The world is embracing OpenAI’s viral Natural Language Processing tool ChatGPT for all the right (maybe wrong) reasons but authorities governing Pakistan seem dispassionate and more concerned with political supremacy and wealth building.
With the economy in tatters and annual inflation breaking records at 36.4 percent, it’s surprising to see that the current government is ignoring opportunities to harness sectors of the economy that have a proven track record of delivering growth.
For example, the IT-related industries with a strong intersection with technological development were once worth more than $2.6 billion in export earnings to the Pakistani economy before the spring of 2022, ranking in the top five high-yielding sectors of the country.
India, Bangladesh Revel in All Their Glory While Pakistan Struggles
For context, Bangladesh’s overall exports rose by 5.38 percent to $45.68 billion in July-April FY23, while Times of India estimates India’s exports to hit a record high of $770.2 billion by June this year. In contrast, Pakistan’s overall exports reached $23.17 billion in 10MFY23, levels below its South Asian counterparts.
Pakistan’s government and companies may compete against rivals India and Bangladesh in the global AI race, but they are unaware that gaining ground won’t be easy without a certain amount of collaboration or homegrown innovation. Why mingle?
India’s ambition to be a world leader in AI and other technologies has created an opening for multilateral organizations and Silicon Valley powerhouses, which attract the majority of top global AI talents and are keen to tap into the subcontinent’s vast data. The presence of global AI research projects is also a boon for India, which aims to become a global technology leader in a few years.
According to India’s National Association of Software and Service Companies (NASSCOM), the country’s tech industry is projected to grow by $245 billion in FY2023, representing a $19 billion net revenue increase for the year. Conversely, Pakistan’s imports ($88 billion) are expected to be about twice the level of exports ($44 billion) by FY2026-27.
Pakistan Can Continue Playing it Deaf or Make a Quick Decision
Pakistan – the world’s 4th most popular freelancers’ market – is reeling from both global and domestic headwinds coupled with massive moderation in both supply and demand as core manufacturing industries have helplessly failed to take advantage of opportunities in basic and emerging avenues.
Some local companies have opted to hold revenues abroad as they aim to build a suitable reserve with partner entities in Dubai, Australia and Qatar without the bad air of Pakistan’s ridiculous tax regimes and economic shortfalls. Some publicly listed companies are holding over half of their earnings overseas either in cash or invested in AI ventures with foreign entities.
On computer prices, he said, “Retailers can’t control it. Laptop prices have more than doubled, while few components are just more expensive. People are now compelled to buy used or refurbished goods”.
“Lapses in mobile production aren’t helping either. Three foreign-owned plants have stopped production due to raw material shortages imposed by import restrictions, threatening the jobs of thousands of employees,” he added.
He lamented that imported goods are priced in rupees rather than dollars and they have faced nerve-wracking price hikes due to inflation and import restrictions. The government has classified many tech products as luxury items, and taxes on them have risen in the past 12 months. This, including other more stringent taxes, has made it difficult for tech companies to thrive, he noted.
Way Forward
To end these woes, the current and future governments must bring in pro-business reforms, AI-friendly digital policies, and increased remittance inflows rather than relying on the short-term remedy of IMF loans. If the IMF buttermilk is too tempting, then stakeholders should devise an investor-friendly mechanism that allows creditors and lending institutions to prioritize cash flow for the tech industry.
Things like ‘soft loans at the local level’ is old news. To support economic growth in the tech space, the government should work to deploy ICT infrastructure and policy support for AI innovation through research and collaboration.
It is pivotal for Pakistan to adopt high-tech systems like AI without fail and consider the necessary safeguards to avoid falling foul of a growing epidemic of technological cleansing which has outgrown the academic and activist communities. Playing deaf while the world moves forward threatens to disrupt economies like Pakistan where authorities are reluctant to embrace emerging tech in exchange for petty politics and wealth building.
Source: Pro Pakistani