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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Riaz Haq on Pakistanis in Silicon Valley

Can Pakistan Avoid Recurring BoP Crises?

Pakistan Launches NUTECH to Prepare 21st Century Workforce

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.

READ MORE: Police on high alert ahead of Indian temple opening to women
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.

READ MORE: Amid global outcry, China defends internment camps of minorities in Xinjiang
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.
Riaz Haq said…
IT exports from Pakistan show slowed growth this year

https://www.techjuice.pk/it-exports-from-pakistan-show-slowed-growth-this-year/


http://www.sbp.org.pk/ecodata/ExportsImports-Goods.pdf


According to a recent report, the product and services exports from the IT sector of Pakistan show less than expected growth this year.

The recent report which comprises of export data taken from the first four months of the current fiscal year shows that the IT exports from Pakistan weren’t able to meet the expected growth rate targets. The statistics as made available through State Bank of Pakistan show that the growth in the Telecommunications, Computer, and Information Services sector of Pakistan stood at 5.34%, a rate which is lesser than what was originally being anticipated by the industry veterans.

The export receipts from Pakistan stood at $355 million, during the first four months of the current financial year which started July. These receipts show a year-on-year increase in the IT-related exports standing at 5%. The exports value from the same period last year stood at $337 million. During the last year, the Pakistani IT exports had shown a growth of 13% during the whole financial year.

On a rather good note, the IT-related imports showed a decline as more reliance went towards indigenous produce of ICT-related services and products. The imports have decreased from $163m to $147 showing a decrease of 9.8%. It must be mentioned here that the facts presented in this report account for the trades with receipts and apart from this a lot of informal trade also happens between Pakistan and the rest of the world.

The lesser increase in the exports could be credited to decrease in the value of Pakistani rupee against the dollar. The rupee has depreciated greatly this year as the fiscal deficit in Pakistani reserves and trade increased as the financial year started. This means even if the amount of services/products from this category has increased, the, overall value of the exports didn’t progress much.

Riaz Haq said…
#Pakistan’s #digital revolution is happening faster than you think. Growth is being accelerated by other major investments in #power and #connectivity #infrastructure, technology and digital infrastructure. #technology #CPEC https://www.weforum.org/agenda/2018/11/pakistan-s-digital-revolution-is-happening-faster-than-you-think/ via @wef

The digital power of China’s Belt & Road Initiative (BRI) is slowly unfolding and shaping into a whole new area of opportunity.

When the BRI took global centre stage in 2013, most conversations revolved around traditional infrastructure: building roads, railways, power sources and linking borders. However, the digital awakening that BRI brings, and the associated development of human capital and innovation, is much more powerful.

The global map is being altered at a much faster rate than anticipated due to the disruption created by digital infrastructure, artificial intelligence, the Internet of Things, and blockchain. Further digital and technological disruption is now set to mend fractures in society – leading to improved living conditions and enhanced economic empowerment.

This disruption has given new life to e-commerce and the start-up scene in BRI countries. In light of the Global Competitiveness Index 4.0, it is extremely important that economies grow in all areas, overcoming challenges and making investment in human capital and innovation. Resilience and agility are key.

Looking at the South Asian region, some of the traditional deterrents to growth have been inadequate transport facilities, patchy power supplies and lack of financial inclusion. As we have seen in the past, industrial revolutions take their time to reach developing countries but the Fourth Industrial Revolution has been quick to reach all corners of the world.

Billions of dollars of investment are bridging the infrastructure and power supply gap while improving technology – the goal is to look past the problems that have hindered the road to progress in countries along the BRI.

The flagship project of the BRI, the China-Pakistan Economic Corridor (CPEC), which is a major collaboration between China and Pakistan, has been rapidly progressing and the impact of the project can be seen in the lives of Pakistani people, as reflected in an improving human development index.

Pakistan, which is emerging from many years of the war on terror, is now on a decent path to progress, with economic growth of 5.8% and improved investor confidence. At the World Economic Forum in 2017, Ebay’s chief executive, Devin Wenig, highlighted Pakistan as one of the fastest growing e-commerce markets in the world. In 2018, Alibaba bought Pakistan’s largest e-commerce platform, Daraz.pk.

