After failing to capitalize on previous technological booms that helped countries like India and the Philippines become back-end operators for the globe, Pakistan is aiming to grow its IT sector by establishing specialized technology zones across the nation in two years.
By next year, Pakistan intends to have established a dozen such zones, according to Amer Hashmi, the country’s science and technology zone development administrator. It’s offering a 10-year corporate tax exemption and free imports of any equipment or construction materials needed for the regions, which will give Pakistan’s IT sector a “catapult push” that could double
Pakistan is counting on the country’s new technology zones to provide employment for its large number of young people, who make up nearly two-thirds of the population. According to Oxford Internet Institute’s Online Labour Index, it already hosts the world’s third-largest gig economy after India and Bangladesh. A flood of foreign investment into fintech, e-commerce, and other sectors related to coronavirus outbreak is also fueling demand for specialized areas to serve these sectors.
After Prime Minister Imran Khan asked for answers at a gathering last year as to why Pakistan was missing out on the tech revolution, the idea came about. Hashmi informed the prime minister that Pakistan lacked a technological eco-system or an enabling environment, recalling his own experience as an entrepreneur.
Mr. Hashmi, a software engineer from Canada who left his job at IBM in order to start a technology firm in Pakistan, had to deal with requests for bribes and delays in establishing his own fiber network and data centers. The new regions will not have these difficulties, according to Mr. Hashmi, and will be a plug-and-play model.
“How do you attract a Google, Microsoft, or Amazon? You have to offer special incentives for that. I believe we would have been the last in the region to provide them because of this. Dubai Internet City made it happen. They lured all of the major businesses.”
Pakistan, which is cash-strapped, has attempted to start similar projects in the past. In 2006, it intended to invest $1 billion in dozens of software parks, but that project failed. This time, the government’s efforts will include luring foreign investment to ensure the initiative succeeds.
Hashmi said that as many as 50 domestic firms and six international businesses have expressed an interest in establishing in the planned regions, with around $1.5 billion of private investment expected to flow into these projects during the next two years. He is also convincing the government, which is investing millions of dollars on technology-based initiatives, to give more contracts to local firms. In Karachi’s commercial capital, TPL Corp. is creating a tech zone equipped with high-tech infrastructure
“Pakistan can’t have a full-fledged technological revolution,” said Habibullah Khan, the founder of Penumbra, a digital marketing firm that also works with startups. “We don’t have the money for it, so we can’t have one. The most recent public-private partnership model makes perfect sense.”
The newly appointed finance minster has also pledged to assist the IT sector, which he believes may enhance diversification and help the country escape its typical boom-and- bust cycles.
In an interview in May, Shaukat Tarin said, “The sector can be a game-changer and will be given ‘everything they want’ by the government.”