Bangladesh Information and Communication Technology Infrastructure
An EB2000 Brain Storming Session with Prof. Muhammad Yunus
November 8, 1999
Washington DC
Introduction:
The Brain Storming Session was hosted at the Washington, DC premises of the
World Bank. Attendees (complete list is given at the end) included information
and communication technology experts, professionals and entrepreneurs who were
joined by several representatives from the Bank Fund. Dr. Ahmad Ahsan of the
World Bank Group chaired the meeting which began at 5:15PM with the presentation
of a paper titled "Bangladesh's Information and Communication Technology
Infrastructure: First Thoughts on a Road-map" by Dr. Nuim Chowdhury of the
Grameen Bank Group. It was followed by a talk by Dr. Muhammad Yunus, Founder of
Grameen Bank and an open discussion session among those who were present. The
meeting officially ended at 6:45PM. What follows is a recap of some of the main
points discussed in the meeting.
Agenda:
5:15PM - 5:19PM Introduction
5:20PM - 5:44PM Paper Presentation by Dr. Nuim Chowdhury
5:45PM - 5:59PM Talk by Dr. Muhammad Yunus
6:00PM - 6:39PM Discussion
6:40PM - 6:45PM Concluding Remarks
Highlights:
(1) Dr. Nuim Chowdhury summarized his paper, a copy of which is available on
the Internet (http://www.eb2000.org/short_note_7.htm).
He began by discussing the setting in which the issues related to a roadmap
needed to be examined. This included references to how Internet and
Communication Technology (ICT) capability makes a difference in national
competitiveness even in terms of goods production. In discussing the stakes
involved, Dr. Chowdhury cited a study by McKinsey & Company to state that
the upcoming demand for "IT-enabled service" is projected to reach
$180 billion by the year 2010.
Dr. Nuim Chowdhury focused on five critical imperatives for Bangladesh:
I. A National Information Services Infrastructure;
II. Information Technology Skills on a broad base that targets younger
generations;
III. A regulatory environment receptive to changes in technology and demand
conditions;
IV. A business environment; and
V. Enough space for micro-credit.
He spoke at length about different technological options such as the choices
between circuit and packet switching technology, the number of satellite earth
stations needed launching, and the reach and scope of the fiber optic network.
Dr. Chowdhury concluded by reemphasized the urgency of an independent
Telecommunication Regulatory Board if Bangladesh has to "fast forward"
into the information revolution.
(2) Dr. Yunus began his talk by drawing reference to his recently delivered
"Bangladesh 2010" speech. He lamented that Bangladesh was drifting
economically and socially. There was an urgency and opportunity for a collective
upgrade of our lifestyle by rethinking it in terms of the new information
economy. He emphasized that mental preparation was necessary to believe that by
the year 2010 it is indeed possible for Bangladesh to secure at least $5 billion
of the projected $180 billion market for IT-enabled services.
He then moved on to focus on the impediments created by the current
regulatory environment. Drawing from the experiences of Grameen Phone, Dr. Yunus
described how regulatory bottlenecks and contractual barriers were prohibiting
it from utilizing the Fiber-optic network to its true potential. The requirement
to move from cell to cell is deliberately slowing down the pace of growth of the
network, and with it, the rate of poverty alleviation. Despite these
constraints, Grameen Phone was now available in 820 villages.
He took a moment to address the issue raised by Dr. Nuim Chowdhury about the
feasibility of wireless loops as a technological alternative. Dr. Yunus thought
that wireless loops would not be cost-effective for Bangladesh since it will
have to go through land-lines anyway. The cost of wireless loops (8 Taka) will
therefore have to include the cost of land-lines (32 Taka) making the combined
cost much higher. He emphasized that infrastructure needs to be near cost-less,
otherwise all other discussions are moot.
Dr. Yunus mentioned that one of the feedbacks he received in Bangladesh was
that his vision for the year 2010 is not technologically attainable. As such, he
asked the non-resident experts to evaluate his vision and suggest alternatives
about what is attainable by the year 2010.
