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Please don’t drive way FDI
Published Time: May 4, 2019, 12:05 am
Updated Time: May 3, 2019 at 9:00 pm

M S Siddiqui writes for DOT

The overseas direct investment in Bangladesh has been reduced to Tk 225 crs in 2017 from Tk233 crs in
2016. But the ODI in e-commerce is remarkable. Again the Asia is the most promising market for e-
commerce. By 2018, they estimated that 42% of global online buyers will come from Asia and Oceania,
which was only around 15% in 2013. Bangladesh can get ready with technology and investment backed
by ICT educated young generation to take the benefit from the emerging Asian market. But Bangladesh
government drafted an IT investment policy to restrict overseas share to 49%. Is not it suicidal?
Bangladesh is on her quest to fast becoming a digital nation. The ‘Vision 2021’ aims at developing
Bangladesh into a resourceful and modern and digital economy through efficient use of information and
communication technology (ICT). It is very much in line with global shifting towards digital economy will
keep continuing according to the emarketer.com. E-commerce retail sales worldwide will be 2.5 Trillion
USD by the year 2018.The era of ICT technology have consequence of development of e-commerce. E-
commerce in Bangladesh is in nascent condition and is presumed around tk 2000 crore in 2016-2017
fiscal years and created employment of 50000 people. According to a study, Bangladesh will experience
around 72% growth a year in the e-commerce industry in the coming years.
Since Bangladesh entrepreneurs are at start-up stage. They have technical and financial difficulties.
Banking sector is not ready to finance such sector. Generally banking sector is reluctant to provide
finance to companies with less than 3 to 5 years experiences backed up by physical asset. E-commerce
companies are unique in this nature and they need finance in starting years of the initiatives and all most
all the assets are logical or intellectual assets.
Another challenge is ever fast changing technology and environment. IT demands to understand market
variables, market changing components, technology feasibility, product feasibility, sector wise growth,
exploring market opportunities and threats, create market analytics etc. Bangladesh needs continuous
research and development to cope with fast change technology and market culture. To promote and
continuous develop; a national e-commerce research center is a must.
It has been reported that at least 150 start-up businesses in Bangladesh that are vying to receive
investment required for expansion of business and acquiring technology despite having formidable goods
and services to offer in the local and overseas market. The technology transfer is possible through joint
venture and entry of e-commerce companies from other countries. Bangladesh’s IT sector is increasingly
becoming an attraction for global companies.
Recently, there is some encouraging news of overseas investment. bKash is presently valued at $640
million with overseas investment from Motion LLC, International Finance Corporation, and Bill & Melinda
Gates Foundation. It is the leading mobile financial services (MFS) provider of the country, and Ant
Financial Services Group, operator of China-based Alipay, announced a strategic partnership on April 26.
In less than three years since its inception, shares of bKash were bought by World Bank’s financial
concern IFC and American private organization Bill & Melinda Gates Foundation in 2013 and 2014
respectively. Alipay have purchased of 20 per cent of bKash’s stakes by the latter thus increasing
bKash’s financial and technological capabilities.Alipay is the online payment platform of Alibaba Group.
After overtaking PayPal as the world’s largest mobile payment platform in 2013, Alipay had more than 54
per cent share of China’s US $ 5.5 trillion mobile payment market by the fourth quarter of 2016.
Another motorbike-taxi ridesharing entity Pathao announced that it raised a “pre-series B” investment, a
round of capital venture financing, led by the $4.5 billion-valued Indonesian ridesharing start-up Go-Jek.
According to technological news journal TechCrunch, this investment may be more than US$ 10 million.
Earlier, Go-Jek had invested $2.0 million in Pathao’s “Series A” investment in 2017. Ant Financial and
Go-Jek have studied the potential of the two Bangladeshi companies before taking the decision of
investing in them. The new investor is leading this deal along with participation from existing backers
Openspace Ventures, Osiris Group and Battery Road Digital Holdings.
Bdjobs.com, the country’s leading online employment marketplace, has sold its 25 percent stake to the
Australian number one job portal, SEEK International, at Tk 38.5 crore. Bdjobs has 90 percent market
share in Bangladesh. SEEK is operating in twelve countries including Australia, New Zealand, China,
Brazil, Mexico, West Africa, Nigeria, Hong Kong, Indonesia, the Philippines, Singapore and Thailand.
Daraz, founded in 2012, was purchased from Rocket Internet, a Berlin-based incubator of online
startups.Its key markets are Pakistan, Bangladesh, Sri Lanka, Myanmar and Nepal, claiming 30,000
sellers and 500 brands on its platform, according to a statement by Alibaba.Products available on Daraz
include consumer electronics, household goods, beauty, fashion, sports equipment and groceries, a
report said.
The remarkable investment start in last year. The global IT firm Accenture bought 51 percent stake in
GPIT, an IT wing of the country’s top mobile operator Grameenphone, at $10 million. There are some
more investment by large foreign companies like Carmudi, foodpanda and Kaymu. “Carmudi, foodpanda
and Kaymu are portfolio companies of Europe’s largest technology firm.
The recent overseas investment in existing companies such as Daraz, Pathao, bdjobs, bKash and Pathao
should give confidence to local investors, government and financial institutions to encourage start-ups in
the country, Time has come for us to change the traditional mindset towards small and start-up business
ventures.
The decision of government to restrict overseas investment in IT sector is against declared policy of FDI
and should not restrict overseas investment in IT sector. This will give a wrong message to overseas
investors.
The writer is a Legal Economist. E-mail: mssiddiqui2035@gmail.com