dushni Weerakoon, Executive Director, Institute of Policy Studies of Sri Lanka (IPS) also talked about the surge in online activities due to the pandemic. She pointed out how there is a clear gender disparity in accessing ICT facilities and in developing competence in this regard.
Dr Puspa Sharma, Executive Director, South Asia Watch on Trade, Economics and Environment (SAWTEE) mentioned that digital divide across countries and within countries are both areas of concern. He also told that unless IT infrastructure is reliable, the full benefit of IT infrastructure access cannot be derived
Dr Priyadarshi Dash, Associate Professor, Research and Information System for Developing Countries (RIS) shed light on some prospects to compare the scenario between India and Bangladesh. He said that the Government of India has liberalised its foreign direct investment (FDI) policy significantly over the years. He recommended that the South Asian countries need to build a skill-set which will allow them to remain competitive.
Dr Fahmida ended the discussion thanking everyone. High-level policy makers, researchers, development practitioners, academics, business leaders, civil society activists, international development partners and journalists were present at the dialogue.