Policy dilemma holds back e-commerce takeoff

The government's lingering hesitancy in the execution of the policy on information and communication technology even six years into its formulation remains the main hurdle to e-commerce, say people in the ICT sector. E-commerce is an internet-based platform used for electronic transactions. The device facilitates anyone's purchase of products or handling of day-to-day transactions for any purpose, sitting in an internet-friendly environment. Since the formulation of the National Information and Communication Technology Policy in 2002, the introduction of e-commerce has been delayed for lack of infrastructure. When neighboring India's e-commerce market crossed over Rs 9,000 crore last fiscal year, Bangladesh is yet to set up the required platform -- certifying authority and electronic payment gateway -- to march forward, the sector people say. Meanwhile, the central bank's policy of not allowing credit cards for online purchase also goes against the concept of e-commerce. However, some sector-based websites on transportation and auction have already developed in Bangladesh. But the limitation in this case is customers' physical presence is required to benefit from the sites.Amir Chowdhury, policy adviser to the Access to Information Programme at the Chief Adviser's Office (CAO), also hinted at a further delay in setting up an electronic payment gateway. "A number of recent meetings between the central bank and different stakeholders, held at the CAO, recommended the establishment of this platform in a span of six months,” he said.
From 2002 to 2006, the year the government passed the Information and Communication technology Act, a considerable number of committees were formed and sessions of talks held to introduce e-commerce, but all efforts were confined to transferring the issue from one government agency to another, industry insiders say. As per the Clause 18 in the ICT law of 2006, it was the government's obligation to form a certifying authority within 90 days after the passage of the law. The main responsibility of this body is to regulate the e-commerce merchants who develop online sites. "The certifying authority has not yet been established, which is required to authenticate digital signatures of online customers and the merchants as well," said Habibullah N Karim, president of Bangladesh Association of Software and Information Services (BASIS). The taskforce committee on internet-banking made recommendations last week to decide on the digital signature for online shopping and other transaction. “We are working on it. A team comprising government and UNDP officials visited Singapore recently to see how it is functioning there,” said Lusa Mirza, consultant, Access to Information Programme of UNDP, which is supporting the government on the issue. Now a team of domestic and foreign consultants is working on to formulate rules and regulations for digital signature, she said, adding that the 1972 Evidence Act might need to be amended. Who should handle electronic payment gateway? The debate on ownership of the gateway also surfaced in the last few months. IT entrepreneurs, and banks both are interested to own the gateway. BRAC Bank has already proposed to the Bangladesh Bank to set up the gateway, but rejection from other banks held back the move, said Access to Information Programme officials.
"The gateway could be established on private ownership or on public private partnership basis," said Shoeb Ahmed Masud, a member of the BASIS executive committee who represented in some committees made for e-commerce execution. Central Depository Bangladesh Limited (CDBL), the operator of central depository system of the capital market, could be an example of setting up such kind of gateway, he said. Experts see a wider business activity on the introduction of e-commerce in the country. "If government introduces e-commerce, its revenue earnings will jump significantly. Any government's levy including income tax, bills and corporate tax could be paid without any hassle," said Masud. The purchase of various things ranging from transportation tickets to anything from mega shops without physical presence is possible by e-commerce, the BASIS official added.

But low internet penetration (below one percent) is another setback to boosting e-commerce. At present, only one million people use the internet in the 150 million populated country. "Internet access costs are still high, which hinder widespread use of online services," said the BASIS president. However, the internet usage is expected to increase, as the telecom regulator has recently taken measures to introduce a range of wireless internet services. Referring to India's tourism market, a web portal developer said: "When India earns more than its expectation from the e-commerce based tourism industry, our government high-ups end up with series of parleys." The size of online travel industry stands at Rs5500 crore at the end of fiscal 2006-07, according to a study by Internet and Mobile Association of India. Kamal S Qaudir, chief executive officer of Cellbazar, the country's largest mobile based e-commerce owner, said: "E-commerce, or to be more precise m-commerce, has more potential in developing countries such as Bangladesh because it brings a new paradigm where none existed before." "Bangladesh cannot afford to delay e-commerce or m-commerce any further (in fact we are quite late as neighbouring countries are far ahead)," he said.