The criticism around the government’s recently unveiled IT Export Policy is premature, primarily because there is a lack of information. The 18-page report that mentions the $10-$18 billion export target number for the IT industry is a summary of a longer, much detailed 300-page report which discusses the issues and the solutions at length. The longer report is based on multiple other reports such as on Pakistan’s competitive analysis and the global IT industry analysis, none of which have been (or would likely be) released for the reason I explain below.
So I can not exactly comment whether this number is achievable or is a complete fluff. I can rather try to explain how the government is thinking and approaching this number. As I have come to learn, this report was a diagnostic exercise on the IT sector of the country to identify flaws that were impeding the growth of IT exports in Pakistan and what could be done to increase that number. The rational question also is what could be a realistic number for Pakistan’s exports given the country’s strengths and weaknesses. This number, as we now know, is $10-18 billion. Some aspects of approaching this number would be logical assumptions, while some would be mathematics based on available data.
Let me try to explain this further with an example. Let’s say that the government thinks that it can increase IT exports to $10 billion by 2028, and reaches this conclusion that the freelancing workforce is the best shot at achieving this number. Let’s assume that the government data suggests that freelancers in Pakistan earn on average $1,000 per month. At this rate, Pakistan would need to have over 800,000 freelancers by 2028 to achieve this export target. Based on the current number of freelancers in the country, the government would decide how to achieve the required number of freelancers and would allocate resources based on that, meanwhile introducing legislative changes to make it happen.
Some work has already been done on different fronts. For instance, an initiative of the Punjab Information Technology Board (PITB), the institution that was strengthened by now caretaker minister Umar Saif, freelancers are being trained from 2017-18. Folks at PITB claim that under this initiative, the board has trained around 56,000 freelancers in various domains that have reported a cumulative earning of Rs8 billion during that period. Similarly Arif Alvi also launched the Presidential Initiative on Artificial Intelligence and Computing in 2018 to train new resources in advanced technologies that would eventually lead on to increase exports. Over 100,000 applications have been received under this initiative since its launch. Data from the Securities and Exchange Commission of Pakistan (SECP) also mentions the IT sector among the top 3 sectors in which new IT companies were being launched increasingly. This hints at the government’s ownership of increasing ease of doing business.
Much of this work had started during the tenure of former prime minister Imran Khan. In fact, the current IT export policy was also completed in December last year but could not be released due to political turmoil. Meanwhile the global IT industry landscape changed, national politics changed and the Special Investment Facilitation Council (SIFC) was formed. Given these factors, the policy was recalibrated and announced recently with different targets.
Now, why could the report not be made public? It is purely strategic, as I have come to know. The government thinks that the country would stand to lose its competitiveness, if through the report the government itself validates that serious structural problems exist in the country. Assumptions could be made on such validations and business would flow to other countries that do not have such problems. That is to say your IT company could lose an export contract if they come to know of your country’s problems through your government, even though you might be able to work it out on the ground knowing how things work here. So it is rather in the interest of the government to solve the problems discreetly, all the while keeping a good face in public by disclosing only that it is solving the problems without disclosing much details publicly. Mind you that the government engages credible people that not only help the government lay out a plan but debate on different solutions to different problems. Only the best solutions would be executed based on these deliberations. So while the $10-18 billion number might sound unrealistic to some, it might be pretty much achievable. There’s not enough transparency yet to say for certain.
This piece was originally written as a dissenting note to an op-ed by Profit’s Senior Editor Abdullah Niazi. Read the original article here: Here is why our IT “exports” are not what Umar Saif wants you to think