Home ›› 12 Jun 2022 ›› Opinion
The Information and Communication Technology (ICT) sector is expected to generate 5 billion USD in export revenue by 2025. At least one lakh people are expected to be employed in the ICT device manufacturing industry in the country. By 2025, a roadmap of 500 million export revenue from the ICT sector has been set. The export revenue of digital devices made in the country in the information technology sector is expected to increase from one billion dollars to 5 billion dollars by 2025. At the same time, the domestic market for ICT products and IT-enabled services is expected to reach 5 billion dollars.
The ICT products, such as mobile devices, computers, and laptops, will play a significant role in capturing the potential 10 billion market for information technology at home and abroad over the next couple of years. As part of this, the ‘Made in Bangladesh’ roadmap has been taken up to expand the opportunities for setting up digital device manufacturing industries in the country and brand local products in the international market.
Proper implementation of the roadmap will ensure the employment of at least one lakh people in the ICT device manufacturing industry in the country. Laptops and mobile phones will be exported abroad to meet the domestic demand of about 200 million. The ICT Division hopes that if the ‘Made in Bangladesh’ action plan is implemented, Bangladesh will become one of the hubs for producing ICT and IoT (Internet of Things) products. It will also help the government implement a digital access agenda for all.
The growing demand for digital devices and consumer appliances from the country’s emerging middle and affluent class has created a conducive environment for Bangladesh’s entry into the international high-tech industry. The roadmap prioritizes the use of domestically produced ICT products in government procurement. To this end an initiative has been taken to increase the awareness of the officials of the government agencies involved in shopping. Efforts are also being made to set up hubs in Singapore, the UAE, England, or any other country to facilitate the export of domestically produced products.
The new roadmap focuses on various issues, including the creation of skilled manpower, quality improvement of products, quality assurance, assessment of global demand, enhancement of the image of Bangladeshi products worldwide, protection of intellectual property, and enhancement of research.
Apart from the ICT department of the government, the Ministry of Commerce, Ministry of Foreign Affairs, Ministry of Planning, Posts and Telecommunications Division, Ministry of Industries, Ministry of Education, and other ministries are also involved in this colossal task. The Bangladesh Investment Development Authority (BIDA), Bangladesh Export Processing Zones Authority (BEPZA), Export Promotion Bureau (EPB), Bangladesh Standard Testing Insitute (BSTI), Bangladesh Industrial and Technical Assistance Center (BITAC), Skills Development Authority (SDA) and University Grants Commission (UGC) will work together. To make the roadmap a success, various non-government organizations, as well as various organizations of entrepreneurs, will have essential responsibilities.
According to the International Data Co-operation (IDC), Bangladesh imported 34 million mobile phones in 2017, valued at 117 million. In 2018, the company valued the country’s laptop market at 300 million. The Bangladesh Hi-Tech Park Authority (BHTPA) was established to take advantage of this potential internal market. For this, several series of incentives are being given. Bangladesh Hi-Tech Park Authority (BHTPA) has announced income tax rebates for IT park founders and investors. In addition, the production of ATM booths and CCTV cameras in the country will be given supplementary duty exemption, including import and exemption from regulatory duty. The investors will get a duty exemption on imports of capital equipment and construction materials. The new roadmap has been prepared to make the ‘Made in Bangladesh’ enterprise dynamic by utilizing these facilities.
Moreover, the ICT department works on the availability of manpower in a relatively competitive pay structure. Local market demand and the supportive structure of government policy play a key role in making Bangladesh an attractive market for digital device production.
With the example of Walton, Samsung, Oppo and DataSoft, which have already successfully set up production lines in Bangladesh, these initiatives have raised the possibility of further development in the local device manufacturing industry.
However, the ICT Division has identified some obstacles in implementing the roadmap, among which the aspect of higher capital expenditure in Bangladesh has been kept at the top. The main problems are lack of skills, weakness of industrial support ecosystem, quality assurance and international certification of locally produced products, lack of rules to prioritize local products in government procurement, lack of public awareness about local products, and lack of financial incentives for digital device makers.
A new roadmap has been formulated focusing on four strategic issues. These include capacity building, awareness-raising and branding, research and development, and policy support at the local level in the public-private sector. Under this, some short-term action plans are to be implemented by 2023, medium-term to be implemented by 2026, and long-term by 2031. Short-term analysis of domestic and international technological product markets, demand assessment, capacity building, and marketing strategies will be formulated.
At this time, the universities will set up testing labs to ensure the quality of IT products. The Ministry of Commerce will take initiatives to increase exports through bilateral and multilateral international agreements. The universities will produce five lakh, skilled manpower for the ICT sector in the country at this time. Skills Development Authority will develop international standard training modules and syllabus. In the next two years, the Ministry of Foreign Affairs will formulate and implement an action plan for understanding the attitude of other countries towards Bangladesh and overcoming the negative attitude.
The ICT Division will create a national portal with details of ICT products produced in the country. Besides, initiatives will be taken to increase the awareness of the officials involved in government procurement of domestic products. The National Board of Revenue will work to bring down various tariffs and taxes on the digital device and its backward linkage industry to a reasonable level.
The Ministry of Finance will provide loans on easy terms to the manufacturers of ICT products. The Ministry of Commerce will look into the issue of incentives for exporting these products. The initiative to reduce imports and increase exports through increased production of ICT products is certainly to be commended. However, unless there is a plan to increase value addition, such initiatives will not yield effective benefits. Most of the entrepreneurs of technology products are importing almost 100% of the materials from abroad and adding only to the domestic factories. As a result, the government is deprived of revenue as it is not taxed as a finished product. On the other hand, the factory is being run by hiring only nominal people as it is only an additional work.
The Chinese mobile phone brand Xiaomi’s domestic factory, which was launched a few days ago, employs only 25 people. But if cent per cent of the materials were produced in the country, a few thousand people would be needed. Despite the importance given to industrialization in our country, the issue of backward linkage has always been neglected. If raw materials and parts cannot be produced in the country, value addition will not increase. To provide tax exemption and other opportunities to the entrepreneurs of technology products as a domestic industry, to impose a certain amount of value-added obligation.
The country’s software development and solutions sector has reached a stable position. Now we must strengthen the hardware industry in bicycles/bikes with the software industry. Although dozens of companies currently produce mobile phones in the country, very few companies have developed laptops. Initially, local factories will only add digital devices. This is a fact.
Emphasis should be placed on job creation and value addition. This roadmap is beneficial as there was still very little investment in setting up a high-tech park. There is a lack of coordination among the various ministries and departments of the government to support the digital device industry. The investment will also increase if the new roadmap ensures coordination.
Hiren Pandit is a researcher and columnist, he can be reached at hiren.bnnrc@gmail.com
