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Data Localization Will Cost Bangladesh

December 15, 2022

Bangladesh's digital future is at a critical juncture as its draft Data Protection Act includes requirements to compel firms to store data locally – a concept known as data localisation. Localisation would create a lose-lose situation for Bangladesh. It undermines Bangladesh's ability to get the most out of the data and digital tools that drive digital development. New econometric analysis shows that its trade and economy will suffer severely. Localisation also doesn't do the things its supporters say it does in terms of privacy and cybersecurity.

As Nigel Cory writes in the Daily Star, there is still a long way to go, but Bangladesh has made remarkable progress in helping more people and businesses get online and benefit from data, digital technologies, and global connectivity.

Because of this, Bangladeshi policymakers have a lot at stake in enacting data policies. They face one central question: do they follow a smart data governance strategy (that holds firms accountable for following local laws when they move data abroad, a principle most countries embrace) or do they pursue data localisation in a misguided pursuit of digital control and protectionism? Both paths allow for data privacy, cybersecurity, law enforcement, and national security policies, but the latter will be much more costly to the digital economy.

With misguided localisation policies, Bangladesh's early progress and future promise are at risk. What path will Bangladesh's policymakers take as they conduct a final review of the country's Data Protection Act? The path to a false and costly promise of digital protectionism and control? Or will they choose one that's based on targeted and balanced laws that reflect global data-policy norms that keep Bangladesh integrated with the global digital economy? Hopefully, it's the latter.

Read the op-ed.

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