Laraib Farhat
Usama Nizamani
Infer Talks Tackles Challenges for Pakistan’s IT Industry
By Elaine Pasquini
Washington: Laraib Farhat, a policy affairs specialist with P@sha, an organization formed to work with the Pakistani government to develop an IT-friendly environment in the country, was the featured guest on the July 4, 2024, episode of Infer Talks, a digital platform conducting policy analysis on global issues. Usama Nizamani, senior research journalist and Stimson Center visiting fellow, spoke with her about the most critical challenges facing Pakistan’s software industry.
Pointing out that reliable internet service has been a problem in Pakistan with frequent disruptions causing major problems, especially for foreign companies doing business in the country, Nizamani questioned Farhat on the effect this has had on foreign investors with respect to making investments within the IT industry.
In response, she noted that internet disruptions have cost international clients and others in Pakistan’s IT industry some “$5 billion every day for the blanket ban of internet disruption.” Unfortunately, when 3G and 4G are not working “that’s a very huge setback that we need to fix,” she said.
P@sha as a trade body association has had consultations and high-level meetings with the Pakistan telecommunication authority on proposed solutions of how to actually protect the IT industry from internet disruptions that are happening now and will happen in the near future.
As one solution to this problem, P@sha proposed whitelisting (the granting of network access only to specific IP addresses) for Pakistan’s IT industry. Therefore, member companies that were registered with P@sha had their static IP addresses whitelisted so that in case of any disruptions their internet would not be obstructed. “That is how we are helping the IT industry be protected from such kind of disruption,” she explained.
With respect to whether whitelisting covers freelancers or people with their own businesses, Farhat noted that currently, this is happening on only a limited scale and only accommodating companies who are registered with P@sha and with the Pakistan software export board, she said. “So, we are only doing it for the regulated industry as of the moment. But in the near future, we are looking at developing a portal through which we can actually facilitate a lot more people. We’re actually looking to regulate the industry.”
Another important issue is for the government to develop consistent policies because “only consistent policies can gain investors’ trust,” Farhat pointed out. “At one time there was an exemption of tax on export proceeds but then it was replaced by a more complicated tax policy. We are looking at having a lower tax rate. We are also looking at exemptions on capital gains and dividends so investors do not have to pay double taxation on their dividends because they have already paid the corporate tax in their country. These are some of the policies that we are pushing forward for the government to take into account.”
In conclusion, with respect to how the way forward would look, Nizamani asked whether the IT industry would be able to work with partners both in the United States and China and if there are any stumbling blocks that are likely to occur in the future.
Geopolitical threats are looming and there is big tech competition geopolitically between China and the US, but when it comes to countries like Pakistan they are still in the developing stage, “trying to make our space,” Farhat responded. “We’re getting comfortable in that. I don’t think we should be afraid of this because our services are going to the US, China, and Europe.”
“We’re very concerned at the moment to fix our own house first and then see other countries’ geopolitical competition as a threat, so I think we are moving in the right direction at the moment,” she said in conclusion. “We just need a lot of relaxation in the government’s policies for the IT sector because this is one of the sectors that is straight surplus, and we need to protect it and not treat it as other traditional sectors because this one is different. There’s a knowledge economy mindset that we’re promoting. So, it needs to be protected and it needs to be treated differently.”
(Elaine Pasquini is a freelance journalist. Her reports appear in the Washington Report on Middle East Affairs and Nuze.Ink.)
