The recent connectivity blackouts are only a reflection of the fact that the government still fails to understand the IT sector’s importance.
Pakistan’s digital lag in global indices paints a dismal picture of the country’s ability to harness opportunities in the global IT economy.
This lag is concerning, especially considering the country’s young population. Emerging economies such as Bangladesh, India, and Indonesia, the new frontiers of technology adoption, are outpacing Pakistan. Meanwhile, the most innovative economies like Singapore, Estonia, and the UAE lead the glittering ranks for frontier thinking and adoption.
For the country to tap and optimize opportunities in the global digital space, it is critical for Pakistan to consider adopting a “digital first” approach. Pakistan has made some strides in developing digital and IT skills, supporting tech start-ups, and expanding IT and related service exports. However, the lack of a comprehensive digital agenda and governance structure fragmentation hinders progress toward achieving meaningful and sustainable development in the sector.
Pakistan’s digital and IT exports must no longer rely heavily on low-value exports and freelancing but develop strategic initiatives with robust support from all stakeholders, including political leaders, technical experts, civil society, and the people of Pakistan.
The IT ministry aimed for the country’s IT exports to reach $5 billion for FY23. However, the current run rate for the fiscal year monthly averages of $215 million indicates a missed target by a significant margin.
Furthermore, there are bureaucratic hurdles that the IT services exporters face such as the free flow of dollars. Officially, the State Bank of Pakistan (SBP) only allows approximately 35 percent currency retention from exports.
However, retention is much less due to the red tape involved. Forex retention is crucial for these businesses as they incur specific expenses which involve business development in dollars. Restrictions on free-flowing currency limit their ability to react dynamically to changing market conditions, thereby exacerbating Pakistan’s IT sector’s issues.
Adding to these concerns, a recent internet connectivity blackout across Pakistan’s major cities has further worsened the situation. The suspension of mobile broadband services by the Pakistan Telecommunication Authority (PTA) at the Interior Ministry’s direction has caused operational issues for firms operating in the sector, and many businesses remained closed. The suspension of internet services has affected the IT freelance industry, losing millions of rupees every day.
To maintain the industry’s growth and potential, the government must address these concerns. Officials have given assurances of incorporating industry proposals into the budget. However, the outcome has not gone down well within the industry. It leads to the question of whether the government understands the industry, or it is so obsessed with other export sectors like textiles that IT is lost in the background.
Pakistan needs a robust and well-defined roadmap that is committed by all stakeholders to address these issues and optimize the country’s digital-driven growth. This requires a strategic long-term view of the country’s economic potential, which should be articulated through a vision articulated in a roadmap outlining achievable objectives. The roadmap should focus on improving access and connectivity, enhancing digital skills, developing a well-defined digital agenda, and strengthening governance. This would require the establishment of a centralized body to champion and coordinate the country’s digital efforts.
Moreover, the roadmap should promote the diversification of digital exports, including IT goods, and explore areas like e-commerce, fintech, and digital health. This will enable Pakistan to realize the full potential of its young and tech-savvy population and position itself as a leader in the global digital economy.
In conclusion, Pakistan must prioritize the development of its IT industry as it can significantly contribute to the country’s economy and help it compete globally. However, achieving this requires the commitment of all stakeholders and government-led efforts aimed at understanding the industry’s nuances.
The creation of policies that incentivize investment and promote growth is essential in attracting international investors and promoting domestic growth in the sector. It is imperative to emphasize that a comprehensive digital agenda promoting governance and enhancing investment in the sector can help Pakistan to mitigate its digital lag and compete globally.
Source: Pro Pakistani