..... Ant Financial Services, China’s biggest online payment service provider, recently bought a 45% stake in Telenor Microfinance Bank, in a deal that valued the Pakistani bank at $410 million.

Irfan Wahab, chief executive of Telenor Pakistan, called the deal a “game changer”; while Eric Jing, chief executive of Ant Financial, said it would provide “inclusive financial services in a transparent, safe, low-cost and efficient way to a largely unbanked and underbanked population in Pakistan”.

This kind of investment will benefit from the significant demographic dividend in Pakistan, targeting the largely unbanked young population, and providing not only financial inclusion but also a base on which to build digital businesses.

What the country needs now is to improve its position on the innovation and financial inclusion indices, currently at 89 and 75 respectively, on the World Economic Forum’s Competitiveness Index 2018.

-----------

The rapid completion of CPEC projects and the use of digital technology in the process is disrupting the economy and the lives of people at the same time. The question is whether Pakistan’s leadership will choose to embrace these technologies and take advantage of the biggest project on the road to progress. The future is full of opportunities and promise.
Riaz Haq said…
#Pakistan graduates about 22,000 #computer-#science majors each year. Significant numbers of these graduates can be groomed into a small army of highly-skilled professionals to develop #AI products and earn billions of dollars in #tech #exports. https://www.thenews.com.pk/print/404748-gateway-to-knowledge

By Dr. Ata ur Rahman

The advantage of investing in areas such as artificial intelligence is that no major investments are needed in terms of infrastructure or heavy machinery and the results can become visible within a few years. There is now a huge international demand for well-trained professionals in this field. Most advanced countries are searching for young trained professionals so that they can benefit from development taking place across the globe. Visa restrictions have been relaxed for these professionals. Artificial intelligence will find applications in almost every sphere of activity, ranging from industrial automation to defence, from surgical robots to stock-market assessment, and from driverless cars to agricultural sensors controlling fertilisers and pesticide inputs.

Pakistan churns out about 22,000 computer-science graduates each year. With additional high-quality training, a significant portion of these graduates could be transformed into a small army of highly-skilled professionals who could develop a range of AI products and earn billions of dollars in exports.

Another important step in developing a knowledge economy is to uplift our technical and vocational training centres while being mindful of the needs of industrial hubs that are to be set up under CPEC. There are over a thousand such centres, but they are in a bad state. If some of these centres are converted into high-quality technical training institutes for teachers in collaboration with Germany, China or other advanced countries, well-trained teachers can then be absorbed in the thousand or so technical training centres. This could contribute to industrial development. The Fourth Industrial Revolution is upon us with all of its challenges. We live in a world where truth has become far stranger than fiction. Each day brings thousands of new discoveries. Many of these discoveries are transforming our lives in numerous ways. The blind can now see using their tongue. Molecular scissors have been developed that allow genes to be cut from one species and transferred to another, resulting in new plant and animal species. Genes have been transferred from deep-sea jelly fishes to orchids to make flowers that glow in the dark.

Nanotechnology is being employed to commercially purify water. Superfast gene-sequencing will allow the entire human genome to be sequenced in minutes. Objects can now be moved by thought control and driverless cars are being developed. We now have anti-ageing compounds that have been known to reduce the signs of ageing among mice. Children being born today are expected to live up to the age of 120 or more.

3D-printing is being used to produce parts of human livers and kidneys. Stem cells promise to cure damaged organs and may change the manner in which medicine will be practised in the future. Our own work on the molecular basis of thought processes has provided exciting insights into the functioning of the human brain – arguably the most complex object in our universe, with 100 billion neurons in a brain, each neuron communicating with some 10,000 other neurons. This work has led to new approaches to treat Parkinson’s disease. A knowledge economy requires a different approach to socioeconomic development than that adopted by Pakistan so far. It needs to rely on carefully crafted policies and the development of knowledge and skills in selected fields for inclusive sustainable socioeconomic development.

