Digital Bangladesh

Posted in development, economics, labour, macro, micro by jrahman on April 24, 2012

Before it became a political slogan, and well before it became a caustic remark about Bangladesh’s flailing government, there was something genuine about the idea of ‘Digital Bangladesh’ — the idea that information and communication technologies could significantly affect social, economic, and political realities of Bangladesh in a positive direction.  As Rumi Ahmed wrote in February 2009:

A new generation of entrepreneurs, engineers and IT professionals made Bangladesh digital without much government help or vision. These folks can take our country farther than anyone can dream of.

And Roger Strukhoff (a technology writer) shows why Bangladesh is particularly well placed to benefit from the still evolving ICT revolution.

In 2010, Strukhoff created the Tau index, which measures ICT uptake.  The simplest measure of this is the dollar amount spent on ICT.  Strukhoff adjusts this basic measure to take into account two things: cost of living, and inequality.

The cost of living matters because:

Information technology costs the same amount of money everywhere. So, in a country with a relatively low cost of living for things other than IT (such as Bangladesh, Mexico, Senegal, etc.), the impact of IT will be relatively greater than in a country with a high cost of living (such as the US and Canada Germany and France, Japan, etc.).

And inequality matters because:

Countries in which income is more evenly distributed (such as Sweden or South Korea) should be able to make better, more widespread use of IT than countries in which income is less evenly distributed (such as Brazil or South Africa).

When he crunches the numbers, Bangladesh is literally ‘off the chart’:

Bangladesh is the world’s true phenom. Its Tau Index is off the chart, literally. I had designed a place called “Perfect Land,” that had a high income, moderate cost of living, abundant IT expenditures, and great income distribution. I figured nobody could beat Perfect Land, but Bangladesh soared more than 40% above it. I had seen in some recent presentations at conferences that there was something stirring in Bangladesh. The Tau Index reflects that. I am working to follow up with some folks in that country to see what’s going on. Bangladesh spends 9.2% of its GDP on IT, or 23.8% on an adjusted basis. It has a low cost of living and a strongly equitable distribution of income.

So, why does Bangladesh do so well?  Look at the last sentence for a clue.

I was surprised to discover last year that Bangladesh is not a particularly unequal place.  But if we take that data at face value — and I see no reason to think that the statisticians are grossly, fundamentally getting Bangladesh wrong — then Strukhoff’s finding shouldn’t come as a surprise.

(Acknowledgment: Asif Saleh for the link to Tau Index).


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