Bangladesh e-commerce creates opportunity for developing economies: report

GENEVA, Switzerland, September 13, 2024 (BSS) — Bangladesh has shown promising growth in the information technology (IT) sector, especially in the development of software and IT-enabled services, said the global Digital Trade for Development report.

The report, prepared by a team of the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD), the World Bank and the World Trade Organisation (WTO), shows that the introduction of e-commerce in Bangladesh, especially business-to-business (B2B) e-commerce in the ready-made garments industry, creates an opportunity for trade growth in developing countries.

According to the report, digital technologies have the potential to improve e-commerce in least developed countries (LDCs) by connecting distant economies to global markets.

For digitalization to be more inclusive, it is important to enable economies that are lagging behind in digital readiness to catch up.

By addressing transport infrastructure and connectivity issues, developing digital skills and strengthening regulatory frameworks, least developed countries will be better prepared to benefit from the vast e-commerce network, expanding their market reach and boosting economic growth.

However, it was mentioned that the export opportunities of digitally delivered products can be better exploited by economies traditionally on the margins of global trade.

Although distance continues to be a significant factor in the overall costs of trade, digital technologies are reducing the relative importance of some factors of comparative advantage, such as geographic distance from markets and the quality of transport infrastructure.

Trade in digitally delivered products such as e-books, music and computer software could thrive with better internet access, supportive regulations and a digital payments infrastructure.

According to the report, some traditional factors of comparative advantage in trade may lose importance in the digital sphere.

While capital investment and labor costs are important in digital trading, their importance (at least for certain types of skills) is somewhat reduced compared to offline trading.

The report shows that some economies are better prepared to seize the opportunities and address the challenges of digital trade, highlighting the importance of digital infrastructure and digital skills.

Generally speaking, to participate in and benefit from digital commerce, consumers and businesses must have access to fast, affordable and reliable digital infrastructure, as well as the skills and opportunities to use digital technologies for productive activities.

High tariffs on imports of information and communications technology (ICT) equipment, restrictions on imports of supporting services and limited competition in the telecommunications services market can limit the availability of these technologies and slow down their implementation.