By Saddam Hossain
From the crypto crash, to Metaverse’s continued financial problems, to the ongoing horror show that is the Twitter controversy, it is safe to say that the digital space has been experiencing an unprecedented level of glitching. Add to that, the real-world issues like the war in Ukraine, as well as a staggering global economy in the wake of a pandemic, and one can’t help but wonder where our future is headed. Bangladesh finds itself at a strange capsize point, and there’s no one better to comment on the road ahead than Syed Almas Kabir. MWB caught up with the President of Bangladesh Association of Software and Information Services (BASIS) for a quick chat
The global economy had barely begun to recover from the pandemic before being hit by inflation, uncertainty and a war. What strategies, in your opinion, must Bangladesh adopt in order to get through these challenging times?
Amidst the current global economic turmoil, we have to be careful in maintaining austerity measures as there are few other options. These measures are being adopted and deployed by other countries around the world.
As you mentioned, our economy had just begun to revive from the shock brought about by the Covid-19 pandemic, and then it was hit hard by the ongoing Russia-Ukraine war. We took one step forward only to be forced to take two steps back.
So now, we have to focus on viable solutions which will act as a balance so that any measure which is taken for one side may balance the other side. We should be taking output-based decisions. If we do this, the austerity measures we are considering will bear fruit.
We also have to increase the use of technology to make our resource consumption efficient. Riding on modern technology, we can achieve higher production with comparatively fewer resources.
You have spoken at length about providing a support system for startups in particular. What challenges are you facing in the present scenario?
It is true that the ecosystem of Bangladeshi start-ups is taking a shape, though it may take a little longer before we get to where we want to be. If we observe the start-up culture closely, visible changes have occurred only in the past decade. Are there challenges? Yes, numerous. I can roughly divide the challenges into three categories.
Firstly, the challenges regarding access to finance. There are many entrepreneurs who do not know how to find investors, and there are many investors who cannot trust entrepreneurs.
Secondly, the investors, mainly venture capitalists, have a mindset that they will invest a certain amount and then, after 5-6 years they will exit with a handsome size of profit.
But this ‘exit’ is steep in Bangladesh. Our existing policies are not favorable towards a smooth exit. An investor has to go through a lot of trouble to get returns on his investment. Although there aren’t any legal bindings for this, they face a lot of hassle, particularly at banks. In practice, there is a significant amount of red tape the investor has to go through, which serves as a disincentive.
Another major disincentive for investment is the fact that there is no policy consistency. The policies and regulations change from year to year, thus failing to provide a sense of security regards investment.
In fact, we have negative branding about ease of doing business, and it is imperative to rebrand this image as soon as possible. If we can’t, the investors will go elsewhere.
It is alarming that in the last 7-8 years we have received investments totaling close to $800 million, where competitors like Malaysia and Pakistan get about $500 million in investments every year.
The government would be well served to ensure policy consistency of at least 5-10 years to create an investment-friendly environment for investors and improve ease of business. The good news is, the government is, in fact, currently doing a lot of work on this.
The third and final major roadblock is the lack of innovation in our country’s start-ups as most of our startups copy everything from the business models to the product and branding of existing companies.
Even if there are some organic businesses, most of these have developed only in the context of Bangladesh, and their blueprints cannot be implemented worldwide.
When global investors invest in a start-up, they first want to know how scalable it is, whether it can be offered internationally, and it has been a challenge for local businesses to provide them with that confidence.
Experts recurrently say that overdependence on apparel items may hinder our growth. As an IT enthusiast, how you define the potential of Bangladesh in exporting IT and related products?
Our export basket must be diversified and the government recognizes this and has identified sectors with potential, such as IT, pharmaceuticals, plastics, light engineering, agro products, etc.
In my opinion, IT exports have the biggest potential in this regard and the sector needs the most emphasis.
The reason behind this is, in a densely populated country like Bangladesh, there is insufficient space to set up large factories, because, amongst other things, it might also impact agriculture which would disrupt food production.