Dr. Yunus then moved on to describe how the returns from Grameen Phone
exceeded all initial expectations with monthly bills sometime reaching 50,000
Taka. These returns refuted skeptics who doubted the ability of illiterate women
to use such modern technology. Dr. Yunus expressed his faith that when a direct
financial reward is linked with overcoming simple literacy hurdles, people often
respond positively. He proceeded to recount his experience of visiting a group
of grameen phone users and asking them to demonstrate to him their ability to
dial the correct number. After the village woman he asked was able to
demonstrate that she could indeed dial correctly, a second woman came up to him.
She demanded to be given the same test but with a precondition--that she be
blindfolded.
The returns again exceeded initial expectations when Grameen introduced
Internet Kiosk in Modhupur. The initials concerns were over the lack of demand
for emails and the unavailability of Bangla script. The surprising find of the
project was that the demand for email was in fact quite high as many villagers
had relatives abroad. Bangla script was also not a serious impediment because
villagers were pretty comfortable with transliteration. Moreover, there were
spillover benefits. Demands for printing services and training centers for
word-processing went up precipitously.
Banking on such experiences, Dr. Yunus proceeded with his proposal for
creating the International Center for Information technology to Eliminate Global
Poverty. He mentioned his recent letter and his plans of discussing the proposed
center with the President of the World Bank during his current trip. Dr. Yunus
thought that such a center could be built in the virtual space without requiring
much organizational preparation and infratsructural setup. However, the center
should have the overriding intention of bringing the benefits of information
technology in the third world, not only for promoting business interests, but
also for bringing an end to world poverty.
Dr. Yunus concluded his talk with the thought that for Bangladesh to
successfully utilize the global market for Information technology products and
services, it needed partnership with the non-resident community, something that
was instrumental in the success of countries in our neighboring region.
(3) Dr. Shahabuddin Hossain initiated the discussion session by informing the
audience that WorldTel and Telstra were set to provide fixed lines in
Bangladesh. He expressed his concern that without an independent regulatory
board, interest of the people might be compromised. Once there is a second
operator, it will become difficult to regulate BTTB. He raised concern over the
use of copper wires from home to local exchanges and the possibility of using
Trunk Lines. He agreed with Dr. Yunus' assessment of wireless loops as not being
a good option for Bangladesh. Dr. Hossain emphasized that telephone penetration
rates in the traditional sense are not a good indicators because what matters is
access. He alluded to the possibility of learning from the successful
experiences of telecommunication reform in countries like Peru.
Mr. Shahjahan Khan downplayed the technological issues by stressing that a
lot could be accomplished within the current offering. Fiber optics everywhere
is not a necessity and US businesses are managing fine with DSL type
connections. The critical issue is bandwidth. Hence a lot depends on when BTTB
decides to open up to DSL. Mr. Khan thought that, if allowed, independent
providers were ready to offer DSL type services to local commercial and resident
consumers. He concluded by speaking about the need to create an organized group
to lobby the relevant policymakers for the needed reforms.
Agreeing with Mr. Khan, Mr. Abul Barkat mentioned that technologies can
coexist and it is always good to have multiple options. He expressed his
amazement that someone with the international stature of Dr. Yunus was unable to
get a receptive audience in the policymaking arena in Bangladesh. He wanted to
know the names of the policymakers who were not yielding to the demands for
reform.
Mr. Quazi Zaman cited Forbes' writer George Gilder's view that in the future
voice will be through wireless, and data will be through land-lines. He
emphasized the need for a balanced approach and adopting a business plan so that
Bangladesh can fast forward with the proper foresight. He proposed that Grameen
could provide venture capitals to bring in promising entrepreneurs from the
non-resident community and offer scholarships in schools to develop local
talents. Mr. Zaman concluded by identifying the need for making an inventory of
the talents and resources that are available among the non-resident
Bangladeshis.
Mr. Shabbir Parvez replied to Dr. Nuim Chowdhury's question about the need
for launching satellite earth stations by stating that this was not necessary
for Bangladesh but for countries like Indonesia where the landmass are spread
over an extended area.
