On digital Pakistan

The mantra of “Digital Pakistan” is in fashion these days. In its latest quarterly report, the State Bank of Pakistan has identified a number of areas where telecom, IT and Fintech folks can come together and partake in economic value addition. The onus lies on the telecoms authorities to guide the way. But it is unclear when the Digital Pakistan Policy framework will be finalised. Right now, there is no concerted action plan, desired outputs and targets to achieve a reasonable degree of digitization in the economy.

Arguably, the buck stops with the government when it comes to low amount of ICT usage in the country. The government must do more than just digitize its ministries’ database. It must become the biggest user of ICT. It has to go digital in areas ranging from procurement to payroll to public service delivery. While setting up startup incubators has been a good step at the center and some provinces, further government facilitation can come through creating startup investment funds that provide matching government equity.

Then there are heavyweight industries under government that can really use tech to stage a turnaround. Take the energy sector, for instance, where smart grids and smart meters were supposed to make the demand-supply realm efficient. But poor planning and vested interests in the public sector doomed their application. (For more on the subject, read “AMI project: good riddance?” published February 23, 2018).

Telecom experts have long been enthusiastic about the beneficial role which remote, tech-based advisory and instruction can play in critical areas like food security (agriculture, water, etc.) and human development (health and education). Here, the provincial governments – which have those subjects under their domain – need to come up with strategies to incentivize uptake of related applications.

Over in the e-commerce area – a true convergence of commerce, tech and payments – the local market is expected to hit $1 billion in sales this year. But this market has pretty much grown on its own, without payment gateways and interoperability among digital payment players. Sustainable growth requires a dedicated e-commerce framework to deal with payment, taxation and consumer-protection issues. Huge job-creation potential exists in there, from manufacturing and marketing to warehousing and logistics.

The digitization potential exists in other sectors, too. But anyone looking to harness all of that in a young, low-income country will have to look at the “affordability” concern. Technology has the potential to worsen income inequalities and regional disparities. Policymakers will do well to take steps to increase affordability for end users in both individual and commercial areas, on both hardware and service fronts.
For consumers, broadband should not carry any tax; high FED on telecom usage should be reduced. For telco’s, reasonable spectrum pricing and a right-of-way framework would do. (For more on telecoms FDI, read “On falling telecom investments,” published February 8, 2018). To reduce imported cost of ICT devices for software makers, government must consider acceding to the Information Technology Agreement. These and more fiscal and technical elements must inform a holistic digital strategy.