Amidst the fourth industrial revolution, the world has become digitally interconnected and the lives of people have eased owing to the digital revolution that was witnessed at the turn of the century. The global shift and smooth adoption of digital solutions have triggered a transformation in all segments of the economy as the financial sector, entertainment industry, retail and other segments are all dependent on it.
While this has given people access to wider range of options for almost everything, the digital revolution also poses a threat as it can be used as a weapon as well. Just like the Organisation of Petroleum Exporting Countries (OPEC) used oil as a weapon during the Yom Kippur war and suspended its supply to Western nations, global technology giants are weaponising technology to mount pressure on Russia to call off its war in Ukraine.
Within days of Russia’s invasion of Ukraine, which according to Kremlin was a military operation in its neighbouring country, multiple technology giants announced suspension of services in Russia in order to pressurise Moscow to withdraw its forces in Ukraine. This is a prime example of how technology can be used as tactics in the modern world.
Prominent tech companies that pulled out of Russia include PayPal, Visa, Mastercard, Swift, Uber, Bolt, PayPal, Airbnb and Apple.
Russia is the world’s 10th largest country and its relatively large population (145 million) is highly dependent on foreign tech solutions for their daily needs.
Following the suspension of international tech platforms, the payments, logistics, movement and lodging for an average Russian has became much more different. An ordinary Russian citizen residing in the country cannot even withdraw money from the ATM because the two leading payment solution providers, Visa and Mastercard, no longer conduct business in the country.
Immediately after the two companies suspended their services, Russian citizens struggled to arrange cash for their daily needs. Suspension of the two platforms meant that all bank cards and payments through them were impossible. Even Russians in foreign countries were unable to carry out transactions with Visa and Mastercard products issued by Russian banks.
Similarly, a Russian citizen now has to rely on local cab services as Uber and Bolt have too closed their doors. That gap is now being filled by China’s Didi which continues to operate in the country as well as Russia’s homegrown ride hailing platform Yandex Taxi.
Moreover, major banks of Russia were severed from using Society for Worldwide Interbank Financial Telecommunication (SWIFT) system which is a messaging system for banks to communicate payment instructions with each other. Talking about digital communication, WhatsApp and Telegram are the only two applications that work in Russia. The rest have pulled out.
While these measures have not discouraged Vladimir Putin to expand his “military operation,” it has severely struck common Russians. These measures have triggered an immediate liquidity crisis in the economy and people have struggled to arrange cash to pay bills and buy essential commodities.
At the same time, freelancers have been unable to withdraw their earnings or secure new work because all transactions with Russian bank accounts from overseas have been banned. They have been cut off from access to their money, threatening their livelihoods as well.
At the same time, YouTube suspended payments to Russian content creators and ended advertisements throughout the country. This placed a lot of freelance jobs in jeopardy.
This episode sends alarm bells for import-dependent economies like Pakistan and can act as a case study for the nation.
With a population of over 220 million, Pakistan is heavily dependent on imports to an extent that the government has recently banned inward shipments of non-essential products to support foreign exchange reserves and contain the current account deficit.
Its dependence on foreign tech is even higher as many businesses operate on WhatsApp, Instagram and Facebook while payments are received through Mastercard and Visa respectively. Moreover, the ride hailing industry is also dominated by foreign companies along with PayPal which is a long standing demand of youth and expatriates in Pakistan.
For payments, Pakistan is majorly dependent on Visa, Mastercard and 1LINK. Similarly, the ride-hailing ecosystem is dominated by Careem and Uber. The prime platforms for content creators are YouTube, Facebook, TikTok and Instagram. It is not difficult to deduce that two of these four companies belong to the same big tech that mounted pressure on Russia to withdraw forces from Ukraine.
Our food delivery industry is dominated by Foodpanda and Careem - both international firms.
Now let’s take a look at neighbouring India. Indian tech experts and developers created a platform to rival Paypal and gave it such stiff competition that it had to stop domestic payments in the country in order to curb losses. On the payments front, India has Rupay to oppose services like Mastercard and Visa.
Similarly, New Delhi counters the dominance of international food delivery platforms through its local Zomato and Swiggy while ride-hailing space is has a local alternate Ola.
Similarly, China has WeChat (social media), Didi (Ride-hailing), Alibaba (e-commerce), JD.com (e-retail), Unionpay (payment), baidu (internet), Huawei (mobile phones), tencent (fintech) and Meituan Waimai (food delivery) to counter foreign dominance in the tech space.
Therefore in an event when the weaponisation of tech takes place on India or China, they are likely to emerge stronger from them as opposed to Pakistan that doesn’t have local alternates of leading tech platforms.
Pakistan is expected to struggle the day tech is weaponised against it.
As a matter of fact, Pakistani tech entrepreneurs are focusing on e-commerce and q-commerce. Now that space seems to have taken off hence, competition is massive. It is essential for Pakistan to focus on creating local alternates to international tech services so that they cannot be weaponised against it.
Dependence on foreign tech companies can also be considered a sign of strategic weakness and there is a need to quickly work on a plan to promoting local champions as de-facto alternatives.
The weaponisation of tech is a massive threat to sovereignty and leaders should focus on combating it.
The article does not necessarily reflect the opinion of Business Recorder or its owners