State Bank: Pakistan IT Exports Surge Past Billion Dollars in 2018

Pakistan's information technology exports have bucked the nation's declining exports trend with double digit growth to reach $1,065 million in fiscal year 2018, according to the State Bank of Pakistan.  It is generally believed that Pakistan's central bank underestimates technology exports. Some have argued that the actual IT exports were closer to $5 billion in fiscal 2018. Some of the differences can be attributed to the fact that the State Bank IT exports data does not include various non-IT sectors such as financial services, automobiles, and health care.

Source: State Bank of Pakistan

Pakistan IT exports surged 13.4% to $1.06 billion in fiscal year 2018 from $939 million in fiscal year 2017. The growth was even more robust in the prior year with IT exports rising 19.1% from $789 million in fiscal 2016 to reach $939 million in fiscal year 2017.

Source: State Bank of Pakistan

About $320 million of IT exports revenue in fiscal 2018 came from software exports while the rest was made up of services such as consulting, telecom and call centers.

Online Labour Index top 20 worker home countries, 1-6 July 2017

Freelancers in Pakistan are benefiting from the growing access to broadband connections which are now being used by over 50 million Pakistanis across the country. Pakistan is ranked 4th in the world by the freelancing industry report.  The country has rapidly increasing human capital of technologists.



Growth in IT exports is a good sign for Pakistan's export diversification beyond commodities such as textiles and food. In addition, air forces of about a dozen developing nations are buying and deploying Pakistani made aircrafts. The reasons for their choice of Pakistan manufactured airplanes range from lower cost to ease of acquisition, maintenance and training.

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Comments

Riaz Haq said…
#Pakistan eyes boosting medicine exports. #Pharmaceutical #exports are currently earning $230 million with potential to expand up to $2 billion. The industry is the 6th largest sector contributing to the overall exports of Pakistan. https://tribune.com.pk/story/1813190/1-pakistan-eyes-boosting-medicine-exports-2b/

The Drug Regulatory Authority of Pakistan (Drap) has assured the pharma industry that in order to further facilitate exports, the authority will establish a separate desk where all concerns of exporters regarding issuance of necessary documentation will be addressed.

Pharma exports are currently earning $230 million with potential to expand up to $2billion.
A meeting was held on Thursday under the chairmanship of Federal Minister for Health Services Aamir Mehmood Kiani with pharmaceutical exporters. The purpose of this meeting was to discuss mechanisms to boost volume of pharmaceutical and alternative medicine exports.

The federal minister in response to concerns of the pharma industry, being represented by the Pakistan Pharmaceutical Manufacturing Association and top 20 pharma exporters of Pakistan, emphasised on the need of harmonisation and facilitation of pharma export by engaging customs and the Trade and Development Authority of Pakistan (TDAP) for resolution of their grievances.

He said the sector has huge potential and needs harvesting to benefit the country by earning money abroad through improved exports of pharmaceutical and alternative medicine. It was also apprised the industry could expand its volume of exports as the 6th largest sector contributing to the overall exports of Pakistan.

Kiani advised stakeholders to submit a working paper on how export volume can be improved. Following which, CEO DRAP, Dr Sheikh Akhter Hussain apprised the federal minister that DRAP has already taken initiative to facilitate local manufacturers who are exporting to other countries.
Riaz Haq said…
#Pakistan undergoing transformation towards #digital domains: experts. #technology https://tribune.com.pk/story/1820035/1-pakistan-undergoing-transformation-towards-digital-domains-experts/

Experts stressed the fact that Pakistan is currently going through a rapid transformation towards digital and technological domains which requires identifying current problems, upcoming challenges and proposing solutions.

These views were expressed at a panel discussion organised by PlanX Technology Accelerator, a project by the Punjab information Technology Board (PITB) on Saturday. The theme of the session was ‘The Future of Incubators and Accelerators in Pakistan’.

Panelists included PITB Entrepreneurship Director Atif Mumtaz, NSPIRE Technology Incubator Head Ayub Ghauri and UET Technology Incubator Programme Manager Farhan Riaz who proposed solutions to the challenges being faced by stakeholders.

Experts discussed the situation of entrepreneurs and relevant stakeholders including the future of incubators and accelerators in Pakistan.

PITB Entrepreneurship Director Atif Mumtaz, who is spearheading the board’s entrepreneurial projects, highlighted the past achievements of the board’s entrepreneurship wing.