The formation of a taskforce to strengthen knowledge economy represents one of the most important developments in the history of Pakistan. The PMmust be congratulated for focusing on this critical area. The challenge now lies in the efficient implementation of the taskforce’s recommendations.
Riaz Haq said…
#Alibaba's #Alipay's entry to tap great potential of #Pakistan #ecommerce market. US$184 million investment to expedite mass adoption of digital #payments in Pakistan. #Internet penetration rising with estimated 60 million subscribers of 3G and 4G. https://on.china.cn/2EO9fAc

Alipay, a subsidiary of Hangzhou-based Ant Financial, has been cleared by the Competition Commission of Pakistan (CCP) to acquire a 45 percent stake in Pakistan's Telenor Microfinance Bank.

The investment of over US$184 million will expedite widespread adoption of digital payments in Pakistan. With internet penetration continuously on the rise, there are an estimated 60 million subscribers of 3G and 4G in the country that can become potential users of the service.

Several mobile payment services are presently operating in Pakistan. Primarily, these have been offered by telecom operators with a large number of cellular subscribers. However, limited international application has kept the penetration rate of the payment portals relatively low. Entry of Alipay, the world's largest mobile payment platform, will intensify competition higher, improve the quality of service and reinvigorate the entire landscape of the industry.

Pakistan's growing young population makes it suitable for embracing cashless payments on a large scale. People under the age of 30 form 64 percent of the population who are always the most likely to take up any new technology. On top of that, high cellular phone use will be a facilitative factor, since the mobile-first strategy for internet-based businesses is very valid in Pakistan.

Commencement of Alipay's operations in Pakistan will also provide a major push to e-commerce. eBay CEO Devin Wenig recently identified emerging economies like Pakistan as the fastest growing e-commerce hubs of the world. The trend is spreading like wildfire across the country with new online shops emerging constantly. A reliable e-payment gateway with worldwide collaborators is all that Pakistanis need to streamline their online transactions.

Alibaba had already acquired Pakistan's leading e-commerce platform Daraz. Utilizing the reach of Alibaba, Pakistani sellers will now be able to connect with global buyer.

The digital payment boom will be most beneficial for small and medium-sized enterprises that form the backbone of the national economy. Many of these businesses face difficulties in financial transactions due to being located in rural areas. Alipay might prefer to focus on them as the Pakistani government wants to reduce their business costs and difficulties.

Across the border in China, a new policy is on the cards to increase e-commerce purchases from overseas. Around 63 additional categories are being added to a product list of what can be imported duty-free through online platforms. Moreover, 22 cities, such as Beijing, Nanjing and Shenyang, are also being included in e-commerce pilot zones.

With several food items in the revised e-commerce import list, there is much potential for Pakistani farm produce. Fruits like mango and the mandarin hybrid kinnow can gain extended reach in the Chinese food market and the recent push to increase meat and poultry production could further boost Pakistan's exports.

The targeted online shoppers in China are increasingly focusing on foreign brands. Large businesses and premium brands from Pakistan can reach out to these buyers through Tmall Global – another Alibaba operated e-commerce platform allowing Chinese consumers to purchase products from abroad. Pakistan's small to medium businesses might not have the logistic prerequisites for this platform, but international-standard large companies certainly can.

Ant Financial is coming to Pakistan at a time when trade between Pakistan and China is touching new heights through the flagship project of Belt and Road Initiative (BRI) known as China Pakistan Economic Corridor (CPEC).
Riaz Haq said…
Can Pakistan Ride the New Tech Wave?
Feb 8, 2019 ASAD JAMAL

https://www.project-syndicate.org/commentary/pakistan-technology-startups-follow-china-s-lead-by-asad-jamal-2019-02

Technology, innovation, and entrepreneurship are the key ingredients for economic success in the twenty-first century, as the US and China are demonstrating. If Pakistan can also realize its huge untapped potential in these fields, the result could be a more dynamic country that is better placed to solve many of its other problems.

I soon learned that in the new Internet world, these obstacles were perfectly normal and surmountable by visionary, passionate entrepreneurs with big dreams and ideas. Consequently, my firm went ahead and invested in Robin’s vision. Within five years of that first meeting, Baidu went from little more than an idea to being the leader in China’s Internet search industry, leaving Google and Yahoo far behind. Today, it is one of China’s top three Internet companies, forming the so-called BAT triumvirate along with Alibaba and Tencent. Robin himself is now the Larry Page (or Bill Gates) of China, with a net worth of over $10 billion.

