The Future Of Digitalization In Pakistan

It has been widely regarded that the future of IT sector in the country runs on digitalization and recent progress of the sector, in collaboration with the government policies, seem to only benefit the future of the industry

IT has been known as the future of the country and no year has showcased that more than in 2019.With the world moving towards a digital sphere, Pakistan has gone through great lengths in this cause. The biggest example was in 2018 elections when the decided factor for the winning party was the use of digital engagement with the voters and various internet-based polls were conduct, alongside allowing overseas Pakistanis to be able to vote the Election Commissions of Pakistan’s voting portal. This showcases the reach that the digital age can have in the matters of the country.

Another step in the direction has been soon through the launch of e-Court system that allow video-link connectivity for judges when hearing cases. In 2018, Pakistan approved the first ever Digital Pakistan Policy to transform the IT and other sectors of economy for an enhanced economic growth through digitalisation. The IT industry is already playing a big part in the economy and is in the top 5 net exporters of the country with a reported FDI inflow in the ICT sector for the period July 2018-January 2019 being $114.4 million.

This sector has seen tremendous success through a flourishing e-commerce, fintech, and e-governance systems which is backed by a significant policy intervention and investments made in the industry.This included the government establishing a 17-member task force on IT and telecommunications with a team of prominent members of the tech sector to advise policy changes and develop strategic plans. However, the progress has not been as fast as what it might seem as cyber crimes have remained to be a prevalent concern in the country and data protection has been slowed down. Pakistan currently ranks 7th with having the worst cyber security.

Another setback includes the low contribution of the mobile market in the country’s economy and needs some serious improvement as a low percentage of individuals in the country use mobile phones. Tax reforms can be used as a medium to make the Pakistani mobile sector gain more investment and provide benefit to consumers. Conversely, Pakistan does boast one of the cheapest mobile data packages in the world, as referenced by Google. The provincial government have planned to expand the 19.5 per cent sales tax on internet and broadband services to lower tier packages. However, it does concern users how the recent tax charges can increase the cost of a mobile phone in the Pakistani market.

Since the focus of the IT sector has been to promote the digital infrastructure as foreign investment has been used to focus on internet expansion which was seen to launch online banking as the SBP issued branchless banking regulations in 2008, making Pakistan the first country in South Asia to have allowed branchless banking. Currently, similar to the mobile phone prices, the telecom sector is a victim to high taxation and is estimated by the PTA to be around 53 per cent of every Rs1 sold with 17-19.5pc on voice services, and 19.5pc on mobile and fixed-line connections.

At the World Economic Forum in 2017, Ebay’s chief executive, Devin Wenig, highlighted Pakistan as one of the fastest growing e-commerce markets in the world. The total value of e-commerce is estimated to cross the $10 billion mark by 2020. This highlights the pace of increase in e-commerce adoption in Pakistan and shows a promising rate. It is imperative for the government to prioritize the technology sector considering its long-term growth and focus towards digital empowerment.