Rapid advancement of digital technologies, coupled with the transformative effects of the Covid-19 pandemic, has led to profound changes in Pakistan’s economy. Adapting to this technological evolution has become both imperative and urgent. To effectively navigate these changes, the government must proactively devise regulations and policies which cater to the evolving digital economic landscape, says the “Digital Report 2022” by the Overseas Investors Chamber of Commerce and Industry (OICCI). The report says presently, internet penetration stands at 49%, and cellular mobile connections cover around 82% of the population, with active social media users comprising 31.5%. While progress has been made in digital infrastructure, significant gender and geographical disparities in fibre optic connectivity persist.

To address this, it is advised to foster an investment-friendly environment, reduce import duties to promote local fibre optic cable development and ensure widespread 4G access before rolling out 5G to enhance connectivity. Despite impressive strides in digital financial services and fintech, Pakistan remains predominantly cash-based. Challenges include limited credit data for consumer evaluation and a complex regulatory framework for fintech. Encouraging electronic payments through tax incentives, streamlining fintech regulations, and establishing Fintech Facilitation Desks can stimulate growth in this sector, making it a substantial contributor to economic transformation. Further, the Pakistani e-commerce market saw 29% growth in 2021, contributing to global expansion. However, obstacles related to platform integration, e-commerce taxation, cross-border funds movement, and warehouse management hindered progress. To facilitate growth, simplifying regulations, attracting international e-commerce firms to establish regional offices, supporting SME digitization, and bolstering cybersecurity efforts are recommended.

Moreover, rapid digitalization has spurred innovative business models, lowered trade-in-service costs, and created fresh opportunities. To boost IT and IT-enabled service exports, promoting collaboration with educational institutions for training, reducing import duties on computers, offering innovation grants, and supporting R&D in software development and technology are suggested measures that can significantly impact the IT ecosystem. Digitization holds immense potential for the government and social sectors, enabling efficient public services, enhancing agricultural productivity, and extending health and education services to remote areas.

Investments in human capital, improved consumer access to e-government services, AgriTech start-up support, phased digitization of education and health sectors, and creation of national electronic health records can expedite digitization adoption. In addition, cloud and data centre technologies present untapped potential, but their adoption in Pakistan has been sporadic. Incentivizing investments in hyper-scale data centres, supporting local cloud service providers, and integrating government databases can harness the advantages of cloud computing. The global shift towards Web 3.0 offers Pakistan a unique opportunity to uplift its economy. To harness this movement, policymakers should foster an innovation-friendly environment, enact enabling regulations, integrate modern technologies into education, and support start-ups through investments and grants.

According to the report, facilitating digitization necessitates an evolving, robust environment. A comprehensive digital harassment policy, simplified processes for online safety, relaxation of financial trading regulations, improved access to regulators, and staying abreast of emerging digital trends are essential steps toward realizing a digital Pakistan. Anticipating future developments and aligning with global and regional regulations will further contribute to the vision of a digitally empowered nation.

Credit: Independent News Pakistan (INP)