Baidu’s story is similar to that of many other successful tech firms. Like Alibaba, Apple, Google, and Facebook, the company was driven by young founders rather than older business tycoons. In addition, Baidu initially relied on venture capital for equity funding, avoiding the conventional bank debt that would have been a kiss of death for a young start-up. Like its successful US peers, Baidu posed a radical and disruptive challenge to incumbent market leaders. Finally, Baidu showed that good ideas can grow at an exponential pace, as its market share rose from zero to market leadership in five years.

Since then, the pace of technological innovation has accelerated further, with the computing and Internet revolution morphing into a new one powered by artificial intelligence, nanotech-biotech, and cyber-physical systems. Here, too, the opportunities for visionary entrepreneurs are huge. And here, too, the global leaders are the US and China, with the latter continuing its remarkable recent tech development.


At present, Pakistan’s economy is focused on traditional industrial sectors, agriculture, textiles, fertilizer, and cement, leaving it trapped somewhere between the first and second industrial revolutions. The combined market value of all 559 companies listed on the Pakistan Stock Exchange is about $60 billion, equivalent to that of a single top-100 technology company.

To break its cycle of poverty, Pakistan must create conditions enabling its broad participation in the technology revolution. Only through radical reform can the country leapfrog to the AI-led Fourth Industrial Revolution of today. To achieve this, Pakistan must recognize that its young people are its most precious resource. It should educate and empower them, and cultivate their success, particularly in science and technology. If they succeed, Pakistan succeeds.

The good news for Pakistan and other countries in a similar position is that tech start-ups require far fewer resources than traditional large-scale industrial firms. Whereas the latter typically need hundreds of millions of dollars in capital, plant and machinery, and bank loans, tech companies need only a small team of smart people, computers, modest funding, and mentorship. Young Pakistani entrepreneurs are just as well placed as their Chinese counterparts were two decades ago: they need big ideas and encouragement to build on them.

Here, of course, the provision of venture capital is essential. Pakistan should therefore establish a national venture capital fund to promote technology entrepreneurship. Moreover, China’s rise as an economic and technology leader gives Pakistan a unique opportunity to learn from its neighbor and collaborate with it in education, science, and technology. And Pakistan should leverage its historical ties with US and British universities in these areas.
Riaz Haq said…
Can Pakistan Ride the New Tech Wave?
Feb 8, 2019 ASAD JAMAL

https://www.project-syndicate.org/commentary/pakistan-technology-startups-follow-china-s-lead-by-asad-jamal-2019-02

Technology, innovation, and entrepreneurship are the key ingredients for economic success in the twenty-first century, as the US and China are demonstrating. If Pakistan can also realize its huge untapped potential in these fields, the result could be a more dynamic country that is better placed to solve many of its other problems.

I soon learned that in the new Internet world, these obstacles were perfectly normal and surmountable by visionary, passionate entrepreneurs with big dreams and ideas. Consequently, my firm went ahead and invested in Robin’s vision. Within five years of that first meeting, Baidu went from little more than an idea to being the leader in China’s Internet search industry, leaving Google and Yahoo far behind. Today, it is one of China’s top three Internet companies, forming the so-called BAT triumvirate along with Alibaba and Tencent. Robin himself is now the Larry Page (or Bill Gates) of China, with a net worth of over $10 billion.

Baidu’s story is similar to that of many other successful tech firms. Like Alibaba, Apple, Google, and Facebook, the company was driven by young founders rather than older business tycoons. In addition, Baidu initially relied on venture capital for equity funding, avoiding the conventional bank debt that would have been a kiss of death for a young start-up. Like its successful US peers, Baidu posed a radical and disruptive challenge to incumbent market leaders. Finally, Baidu showed that good ideas can grow at an exponential pace, as its market share rose from zero to market leadership in five years.

