Pakistan’s economy is absolutely devastated. Inflation continues to skyrocket, rumours of default circulate, and many salaried employees suffer. According to the United Nations Development Programme (UNDP), approximately four million young people enter the working age in Pakistan every year. However, only one million are able to secure employment.
In this abysmal environment where many young individuals are not able to meet their needs from the job market in Pakistan, a rising group of young Pakistanis find themselves as an integral part of the global ‘gig’ economy. Through platforms such as Upwork and Fivver, they have built lucrative careers for themselves, gaining more pay and security than most salaried positions in Pakistan.
You have heard of these people as “freelancers.” Yes, the ones that have developed skills in diversified fields, exclusively work for foreign clients, earn money in dollars and as a result, remain unaffected by the inflation.
There is yet again another crisis for freelancers in Pakistan, perhaps more profound than any obstacle that they have faced in the past. The only match for Pakistan’s turbulent economy is its (more) turbulent political situation, and this has severe repercussions for freelancers.
Alongside inciting countrywide protests, road blockages and the attack on the Corp Commander House, the arrest of the ex Prime Minister Imran Khan has also led to a suspension of telecommunication services across the country. Social media sites and services such as Twitter, Facebook and YouTube have been indefinitely blocked, with many people resorting to VPNs to meet their needs.
Only social media addicts are not suffering however. The internet ban has borne very material, catastrophic consequences for freelancers and the larger gig economy.
According to sources, Fiverr, a global online marketplace for freelance services has automatically made gigs unavailable for Pakistani freelancers. This is done to prevent any damage to their response rate and ratings owing to the internet shutdown in Pakistan.
A freelance agency owner informed Profit, “Fiverr has issued notifications informing its clients that its freelancers from Pakistan may not be able to meet their deadlines due to the suspension of internet services in the country.”
Such instances severely jeopardise the budding freelance industry in Pakistan. It raises big question marks on its credibility and will hijack it even before it’s able to firmly establish itself.
Irfan Ahmad (@irfanahmad), an expert of digital ad sales in the Middle East and Pakistan and the CEO of Dotcome Arabia, summoning the Pakistan’s Ministry of Information and the DG ISPR tweeted in outrage, “The Pakistani IT industry is being destroyed by such action. In this day and age, internet outages are not acceptable.”
This is the gig economy, or that segment of the labour market which is characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. This is not a novel concept though. Such a working framework has existed since businesses started hiring temporary or seasonal workers. Basically, every individual that works as part of the gig-economy is a small firm or company in and of themselves. They search for clients, do the work, submit it, collect the money and move on to the next project or next client.
The gig-economy is an emerging sector in Pakistan. Freelancers in the country earned around $400 million in both 2021 and in 2022 which accounts for about 15% of Pakistan’s total $2.6 billion ICT (information-communication-technology) exports.
As a report in The News International pointed out last year, for a developing country like Pakistan, with unemployment being a concern and with 64 percent of its population under the age of 30 (the youth, aged 15-29 make up 41.6 percent of the country’s total labour force, according to the Pakistan National Human Development Report (NHDR) by the UNDP), the gig economy model may be a welcome solution.
An Oxford Internet Institute (OII) report ranks Pakistan 4th in the global digital gig marketplace, with about 8% of the total freelance work in 2017. The same report points out how in 2021, Pakistan generated an amount of $500 million entirely from freelancing and has ranked as the 4th fastest growing markets in the world for freelancers. Pakistan generated $1 billion in revenues entirely from freelancing gigs as early as 2017 and contributed to over 8% of the global gig economy.
Yet there are many problems that afflict freelancers. The lack of access to payment gateways such as PayPal have made life difficult for freelancers for example, who find it difficult to collect their earnings. On top of this, the banking system also incentivises this kind of work when it should in fact be doing the opposite.
The data from the past 4-6 years is reflective of the immense potential of the gig economy in Pakistan. In fact, with the right policies and encouragement the gig economy and services could very well become Pakistan’s next big export sector. However, given the uncertain and rather chaotic political situation, the gig economy is prone to deep and perhaps irrecoverable shocks.