ICT awaits a fillip
The government has recently appointed US-based management firm Boston Consulting Group (BCG) to help persuade leading global ICT companies to invest in Bangladesh.
The government has given BCG a target to bring 50 global ICT giants in the next two years, said Zunaid Ahmed Palak, state minister for information and communication technology. But he did not disclose how much they would pay BCG.
“We think this initiative will change the total ICT business of Bangladesh,” he told The Daily Star.
BCG—a leading adviser on business strategy—has opened 85 offices in 48 countries in the last six decades of its operations.
Palak, however, was uncertain of the number of companies the BCG would be able to bring. “Even if they can bring 20 to 30 companies here, that will be huge and that could change the whole face of the country.”
The government has targeted to earn up to $1 billion in foreign currency next year and $5 billion by 2021. And after 10 years, Bangladesh wants to be at the same level of Vietnam.
From the ICT sector, Vietnam's annual export earnings have reached $20 billion, which was zero two decades ago, said Palak.
Bangladesh earned about $800 million in foreign currency this year, he said quoting data from Bangladesh Bank and the Bangladesh Association of Software and Information Services (BASIS).
Palak is quite sure that some companies would feel very interested when they get to know about the country's tax benefits.
The ICT sector is enjoying tax holiday since 2014 with the government declaring 12 incentives for hi-tech parks in 2015 and 10 percent cash incentive on export earnings last year.
The government is establishing 28 hi-tech and ICT parks across the country and has already allocated plots or space to interested companies, officials of Bangladesh Hi-Tech Park Authority said.
Some companies from China, Saudi Arabia and Korea have already signed agreements with the authority to invest in Bangabandhu Sheikh Mujib Hi-Tech Park in Gazipur.
Even Prime Minister Sheikh Hasina attended meetings with the top company executives, as part of attempts to invite them to Bangladesh, said Palak.
The government is fully prepared to establish a complete ICT industry in the country and it is now investing heavily to increase human resources in the sector, he said.
Bangladesh offers cost-efficient production facilities now and this could be a major factor to encourage companies to come here, said Mustafa Jabbar, president of BASIS.
“We need more foreign investment in this segment...we have enough entrepreneurs in this field,” said Jabbar.
The opposite is also happening in Bangladesh, as some global tech giants have recently left the country.
Accenture, a global outsourcing firm that entered Bangladesh in 2013 by acquiring 51 percent share of Grameenphone's GPIT, will wind up its operations and lay off all 556 of its employees by November.
This year, Norwegian software solution provider Vizrt closed its Bangladesh operations followed by ekhanei.com, an online marketplace of Telenor.
“We are well aware about these situations and this is an ultimate result of global economic recession,” said Palak.
The ICT state minister said this kind of 'company exchange' would ultimately be helpful for the industry.
The fourth recession will soon hit the world when some companies would vanish and new ventures would come up, he said. That is why the government is taking preparations, he said.
“In the last two years, India lost over 20 lakh jobs in ICT sector and they are estimating losing another 20 percent of jobs in the next two years,” Palak said.
“We need to understand the reality and accept the challenges.”
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