Since then, the pace of technological innovation has accelerated further, with the computing and Internet revolution morphing into a new one powered by artificial intelligence, nanotech-biotech, and cyber-physical systems. Here, too, the opportunities for visionary entrepreneurs are huge. And here, too, the global leaders are the US and China, with the latter continuing its remarkable recent tech development.


At present, Pakistan’s economy is focused on traditional industrial sectors, agriculture, textiles, fertilizer, and cement, leaving it trapped somewhere between the first and second industrial revolutions. The combined market value of all 559 companies listed on the Pakistan Stock Exchange is about $60 billion, equivalent to that of a single top-100 technology company.

To break its cycle of poverty, Pakistan must create conditions enabling its broad participation in the technology revolution. Only through radical reform can the country leapfrog to the AI-led Fourth Industrial Revolution of today. To achieve this, Pakistan must recognize that its young people are its most precious resource. It should educate and empower them, and cultivate their success, particularly in science and technology. If they succeed, Pakistan succeeds.

The good news for Pakistan and other countries in a similar position is that tech start-ups require far fewer resources than traditional large-scale industrial firms. Whereas the latter typically need hundreds of millions of dollars in capital, plant and machinery, and bank loans, tech companies need only a small team of smart people, computers, modest funding, and mentorship. Young Pakistani entrepreneurs are just as well placed as their Chinese counterparts were two decades ago: they need big ideas and encouragement to build on them.

Here, of course, the provision of venture capital is essential. Pakistan should therefore establish a national venture capital fund to promote technology entrepreneurship. Moreover, China’s rise as an economic and technology leader gives Pakistan a unique opportunity to learn from its neighbor and collaborate with it in education, science, and technology. And Pakistan should leverage its historical ties with US and British universities in these areas.

Here's an Islamabad speech by Asad Jamal: https://youtu.be/OKmtptJyvEo
Riaz Haq said…
IT exports fetch $540m in six months

https://profit.pakistantoday.com.pk/2019/01/21/it-exports-fetch-540m-in-six-months/

An increase of $20 million when compared to export figures of the same period last year
ISLAMABAD: The information technology (IT) and telecommunication industry of the country has contributed $540 million foreign exchange to the national kitty through exports during the first two quarters of this fiscal year 2018-2019.

The telecommunication, computer and information services managed to export IT and IT-enabled services worth $540 million, seeing an increase of $20 million as compared to exports figures of the same period last year, statistics of State Bank of Pakistan (SBP) revealed on Monday.

The year-on-year increase of just 3.8pc in the export value of IT industry is lower than expected and is likely because of the impact of rupee depreciation against the dollar.

It is pertinent to mention that Pakistan’s IT industry achieved a benchmark of $1.065 billion of exports in the last fiscal year 2017-18.

Pakistan Software Exports Board (PSEB) had chalked out a plan to boost exports to over $6 billion by 2020 and $10 billion by 2025.

The present government has also emphasized digitisation of the economy and the IT sector. It has formed a special task force on IT, comprising big names of the industry, to create jobs and facilitate exports.

The targets set for IT exports are ambitious but can be achieved if opportunities in the fields of cloud computing, mobile apps, artificial intelligence, blockchain etc. are availed by national companies.

According to Pakistan Software Export Board (PSEB), Pakistan’s IT & ITES-BPO industry comprises more than 2,500 companies, and this number is growing each year. The industry employs over 300,000 English-speaking professionals with many world-class experts in current and emerging IT products and technologies.

Pakistan is ranked 4th as the most popular country for freelancing in Online Labor Index published in 2017 by Oxford Internet Institute (OII). It is also listed as the 4th most financially attractive country in the world for outsourcing services, as per AT Kearney’s Global Services Location Index 2016.
Riaz Haq said…
SBP quarterly report: ICT informal exports higher than formal exports

https://fp.brecorder.com/2019/01/20190131443658/

Pakistan's informal exports of Information and Communications Technologies (ICT) are probably much higher than formal exports. Official ICT exports of Pakistan touched $ 1 billion for the first time ever in FY18, however as per industry experts estimates the total size of Pakistan's ICT exports is around $ 2.5 billion. Of these exports, registered firms using formal banking channels to collect export receipts account for around $ 1 billion. However, roughly $ 1 billion is attributed to Small and Medium Enterprises (SME) exports in the grey market and the remaining $ 0.5 billion is accounted for by freelancers in the Information Technology (IT) and IT-enabled services (ITES) space that serve international clients.