He stated that Plan9 and Plan X have become common knowledge among university and college students. “Due to the fact that there is a lack of jobs in the market, students have started coming up with their own business ideas in the form of start-ups,” he said.

This is a big achievement and has helped to tackle unemployment in the country. It is encouraging to see investors supporting such ideas and playing a key role in promoting entrepreneurial activity, he added.

NSPIRE Technology Incubator Head Ayub Ghauri maintained that in addition with opening more institutions such as incubators and accelerators, it is also important for start-ups to think outside of the box particularly during the development stage.

“This out of the box thinking can help identify sustainable business ideas which can function in the long run,” he added.

Panelist also gave examples of successful start-ups which have gone through incubators and accelerators and highlighted the importance of learning from failures.

Mughees Tahir, from PlanX, highlighted that entrepreneurs were likeminded people with similar goals and even similar problems; Pakistani start-ups should help each other in order to grow.

The panel discussion was followed by a question and answer session from the audience.
Riaz Haq said…
Foreign #remittances sent by overseas #Pakistanis increase by $629 million, up 13% to $5.419 billion in first three months of current fiscal year https://nation.com.pk/11-Oct-2018/foreign-remittances-sent-by-overseas-pakistanis-increase-by-13

Foreign remittances sent by overseas Pakistanis have increased by 13 per cent, 5.4 billion US dollars, in the first quarter of the 2018-2019 fiscal year (July 1-June 30), in comparison to the previous year, according to figures released by the State Bank of Pakistan (SBP) on Thursday.

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The SBP reported that overseas Pakistani workers remitted 5.419 billion dollars during the period from July 2017 to September 2018, up 629 million dollars.

Inflows from Saudi Arabia were the largest source of remittances. They amounted to 1.263 billion dollars in the first three months of the current fiscal year, up 2.9 percent as compared to 1.228 billion dollars in the corresponding period of last fiscal year.

The highest rise in remittances was seen from Britain, which climbed 32.3 percent to 828.4 million dollars against 626 million dollars in the same period of last fiscal year.

During the period under review, inflows from the United States rose to 759.4 million dollars, depicting an increase of 18 percent. Among the three major corridors of home remittances, Saudi Arabia is still the largest contributor to remittances inflows into Pakistan, despite lower growth compared to Britain and the United States.

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Local economists believed that the rise in remittances in the first three months of current fiscal year is a positive sign for the incumbent government as it can play a key role in reducing the country's current account deficit.
Riaz Haq said…
The following export product groups represent the highest dollar value in Pakistani global shipments during 2017. Also shown is the percentage share each export category represents in terms of overall exports from Pakistan.

http://www.worldstopexports.com/pakistans-top-10-exports/

Miscellaneous textiles, worn clothing: US$4 billion (18.1% of total exports)
Cotton: $3.5 billion (16%)
Knit or crochet clothing, accessories: $2.5 billion (11.5%)
Clothing, accessories (not knit or crochet): $2.5 billion (11.3%)
Cereals: $1.8 billion (8%)
Leather/animal gut articles: $632 million (2.9%)
Sugar, sugar confectionery: $511.9 million (2.3%)
Optical, technical, medical apparatus: $410.6 million (1.9%)
Fish: $406.9 million (1.9%)
Salt, sulphur, stone, cement: $385.5 million (1.8%)
Riaz Haq said…
This is what I tweeted this morning after watching Imran Khan's speech  ( https://youtu.be/d-f_KEtSKC0 )  at Davos in the Desert:

Disappointed in #ImranKhan's #Pakistan pitch at #DavosInTheDesert. #Saudis are big investors in #SiliconValley and #ImranKhan failed to mention Pakistan's #tech potential. It took an #Indian questioner in the audience to point to #Pakistan's #IT potential http://www.riazhaq.com/2018/08/state-bank-pakistan-it-exports-surge-to.html


I think Imran Khan needs a tailored pitch for investors that focuses on opportunities offered by Pakistan, not its problems. 

And the opportunities should be explained in a way to attract investments in sectors that export higher value manufactured products, not commodities. 

The IT exports are only a billion dollars now but these are growing in double digits and already account for the third largest export category after textiles and food items. 

IT exports are also the fastest growing segment of Pakistan's exports.  And the potential for IT exports goes far beyond the BPO business. 

