Pakistan is pinning its hopes on the promising tech industry to steer the country of economic stalemate amid the pandemic challenges which have eroded investment in many areas but offered the opportunity for information technology to prosper.
As part of its plan to push the technology-driven growth, Pakistan this week inaugurated the second of several planned Special Technology Zones in Lahore.
To be developed in major cities of the country, the Special Technology Zones or STZs are designed to be homes to Science and Technology Parks, manufacturing units, research and development centers of global tech companies, and software houses.
Universities, incubators, accelerators, and other ecosystem players would be part of the special zones.
Pakistan has seen its economy stagnate despite progress in some sectors, resulting in a ballooning fiscal deficit that has become a big political headache for Prime Minister Imran Khan’s government. Like many other countries, Pakistan has also seen a worrisome price hike trend with inflation eating away the value of the national currency rupee vis-à-vis the U.S. dollar.
While opening the second special zone, Prime Minister Khan noted that the tech industry could help overcome Pakistan’s current account deficit by boosting exports and bringing employment to young people. He vowed to offer incentives and facilitate growth in the sector.
He hoped that the special zone in the eastern city named “Lahore Technopolis” would help the project and provide incentives to the tech industry, bringing ease to doing businessmen as per the government’s policy.
“The IT sector would also address the issue of unemployment of the youth, particularly the women, besides boosting the country’s exports,” Khan said.
He added that all businesses had faced a dip amid the COVID-19 outbreak, but profits of tech companies like Google, Amazon, and others multiplied.
“Unfortunately, Pakistan lagged behind in the sector despite having ideal conditions, including a huge population of young people,” he said.
He cited the example of neighboring India, noting that within 15 to 20 years, Indian tech exports boomed to $150 billion while Pakistan’s could reach just $2 billion.”
Among reasons that Khas says expanded the current account deficit has been the import of machinery, which ultimately devalued the local currency and forced the government to go back to the International Monetary Fund for bail-out loans.
“The country can only come out of this cycle by boosting its exports and allowing wealth creation,” he said.
Khan also gave the example of China’s economic progress, saying the country achieved a remarkable level of progress and steered 700 million people out of poverty by eliminating corruption and jailing over 450 ministerial-level people, and enhancing exports.
On the country’s vast economic potential, he said by taking advantage of its 12 climatic zones, the country could reduce its import bill of commodities like edible oil through indigenous production of palm oil.
He also made a case for the involvement of overseas Pakistanis towards investment and wealth creation in Pakistan.
“China and India had also first attracted their own firms operating abroad to invest at home,” he said. “Pakistani individuals, as well as the firms operating abroad including the Silicon Valley, were interested to invest in Pakistan which necessitated incentives and ease of doing business.”