State Bank of Pakistan (SBP), in its first quarterly report "The State of Pakistan's Economy" for FY19, has added an special section titled "Performance of ICT Exports of Pakistan". This section analyzes in detail the dynamics of ICT exports, and highlights the challenges faced by the firms and individuals in increasing their share in the growing business process management (BPM) and micro-works global market.

According to the report, while the major stakeholders including Pakistan Software Export Board (PSEB), associations, and industry analysts provide different estimated figures pertaining to the undocumented exports, a common narrative prevails when it comes to reasons behind the under-representation of receipts in the official statistics.

First, the absence of PayPal is a major concern. PayPal is the most widely used payment method across the globe, and relatively more convenient, cheap and safe. Therefore, a number of ICT and Business Process Outsourcing (BPO) firms prefer to receive their revenues using money transfer organizations like Western Union, with some even preferring to have their revenues deposited in banks outside Pakistan to avoid the associated transfer costs. In the case of former, the export receipts reflect as workers' remittances, whereas in case of latter, these earnings remain unrecorded altogether, the report mentioned.

Secondly, the report said that anecdotal evidence also suggests that some firms and individuals themselves bypass proper documentation in order to either stay under the radar of tax authorities, or avoid the hassle of filling out SBP's Form 'R' (considered both cumbersome and redundant). Furthermore, most firms simply opt out of negligence and lack of awareness about the proper export procedures.

The SBP said that while Pakistanis have begun to figure prominently in electronic freelancing lately, it was the sharp increase in consultancy services provided by the country's ICT firms that has dominated the export trend over the last couple of years. As per the official statistics, computer services have generated most of the export ($726 million in FY18) momentum in recent years. However, while software exports have displayed a more-or-less stagnant export performance over the previous 5 years, a steady growth has been observed in the export of consultancy services.

As for the sector's composition, export revenues of only 30 percent of the total 3,228 ICT exporting entities came from computer software during FY18; the rest had either limited or no product orientation, as they generated revenues only from low value added services e.g. call centers. However, from FX generation perspective, this dominance of low value-added services is not favorable.

Riaz Haq said…
Pakistan’s exports of telecommunication, computer and information services have increased to $708.93 million in the first eight months of the current fiscal year.

https://profit.pakistantoday.com.pk/2019/05/05/telecom-info-services-exports-reach-708-93mn/

The earning made through these exports during the corresponding period of fiscal year 2017-18 was $520.04 million, Pakistan Bureau of Statistics (PBS) reported.

According to data issued by the PBS, the telecommunication services exports were recorded at $65.596 million during the current year against $61.533 million last year, showing decline of 17.12 per cent.

Among the telecommunication services exports, the exports of call center services increased by 6.6 percent.
Riaz Haq said…
#Pakistan (8.5%) is the world's 4th largest supplier of #online #labor after #India (24%) , #Bangladesh (16%) and the #UnitedStates (12%). https://ilabour.oii.ox.ac.uk/where-are-online-workers-located-the-international-division-of-digital-gig-work/

https://twitter.com/haqsmusings/status/1141745036490498048

The Internet has created a global market for digitally delivered freelance work, which is currently growing rapidly. Our new Online Labour Index worker supplement reveals what skills different countries are bringing to the market. For instance, the top occupational category in the United States is writing and translation, while in the Indian subcontinent it is software development and technology. Europe’s various regions focus on different specialisms. The map is based on near-real time data from four of the largest platforms connecting buyers and sellers of online freelance work.

The largest overall supplier of online labour according to the data is the traditional outsourcing destination India, which is home to 24 percent of the workers observed. India is followed by Bangladesh (16 %) and United States (12 %). Different countries’ workers focus on different occupations. The software development and technology category is dominated by workers from the Indian subcontinent, who command a 55 percent market share. The professional services category, which consists of services such as accounting, legal services, and business consulting, is led by UK-based workers with a 22 percent market share.

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