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ISLAMABAD: The World Bank’s Board of Executive Directors will consider the “Pakistan: Digital Economy Enhancement Project” worth $78 million next month. The project aims at enhancing the government’s capacity for digitally-enabled public services delivery for citizens and businesses.

The project documents revealed a holistic approach to digital government services is largely missed. Despite the policy instruments available at the federal and provincial levels, the responsible institutions lack implementation support causing missed opportunities across various subsectors.

Despite the presence of relatively strong national ID and payment systems the lack of interoperability frameworks and mechanisms has limited the capacity of the government (as well as non-government actors) to exchange data securely and seamlessly.

The proposed outcome indicators for the project are transactions on the National Data Exchange Layer (Number), unique users on the National Citizen Services Portal (of which are female initiated) (Number and percentage), Registration, Licenses, Certificates, and Other (RLCOs) transaction processed on the Pakistan Business Portal (of which processed for female-led small and medium enterprises) (Number and percentage) and users satisfied with services offered by the National Citizen Services Portal (percentage).

World Bank projects 2pc growth

The project documents revealed Pakistan has experienced frequent macroeconomic crises due to a growth model based on private and government consumption, with productivity-enhancing investment and exports contributing relatively limited gains. Growth of per capita gross domestic product (GDP) has been low, averaging under two percent in the last two decades. Recent unprecedented floods are likely to have serious impacts on poverty, human development outcomes, and economic growth.

It further noted that Pakistan has started its digital transformation. Internet access, particularly mobile, and demand for digital services have been increasing, notably during the pandemic. However, Pakistan lags on most digital development rankings relative to regional comparators, notably on digital infrastructure (connectivity), digital government, and the enabling environment for the digital economy.

Pakistan demonstrated recent bright spots in digital government services - such as the successful use of digital technologies to rapidly deploy the Emergency Cash Program to mitigate the socioeconomic effects of the pandemic, demonstrating the power of the national identity (ID) system managed by NADRA and socioeconomic data in the National Socio-Economic Registry (NSER). Pakistan’s Instant payment system (RAAST) also offers new possibilities for digital government-to-persons payments.

Furthermore, nearly four million citizens have been using the Pakistan Citizen’s Portal, a smartphone application that promotes citizen-centric participatory governance and serves as a nationwide grievance redressal system. These initiatives are demonstrating the potential of offering broader digital government and private services. However, a holistic approach to digital government services is largely missed.

The policy and regulatory environment in Pakistan require improvement in the form of revisions, implementation support and better coordination between the regional and federal governments. The state governments’ digital policies hinge on four key points including improving connectivity, digital government services, literacy, and economy. In support of specific sectoral needs such as cloud computing and right-of-way requirements of the telecom operators, the federal government has approved the Pakistan Cloud First Policy (2022) and Public and Private Right of Way Policy Directive (2020). A data protection bill has been drafted and issued for initial consultations, but further work is needed to align the bill with global best practices and to ensure that the domestic data economy is not unduly restricted. However, despite the policy instruments available at the federal and provincial levels, the responsible institutions lack implementation support causing missed opportunities across various subsectors.

Despite an efficient regulator and an open licensing regime, the country is facing many forms of digital divides—in terms of access to connectivity, economic opportunities, and digital skills. There are 194 million cellular mobile subscribers and 124 million internet users. However, the vast majority relies on 3G/4G connections for using the internet and fixed broadband penetration is only at about two per cent of households, limiting data-intensive business and service delivery opportunities. Investments in fixed-line broadband are expected to continue at a slow pace only in affluent localities, which will further exacerbate geographic inequalities. Infrastructure sharing is limited, which results in higher capital and operating costs, further limiting network expansion. Foreign direct investment in the sector—which for nearly two decades was one of the bright spots in the economy—has also declined in the previous four years. Overlapping jurisdictions and disparate planning requirements at various levels of government related to right-of-way (RoW) permissions have also constrained and increased the cost of deployment of fixed broadband networks. Reforms for improving the policy and regulatory environment, as well as improving the capacity of key institutions in the implementation of policies, particularly for processing permissions for the RoW are much needed.

Copyright Business Recorder, 2023


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