Hi-tech park to accelerate digital economy

The much-sought-after deal on building a hi-tech park in Kaliakoir was signed in the city last week. As per the agreement, Summit Technopolis, a joint venture between local Summit Group and India's Infinity, will construct and develop two of the five blocks of the 232-acre park.
Summit Technopolis will invest $114.56 million for block-2 and $93.03 million for block-5. The company will have to start construction of the physical infrastructure of the two blocks within three months and complete the whole development work within 10 years, according to the deal.
The agreement stipulates that the developers would have to start handing over a part of their physical infrastructure within the next two years so that they can be leased out to ICT (information and communications technology) companies.
The government expects that the hi-tech park would change the economy of the country. It will create 60,000 new jobs in ten years. The project is as part of the government's efforts to move the country towards a digital economy.
Initiated in 1999 by the Awami League government, the hi-tech park project was not continued by the subsequent government. The project got a fresh lease of life in 2009, when the party returned to power.
Reports say a number of big multinational companies are keen to invest in the two blocks. International companies such as General Motors and Siemens are in touch with the company that had won the contract.
The government has taken a number of other initiatives such as the Jessore Software Technology Park, Mohakhali information technology (IT) Village in Dhaka, Sylhet Electronic City, Barendra Silicon City in Rajshahi and Natore Freelancer Institute. In this context, it has taken up a dual strategy to attract investments through foreign direct investment and provide state-of-the-art facilities to the Bangladesh-based industries.
The information and communication technology ministry recommended for an incentive package including tax holiday for 10 years for the developers and investors in the technology and software parks in the country. The incentive package was finalised analysing tax incentives given by different countries including India, China and Japan. Opinion of local stakeholders was also taken into consideration. A set of 20 types of benefits mostly related to income tax, value-added tax and customs duties will be offered to the developers, property management firms and investors in the parks.
According to the incentive package, investors, including the developers and property management firms, will be offered 100 per cent corporate tax exemption on their income for 10 years from the date of commercial operations. Individual investors will also be offered 50 per cent tax exemption for next five years after the first phase of 10 years. Investors in the rural areas or targeted underprivileged population will get tax holiday for 12 years.
Investors are likely to be provided full exemption from paying VAT for 10 years on purchase of different raw materials, equipment, construction and services, sales and electricity uses. Individual investors will be allowed duty-free import of software and hardware for operational use up to a maximum $1.25 million per unit. Equipment can also be imported on loan or lease basis without customs duty.
The government has set a target to generate employment for one million people in the IT and IT-enabled services sector by 2021 and to achieve the target investments from domestic and foreign sources are needed. Without offering a competitive incentive package, it will not be possible to attract investments, particularly from foreign investors, in the IT parks.
The government claims that its biggest achievement is that it had created a generation mentally ready and fit for adopting any technological challenge. It has targeted the educational institutions first with the idea of turning regular classrooms into multimedia classrooms.
At a recent meeting, Prime Minister Sheikh Hasina said the government will set up high-tech parks in every district in phases for flourishing information technology at every corner of the country. She said the government wanted to ensure widespread use of information technology for industry, health, employment generation, poverty alleviation and economic development as well as people's empowerment through building a digital Bangladesh.
She underscored the need for joint efforts of government and private sector to achieve the target of exporting software and IT services worth US$ 5.0 billion to 50 countries by 2021 from existing US$ 100 million.
The government is reported to be running a country-wide programme to train youths to get jobs all over the world. Officially called Learning and Earning Development Project, it focuses mainly on college and university students. Under this project, the ministry is training the youth about the ins and outs of outsourcing jobs.
In the first phase it has trained 15,000 youngsters in district level. In 2012, these trained youngsters have earned US$ 20 million by working in different kinds of outsourcing projects and in the following year, the earnings increased up to $50 million.
One of the significant additions to this project is a programme for women that enable them to get outsourcing jobs. Titled "Bari Boshe Borolok", it trains young women of different districts and upazilas in skills needed for   outsourcing.
Rapid development in the ICT sector reflects a rapid growth of the country's skilled manpower which ultimately accelerates economic growth. If all goes well, it is expected that within a few years, the ICT sector will be the largest revenue earner for Bangladesh.
szkhan@dhaka.net