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Strengthening digital economy is the way to go
China and South Korea were the early frontlines in our pitched battle against Covid-19. Both countries had taken the hardest hit during the initial phase of the outbreak, but both were quick to rebound from the initial shock of it and soon cornered the mortal enemy with the swift stroke of their digital weapons.
With a strong technological backbone, they have been able to contain the Covid-19 outbreak efficiently. And the same resilient digital infrastructure has aided these two countries in their attempts to cushion their economies from the aftershocks of the pandemic.
For one, the faster they contained the outbreak, the sooner they were able to get their economics back on track towards recovery. While most countries are still under lockdown, China and South Korea are opening up their economic activities and would likely lead the rest of the world in their attempts to revive their economies once they have overcome the initial shock of Covid-19.
China, a nation whose path to ecommerce had been paved in 2003 by the SARS outbreak, as suggested by World Economic Forum, was well-equipped to fight the economic challenges posed by the Covid-19 lockdown. While the SARS outbreak triggered a shift in consumer behaviour—more online shopping, increased digital payments—China’s already flourishing ecommerce platforms were better able to align their supply chain logistics to serve the needs and demands of the consumers holed up in their homes.
According to a WEF report, “since the outbreak of Covid-19, the new infrastructure has played a critical role in China’s overall economy. Retail platforms based on a solid supply chain ensure that the supply of products accurately matches people’s needs. Dependable and fast delivery helps guarantee the stability of tens of millions of families.”
And China was quick to embrace further innovations that not only helped the wheels of the economy turn by facilitating commerce, but also assisted in enforcing social distancing: non-contact services and AI robots for delivery.
In late January, one of China’s largest providers of delivery services for food, consumer products and retail services—Meituan—launched a non-contact delivery service where parcels could be delivered to customers while strictly maintaining social distancing rules. Soon, in many parts of China, AI robots were used for package delivery services, security services, disinfection services and so on, putting fewer lives at risk, while at the same time going about addressing the most pressing needs of the people and the time.
All these have been enabled by the political will of the Chinese policymakers and private-sector leaders in strengthening their digital economy through investing in advanced and resilient digital infrastructure.
The country, however, did suffer from economic shocks, with its GDP contracting by 6.8 percent year-on-year during the first quarter of the year. But with faster suppression of the Covid-19 outbreak with the aid of its cutting-edge digital innovations, it is now able to accelerate its economic activities again.
For countries such as Bangladesh, who have already invested in digital technologies and have the basic digital infrastructure in place—4G internet, ICT substructure, a flourishing ecommerce industry, multiple digital payments platforms, etc.—they can now consider working on these foundations to gear up their economic activities in the medium to long run to achieve their economic ambitions.
Consumer behaviour is undergoing a shift in Bangladesh in response to the pandemic. According to E-Commerce Association of Bangladesh (E-CAB), nearly 100 ecommerce operations dealing mostly in healthcare supplies, groceries, and essential commodities have witnessed a rise in demand, as more consumers, who had previously not considered online purchase, had to opt for it during the shutdown.
But with increased ecommerce and digital payments demands, the regulators, industry leaders and business owners have to work together to ensure an environment in which the trust that consumers place in ecommerce businesses, digital payments platforms and smart suppliers is not shaken. All the stakeholders in this ecosystem need to work together to make sure that the system becomes sustainable in the long run. For this to happen, the retail supply chains have to be made smart, digital logistics need to be further strengthened, and the political will of all concerned needs to be demonstrated though meaningful action.
With Covid-19 continuing to wreak havoc worldwide, economies will suffer tremendously—there is no way out of it. And countries such as Bangladesh whose economy is heavily dependent on exports earnings will have additional obstacles to overcome in the next few months, due to the declining global demands for apparel. Moreover, with the global oil prices plummeting, the fate of the Bangladeshi migrant workers—whose remittance keeps its forex reserve strong—looks pretty uncertain right now. This will be an added burden on Bangladesh going forward.
But with strategic investments in strengthening digital economy, the country can bolster domestic demands and keep the wheels of the economy turning faster.
But exactly how fast the country’s economy can and will recover is up to the policymakers, regulators and industry leaders. What is needed is an open-minded approach to embrace digital innovation and transformation. This is one challenging goal, but it is achievable. We can look to countries that are on the road to economic revival and take the cue from them.
Tasneem Tayeb is a columnist for The Daily Star . Her Twitter handle is: @TayebTasneem