But the IT sector does not need so much space, it needs talent. An entrepreneur can earn millions of dollars sitting in the corner of his small room if he has a laptop, internet connection, and the required talent.
Another favorable facet is that the average age of the people in Bangladesh is 28 and this age generation is comparatively more IT savvy which is a plus point. Pharma, plastic, and leather sectors have a lot of potential but the younger generation will prefer to work with IT.
So, it seems important to focus more on where the workforce is easily available and the government should harness this IT-savvy generation.
As the chief of BMCCI, what potential do you see in bilateral trade between Bangladesh and Malaysia? What initiatives do you feel are needed to accelerate the trade?
The scope of bilateral trade between Bangladesh and Malaysia is wide. Bangladesh exports garments and a few agro products to Malaysia and we primarily import palm oil from Malaysia.
Many of our products have export potential in Malaysia. Malaysia is a big market for plastics, leather, pharma, IT, etc. and we have the opportunity to grab a market share for these products.
We have another possibility. Malaysia’s Penang Province is called the Silicon Valley of Asia. Almost all chip makers like Intel, AMD, and Motorola have factories there. Currently, the issue they are facing is that most of the senior engineers working in these firms later move to more lucrative Korea or China, which leaves Malaysia with a demand for engineers. Bangladesh could potentially fill that gap. If the Penang province authorities and top universities in Bangladesh could shake hands on this, an opportunity will be created for Bangladeshi engineers to work in chip design.
How can Bangladesh get more FDI from Malaysia? Which sectors should be prioritized for trade?
We are thinking about an FTA with Malaysia, and discussions are also underway, with the potential to more foreign direct investment.
With regards to a Foreign Trade Agreement, the Malaysian government has expressed interest, but our side has to consider a few things. Bangladesh imports more in the bilateral trade and if the FTA is signed once, the government is likely to lose a lot of customs revenue.
However, I think if there is an FTA, we can compete with countries like Vietnam, and China to export more to Malaysia and attract more FDI.
The recently concluded “Made in Bangladesh Week 2022” aims to establish the brand of Bangladesh in the global apparel sector. As someone who has been vocal for the need to build the necessary skills to face the 4IR, how do you feel that the ICT industry can bridge those gaps in the apparel sector?
The garment sector of Bangladesh has flourished because of cheap labor and it is the main attractive point for which foreign buyers place a lot of orders.
As an outcome of the fourth industrial revolution, if such a situation arises that factories no longer employ people as robots are doing all the work from production to shipment, then the concept of cheap labor will be outdated.
As automation is approaching, garment owners will think about the need to deploy robots. And if the robot is installed, the factory will be saved from many hassles.
That’s why the manufacturers will want more and more automation. But it is true that more automation will increase unemployment.
Moreover, if robots can work, then Europeans and Americans can use their own.
The main thing here is that through automation, more production can be possible with fewer resources with more efficiency.
But it is true that the apparel sector entrepreneurs of our country are still indifferent to automation and they should focus on it.
They should focus on how they will address the challenges of automation, and how to upscale, rescaling their workers.
The fourth Industrial Revolution is not a challenge, it is an opportunity if the challenges are addressed properly.
Moreover, if automation increases unemployment, then we can employ people to produce robots.
It will also help our technology transformation and will also increase the scope of robot export.
In development of ‘Ease of Doing Business’, what change Bangladesh need? What policy support can the government provide? What are the major roles the private sector can play?
The major obstacle to ease of doing business in our country is the power-controlling tendency of government agencies.
If we say that we need a one-stop service, another agency thinks that their power may decline with this. This is actually a big obstacle and we have to come out of this mentality.
There are probably 54 one-stop services available in BIDA, but many people do not know about them properly.
These should be well publicized so that everyone can use these portals efficiently.
What is your strategy for making difficult decisions?
I started my career as a programmer and a programmer makes algorithms, flowcharts, and decision trees before programming.
So, a decision has to be taken in the decision tree based on output, i.e. what kind of output can be produced by doing it.
I think if one can turn his decision-making into such a decision tree then it will be easy for him to take decisions and in most cases, he will take the correct decision. This is my method.