On the subject of switches, Mr. Akim Alam mentioned that network updates in
the U.S. often creates opportunities for obtaining older generation switching
equipment at lower costs.
Mr. Hafiz Chowdhury commented that the VSAT contracts negotiated with
Singapore was done poorly and are not in the best interest of the consumers in
Bangladesh. He mentioned a proposal by Mr. Tanvir Chowdhury for creating a
ground V-SAT hub station to make it cost-effective for smaller IT companies to
gain fast and affordable Internet connectivity.
Mr. Hafiz Chowdhury also highlighted tax-related difficulties. The government
rules required the deduction of VAT from payments received by banks; however,
the export of services should in principle be exempt from VAT without the need
for any special exemption regime. The current system is based on SROs (Statutory
Regulatory Orders) issued on a case by case basis, which promotes rent-seeking
behavior.
Mr. Anir Chowdhury expressed his concern that the group did not explicitly
discuss the action items necessary to follow-up the brainstorming session. He
argued that the non-residents could in fact do a lot more than lobby. He
mentioned two possible avenues through which non-residents could contribute to
the process. The first was to form a group to craft a telecommunication
blueprint for the country under the imperative of providing "bandwidth at
the right cost". The second was to become active participants in the
proposed International Center for IT to Eliminate Global Poverty.
In his concluding remark, Dr. Yunus responded to some of the comments made
during the discussion. Replying to Mr. Quazi Zaman's suggestion for venture
capitals, he mentioned that Grameen is not in a position to fund expatriate
talents as their funds could only be used by the members of Grameen Fund.
Similarly, in the case of scholarships, Grameen could only make them available
to Grameen families. He mentioned that many qualified families have taken
advantage of the availability of Grameen Funds to finance the engineering
education of their children.
Dr. Yunus agreed with the need for the expatriates to concentrate on
effective lobbying efforts to create social pressures in favor of needed reforms
in the telecommunication sector. He also agreed that the expatriates could be
useful in providing technical advice not only to the policymakers but also to
him personally. He specifically identified the need to speak out against the
introduction of a new technology that could have detrimental effects in
Bangladesh.
The discussion concluded at 6:45PM as Dr. Yunus had to attend another
meeting. Dr. Ahmad Ahsan thanked all those present for participating in a lively
discussion and brought the meeting to a close.
Action Items:
EB2000 is to coordinate with the non-resident experts, entrepreneurs,
professionals in information technology, those interested in the development of
this sector of the economy in Bangladesh, and other Bangladeshi networks to
formulate a plan and schedule of actions in support of the year 2010 objectives.
Attendees (In Alphabetical order by Last Name):
1. Sadiq Ahmed, Ph.D., World Bank
2. Ahmad Ahsan, Ph.D., World Bank
3. Mohammad Ahsan, Dishari Consulting
4. Akim Alam, MCI-Worldcom
5. Al Barkat, Intermax Inc.
6. Anir Chowdhury, Invenio Technologies
7. Hafiz Chowdhury, International Bureau of Fiscal Documentation
8. Nuim Chowdhury, Ph.D., Grameen Bank
9. Mahmud Farooque, George Mason University
10. Barbara Herz, U.S. Department of Treasury
11. Shahabuddin Hossain, Ph.D., International Monetary Fund
12. Shaheen Hossain, o2o Software
13. Aminul Huda, U.S. Department of Labor
14. Abdul Kasim, Sprint Data
15. Shahjahan Khan, Fannie Mae Corporation
16. Amir Mustafa, Rear Admiral, United Enterprise & Company Ltd.
17. Shabbir Parvez, Space Products and Applications
18. Iftekhar Rahman, Ph.D., GTE Laboratories
19. Saifur Rahman, Ph.D., Virginia Tech
20. Iffath Sharif, World Bank
21. Bernard Wasow, Ph.D., Century Foundation
22. Muhammad Yunus, Ph.D., Grameen Bank
23. Quazi Zaman, Microsoft Corporation
Acknowledgment:
I would like to Thank Anir Chowdhury for providing me his notes from the
meeting. I am personally responsible for any unintentional errors and omissions.
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