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Digitalisation in Pakistan

by: SPI

 

Overview

The Covid-19 pandemic had a severe impact on countries all around the world - and Pakistan is no exception. Covid-19 was held responsible for a loss of over Rs 3 trillion to the national income in 2020 in the Economic Survey of Pakistan 2019-2020. 

To tackle this issue, Pakistan has established a multi-faceted strategy to address the future economic turbulence. One of the government’s goals is to embrace digitalisation, overcoming Covid-19 while propelling the country to catch up with more developed countries in the region.

High-speed internet access, digital identity frameworks, and multi-sided platforms create a foundation for the pillars of a digital society, including effective digital citizenship, digitally rich lifestyles and digital commerce. Mobile is one of the main aspects of Pakistan’s national development plan and its digital society path, closing connectivity gaps, increasing financial inclusion and sustainably transforming verticals is part of Pakistan’s Fourth Industrial Revolution - “Industry 4.0”. 

Pakistan’s mobile sector is thus a vital contributor to the economy and is redefining the functions and actions of the economy. Pakistan faces a decelerating GDP growth alongside a rising population, and the productivity gains generated by a digital ecosystem will be pivotal to supporting Pakistan’s economy and society.

Pakistan still lags behind regional peers on certain metrics in telecoms. As neighbouring markets accelerate digitalisation programmes, Pakistan aims to exploit its demographic advantages, including a vast and increasingly tech-savvy young population. Pakistan is taking dedicated efforts to achieve economic stability through the Digital Pakistan policy, focusing on implementing transparent government services, digitising industries, empowering demographics and improving the country’s ICT landscape.

 

Who is this document for?

This document provides an overview on Pakistan’s digitalisation innovation and initiatives. This article is mainly aimed at:

  • EU investors who seek to improve their knowledge about digitalisation growth in Pakistan and similar countries; 

  • Policymakers working to improve ICT sectors or digitalisation efforts;

  • SMEs operating or with interest in the digital and innovation sector.

In the subsequent levels, you will get a deeper understanding of Pakistan’s investment in digitalisation.

 

 

Digital Pakistan

Pakistan first implemented a ‘Digital Pakistan Policy’ in 2018, aimed at bolstering the IT industry by building a digital ecosystem. Taking a step forward, Pakistan launched the ‘Digital Pakistan Vision’ in December 2019, which aims to enhance connectivity, improve digital infrastructure, increase investment, and promote innovation and tech entrepreneurship. The Prime Minister appointed a 17-member task force on IT and telecoms to advise on policy changes and develop strategic plans to strengthen the ecosystem. 

The Ministry of Information Technology and Telecommunications (MoITT) is responsible for planning and directing IT programs. The National IT Board (NITB), a department of MoITT is responsible to initiate e-government programmes at federal ministries as part of the Digital Transformation. The government is aiming for a combination of private and public stakeholders, including the IT ministry and NITB to collaborate and align on policy issues. The NITB is working to establish Pakistan’s first e-commerce export platform, to be integrated with payment options including PayPal, Visa, MasterCard, and Alipay, and connected with local banks and microfinance companies.

Digital Pakistan focuses on 5 key areas:

  • Access & Connectivity: low-cost devices, internet access, affordability

  • Digital Infrastructure: digital identity, digital payment, and regulations

  • E-Government: paperless procurement, data sharing, interconnectivity

  • Digital Skills: technical skills, vocational opportunities, digital literacy

  • Innovation & Entrepreneurship: enable start-up ecosystem and ease of business

Pakistan aims to utilize its digital policy to enable growth in the face of the challenges of the digital world. The Digital Policy is expected to increase exports and improve the efficiency of regulations, with e-governance improving citizens’ quality of life and e-commerce enabling the economy to prosper.

Multiple ministries, regulatory bodies and task forces are working to facilitate digital transformation within the country. With over 64% of Pakistan’s population under the age of 30, there is significant potential for successful digital adoption. However, as Pakistan makes efforts to speed up digitalisation, it has started to face regulatory concerns regarding technologies such as cloud computing, data protection and cyber security. Pakistan aims to balance protective regulation with an innovation ecosystem, to make the most of new technologies. The Centre for Economic Research in Pakistan (CERP) Policy Advisory is working with local and international stakeholders to develop a better understanding of the policy and regulatory landscape in Pakistan, and to better advise on high impact policy reforms enabling digital transformation.

The MoITT, in collaboration with Ignite and Virtual University, has implemented the DigiSkills programme to provide training in digital skills. The programme is designed to equip participants with the necessary knowledge, skills, tools and techniques to exploit available opportunities and to enable the digitalisation process. The training services are provided on a user-friendly web portal and a comprehensive Online Learning Management System, where students can register in courses free of cost and learn through online lectures. 

Pakistan also runs the National Cyber Training Programme, which provides training in the area of cybersecurity, offering three internationally-recognized programmes in cybersecurity based on practical experience. The Presidential Initiative for Artificial Intelligence & Computing (PIAIC) is another programme which provides digital training and skills to citizens to revolutionize education, research and business by adopting cutting-edge technologies.

The National Broadband Network Forum was jointly organised in 2021 by the Pakistan Telecommunication Authority (PTA) and Huawei Technologies, bringing together local and international stakeholders to gain insights into transformative technologies and viable solutions to Pakistan’s digital challenges. The government is incentivizing the private sector to enhance broadband capacity and encourage GDP growth. Pakistan Telecommunication Limited (PTCL) and Ufone are looking to expand Pakistan’s broadband to improve its digital economy and overcome business challenges. Pakistan’s IT sector is seen as having great potential for growth in areas such as broadband, cloud computing and data analytics. Pakistan has 107 million broadband and 186 million cellular subscriptions, seeing a 52% increase in broadband data usage in 2020.

 

How European SMEs can be involved in Pakistan’s digitalisation initiatives 

Private firms are exploiting the opportunities in Pakistan’s digital sectors. The country’s largest digital credit provider JazzCash, has expanded and grown its digital payment offering, with 1.7 billion transactions worth Rs 3 trillion, approximately 6.5% equivalent of Pakistan’s GDP, being conducted through the company’s digital platform. JazzCash plans to play a pivotal role in supporting Pakistan’s digital ambitions and aims to grow its user base from 38 million to 100 million in the next five years. 

Overall, Pakistan is on a progressive digitalisation path and has already achieved several milestones. The government has introduced regulatory frameworks for digital payment providers, improving the underlying technological architecture with the introduction of RAAST, and several innovative schemes such as Roshan Digital Account, attracting domestic and foreign users and promoting formal banking in Pakistan. The country has also established various catalysts for digital growth and is now geared for investments and international partnerships as it improves digital literacy across the country.

Investing in Pakistan’s digital economy can provide significant dividends, with opportunities to focus on the unbanked and young population, providing a foundation for European SMEs to develop and implement efficient digital businesses.

 

Sources

Last updated: 27.05.2022 - 09:11
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