Pakistan is already home to two tech made-in-Pakistan tech unicorns: Affiniti and Careem. Here's a blog post I wrote about it:

https://www.riazhaq.com/2017/05/afiniti-and-careem-tech-unicorns-made.html

Imran's investment pitch needs to be very different from his political campaign speeches designed for domestic audiences. 

I think Imran can be a very good and effective pitchman for Pakistan if he’s better briefed and prepared for such conferences. He’s personally very charismatic 
Riaz Haq said…
Despite dip in #textile sector, knitted #garment #exports soar 16%. #Pakistan’s overall textile exports were recorded at $1.13 billion in October 2018, down 0.12% compared with $1.132 billion in the same month in 2017. https://tribune.com.pk/story/1849520/2-despite-dip-textile-sector-knitted-garment-exports-soar-16/

Despite a slight dip in overall textile exports, the knitwear garment sector has maintained a steady pace of growth in its shipments and led the sector with an increase of 16.13% in its exports for October 2018.

Pakistan’s overall textile exports were recorded at $1.13 billion in October, down 0.12% compared with $1.132 billion in the same month last year.

However, the knitwear garment sector stood on top with the highest exports in the textile chain as well as in total national exports with a growth of 16% compared with October 2017.

Knitwear garment exports grew 10.41% in July-October 2018 against the corresponding period of previous year.

With cut in input cost, textile sector vows to double exports

“Knitted garments have a great potential for expansion,” commented Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Central Chairman Muhammad Jawed Bilwani.

“The knitwear garment sector can achieve new milestones and its export can be enhanced by 25% every year, provided the government gives serious consideration to the proposals sought from the sector,” he said.

The sector alone earned $2.719 billion for the country in fiscal year 2017-18, which included knitted products like hoodies, shirts, t-shirts, jerseys, pullovers, trousers, jackets, etc. The sector has ranked high in the textile group over the past three years.

Textile exports drop 16% after rebate reduction

Bilwani termed it appreciable that the government was giving priority to five zero-rated export sectors – textile (including jute), carpet, leather, sports and surgical goods – and was also prioritising the export industry for the provision of uninterrupted gas supply with special tariffs, which was a longstanding demand of the PHMA. He was of the view that if the government considered the exporters’ proposals and resolved all their problems and issues, a breakthrough in exports could be easily achieved.

He called exports the lifeline that would support and strengthen the national economy. He also demanded that the government consider and set separate electricity tariffs for the five zero-rated industries and introduce uniform tariffs for water consumption as well. Currently, water tariffs for the industries in Karachi were the highest when compared with other regions and provinces.

Meanwhile, the PHMA has written a letter to the finance minister, requesting him to register all export-oriented textile manufacturers as zero-rated industries so that they could avail themselves of the facilities. “Many small and medium export-oriented industries are not registered as zero-rated in utility bills due to cumbersome tax payment procedures as they first pay sales tax and then apply for tax refund,” he said.
Riaz Haq said…
#Pakistan #food #exports up 16.9%. In Q1 of FY 2018-19, foodstuff exports from Pakistan grew by 16.93% as compared to the corresponding period of last year. These exports were recorded at $885.8 million as against $740.5 million the year before http://www.freshplaza.com/article/9035122/export-of-pakistan-food-commodities-up-percent/#.W_IX8oVdSKI.twitter

On month-to-month basis, the exports increased by 31.25 percent in September 2018 as compared to the same month of last year.

During the period from July to September 2018, exports of fruit and vegetables increased by 49.34 percent and 19.17 percent respectively. In first quarter, 130,747 tons of fruit worth $101.9 million were exported as compared to exports of 83,073 tons (at $68.2 million) in the same period last year.

During the period under review, Pakistan also earned $16.1 million by exporting about 4,289 tons of spices, recorded at 3,558 tons and $13.4 million of same period of last year, registering an increase of 21.82 percent.

