The World Trade Report 2023, themed ‘Reglobalisation for a Secure, Inclusive and Sustainable Future’, recently released in Geneva, Switzerland, sheds light on a significant shift in Bangladesh’s export sector. The growth rate of digital services exports is eclipsing that of traditional goods, underlining the potential of digital services in the nation. although this sector remains relatively nascent and requires a policy push for full potential realization.
The report, citing World Trade Organisation (WTO) estimates, reveals that since 2005, Bangladesh’s exports of digitally delivered services have grown annually at a rate of 15%, compared to a slower 11% growth rate for goods. This notable trend is not confined to Bangladesh; global exports of digitally delivered services have tripled since 2005, outstripping the trade in goods and other services. Among the Least Developed Countries (LDCs), Bangladesh distinguishes itself by its rapid escalation in digitally delivered services exports, nearly tripling the value of professional services exports between 2016 and 2021.
This ‘digital revolution’ has facilitated specialization in business-service activities and services offshoring. The report highlights the transition of several countries, including Bangladesh, Cambodia, Romania, and Vietnam, from specialization in low-value-added supply chains, such as textiles and apparel, to participation in international high-tech production networks.
Bangladesh has also emerged as the leading supplier of the online global workforce in creative and multimedia services, with approximately 14% of the global online freelance workforce residing there. Predictions indicate an 18% annual growth in e-commerce, spurred by improved internet access and burgeoning consumer demand.
Data from the Bangladesh Association of Software and Information Services (BASIS) included in the report indicates that in 2021, around 11 million users had access to high-speed internet, and 8,280 digital centers were established, extending ICT services to the most isolated and vulnerable segments of the economy.
In fiscal year 2020-21, nearly 400 companies digitally exported services worth $1.3 billion to 80 economies. This figure rose to $1.4 billion in FY 2021-22, serving 137 destinations. Notably, the contribution of domestic companies to ICT exports surged from 75% to 90%, contributing 1.28% to Bangladesh’s GDP. This sector has directly created 300,000 jobs, a number expected to escalate to 500,000 by 2025.
Nesar Ahmed, a retired joint secretary of the commerce ministry, confirmed the WTO report’s depiction of Bangladesh’s digital services status in a phone interview with FE. He underscored the necessity of a robust legal framework and harmonized rules and regulations to invigorate the sector and render it predictable for investment. He also highlighted the need to address international payment-related security issues.
The report underscores the increase in computer services from $182 million in FY 2017-18 to $303.7 million in FY 2020-21 and highlights the ‘Digital Bangladesh’ initiative’s pivotal role in bolstering digital infrastructure.
Professional services exports, including legal, accounting, management consulting, and public relations services, expanded by an average of 30% annually, from $60 million to $171 million between FY17 and FY21. Despite the pandemic’s challenges, exports to China of advertising and market research services tripled, while architectural and technical services almost doubled.
Mr. Nesar noted that without a sufficient legal framework, Bangladesh could not participate in any plurilateral or multilateral trade agreement on ICT or digital services under the WTO. He added that similar to the trade-facilitation agreement, Bangladesh and other developing nations must seek waivers or extended implementation periods.
The WTO E-commerce Joint Statement Initiative (JSI) is designed to establish common rules to enable electronic commerce, promote openness and trust in e-commerce, and facilitate market access for e-commerce firms. At present, 86 WTO members are engaged in plurilateral negotiations on the text.
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