Making laptops in Pakistan
If recent news reports are to be believed, Pakistan is on its way to establish a laptop assembly facility. Reportedly, the Higher Education Commission (HEC) is leading this project, which is currently in its inception and will likely feed the academic demand rather than commercial demand.
HEC has been made in charge of the Prime Minister’s Youth Laptop Scheme, which was announced in the Federal Budget to reward meritorious students enrolled in HEC-recognized universities or institutions. This established demand of laptops—in hundreds of thousands, and arising every year—can motivate global manufacturers, whom HEC will be approaching in due course to bid for this opportunity.
Though belated, this initiative of laptop assembly in Pakistan is much welcome. Pakistan’s comparative advantages seem suited to assembling a computing device, if not manufacturing its components. But this case is not without constraints. For domestic production to be feasible, the devices must cost less to the government than imported ones of similar specifications and quality.
One understands that the proposed facility will supply to the government-funded scheme. But the government should also allow the assembler to produce commercially. A success story in this area will likely prove helpful in attracting FDI in the telecom equipment production, and along with it create employment for skilled labour and induce technology transfer for local businesses.
That is important because Pakistan, despite being a telecom dense country, has had no success in attracting global (or regional, even) cellphone manufacturers to set up a factory here. Data from the Pakistan Bureau of Statistics highlights that the country imported nearly $1.5 billion worth of telecom equipment in FY13, 40 percent of which were imported mobile handsets.
Some manufacturing activity is happening in Pakistan, albeit on a limited scale. Since 2011, Pakistan Aeronautical Complex (PAC) and the Hong Kong-based Innavtek International have been co-producing tablets, eBooks, and notebooks at the PAC’s Avionics Production Factory in Kamra, district Attock. The joint-venture’s flagship product, Takhti 7 (a tablet PC), sells for under Rs15,000 per unit, but it hasn’t made waves due to lack of marketing.
There is already pent-up demand for high quality data services in Pakistan. When the 3G technology is rolled out in the near future, more foreign exchange will be spent on importing a large number of high-end smart phones. A well-functioning laptop assembly plant will likely create a demonstration effect for smart phone manufacturers to enter the Pakistani market and cater to a 125+ million strong cellular user base.