Riaz Haq said…
Technology Can Address Problems Plaguing Pakistan Economy By Henny Sender, Financial Times

#Technology can address problems plaguing #Pakistan #economy. #Investments by #China’s #Alibaba and promise of local start-ups highlight potential for innovation. #startups #ecommerce #fintech #exports #trade https://www.ft.com/content/6f2633d4-e7f9-11e8-8a85-04b8afea6ea3 via @financialtimes

In May Alibaba bought Daraz, the biggest local e-commerce platform in Pakistan, from Germany’s Rocket Internet for about $200m. By joining the platform, smaller manufacturers can reach new customers in China. Already the site has 6m registered buyers and thousands of sellers. Two months earlier, Alibaba’s Ant Financial paid $185m for a 45 per cent stake in Telenor Microfinance Bank — a deal that promises to improve financial inclusion and support small businesses in Pakistan......Shahid Mustafa, Telenor’s chief executive, says: “In five years we will be the largest tech company in Pakistan.”...... Already Telenor, which says it has 75,000 agents and 176 branches across the country, has recruited thousands of software engineers. At an incubator on the outskirts of Karachi, young companies are addressing even more daunting problems.......Muhammad Khurram founded Aqua Agro, which specialises in smart irrigation. Mr Khurram estimates that farmers who use his smart devices need half as much water, yet they increase yields of crops such as lemons by 30 per cent. He is also using crowdfunding to raise money.
At the same time, another member of the same incubator, Fatima Anisha, has devised a technique to treat organic waste and turn it into fertiliser which improves yields without using harmful chemicals......While the efforts of the country’s start-ups are in many cases modest, they offer a vision of how the country — often with help from bigger Chinese technology groups — could start to find solutions.
Riaz Haq said…
#Information #Technology — #Pakistan’s next ‘#textile’.“When you can earn $2,000 from a project you can finish in one week, why bother about a fulltime job,” Freelancer Nasir Hussain told Samaa Digital. #export http://www.samaa.tv/news/2018/11/ict-pakistans-next-textile/

Nasir Hussain, a resident of Landhi No. 6, worked in the banking sector for seven years before realising it wasn’t worth it. In 2014, he enrolled for a Master’s degree in computer science and taught part-time to run his kitchen.

Fast forward to 2018, his services are in high demand both locally and internationally. Hussain teaches software development and artificial intelligence at Karachi’s reputable private universities because more people are signing up for these courses. In the evenings, he works as a freelance developer for online platforms, such as freelancer.com, upwork.com and fiverr.com.

“When you can earn $2,000 from a project you can finish in one week, why bother about a fulltime job,” Hussain told Samaa Digital.

Three years ago, Hussain teamed up with some other freelancers to provide IT services, such as mobile apps, software and web development. The work has grown significantly since then and they have now set their eyes on earning at $5,000 per month for each member of their team.

Hussain’s team is part of a 200,000-strong nationwide network of freelance developers, who have been driving the country’s IT exports that have surpassed $1 billion just recently. Even that number is grossly understated because most of the payments to freelancers are recorded as remittances, not exports.

According to industry experts, IT has the potential to be the second largest export industry after textile and become a major player in the $200 billion global market for IT services. If supported with the right policy and incentives, the sector can generate employment at a mass level, boost our exports and ease pressure from our dwindling dollar reserves.

Pakistan is once again knocking the doors of the International Monetary Fund for a bailout since its dollar reserves have fallen sharply. The country’s imports are more than double its exports as for every dollar earned, it spends two. Fewer dollars means we may soon default on our foreign payments: import of oil, machinery for CPEC and repayment of foreign loans. The current level, $7.4 billion, of our foreign exchange reserves is barely enough for two months of imports.

Experts are unanimous that increasing our exports is the only way Pakistan can come out of this crisis where it seeks the IMF’s help every few years. Textile sector, which constitutes more than half of our total exports, is always seen as our saviour. The Pakistan Tehreek-e-Insaf has also supported this sector in its policies during the first 100 days of their government.

Textile sector’s contribution to the economy in terms of exports and employment can’t be ignored, but it is time the country took IT sector seriously because of its potential.

India went on to develop its IT sector and became the powerhouse for outsourcing and freelance services. Their IT exports have now surpassed $125 billion, nearly 40% of our GDP. The Philippines also adopted policies that supported its IT sector. The South Eastern nation now exports $30 billion worth of IT services—more than our entire exports.



On the other hand, Pakistan lagged behind because of poor, IT infrastructure, negative perception, and the shortage of skilled IT workforce. However, all of this has changed. Unlike past when there was only one subsea cable, the country now has six gateway points connecting it with the cyber world. The security situation has improved significantly and our universities are producing 20,000 IT graduates every year.

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