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Cover Story

May 29 - June 04, 2000

Proceedings of the Focus Group meeting

The GoP has recently floated the draft of Information Technology (IT) Policy for comments. The broad objective of the Policy is to get the country ready to be an active participant and beneficiary of the technological development. The key to success is understanding the current state of IT in the country and find ways and means to catch up with rest of the world.

PAGE with the help of Intel Pakistan arranged the 'Focus Group Discussion" at the Board Room of Bank Al-Falah and the participants were: Mohsin Iqbal of Intel Pakistan, Tanveer A. Khan of Bank Al-Falah, Shabbir Buxamoosa of United Bank, Kamran Ahmed of Al-Faisal Investment Bank, Hasan Khan of Cyber Net, Irfan Ali of DHL Pakistan, Umer Mania of The Fourth R, Ghiasuddin Sheikh of Virtual Services and Arif Hashwani and Khurram Malik of Hashwani Group.

Mohsin Iqbal opened the discussion with his observations on the draft of IT Policy. This policy aims at increasing export of software from Pakistan but contrary to this IT should be used to improve the competitiveness of the core industries, i.e. textiles and clothing. He raised some basic questions and asked the participants to make their input to find answers to these questions, What should be the definition of IT and does the country need the IT industry? What are major constituencies of IT industry? What kind of infrastructure is needed to facilitate greater use of internet?

Mohsin Iqbal: Intel is a solution provider for internet economy and sees an enormous potential of IT growth in Pakistan. However, the country lacks a clear IT vision therefore most of the times are in piecemeal. The largest potential users of IT are the core industries of Pakistan. Efforts should be made to find the solutions to improve their competitiveness and promote the business. When the core industries flourish it automatically generates new employment opportunities. It may be true that Indian export of software fascinates many Pakistanis but Indian strength has always been its skilled manpower. This important input cannot be ensured without churning out qualified graduates from educational institutions. Pakistan has to make computer affordable — one way could be local assembly of hardware and accessories and supplies. It is heartening to note the growth of computer population as well as the users of internet in the country. However, the low level of awareness, lack of conducive policies and absence of IT vision have kept the growth rate low.

Tanveer A. Khan: Our bank has been striving hard to achieve excellence in IT at all levels. We have installed the best available hardware, use state-of-the-art communication infrastructure and find solutions. For example at Karachi branch we use an unbranded computer as server. It was possible only because of availability of qualified hardware experts who assembled the server, based on Intel architecture, from 'building blocks' available from reputed suppliers. It was possible only because we knew what type of final product we need.

Hasan Khan: We, being a leading internet service provider, are often criticized for not being up to the mark of the expectations of our customers. The critics often ignore a fact that quality of our service is dependent on the infrastructure owned and maintained by Pakistan Telecommunication Company (PTCL). Even if we want to increase number of telephone lines and enhance the bandwidth we cannot do so without the active support of PTCL. As the internet is becoming an integral part of our daily life and the country wishes to move on to e-commerce the PTCL has to expand its infrastructure, rationalize its tariff structure and improve the quality of services.

Shabbir Buxamoosa: As a bank we enjoy two different slots in IT industry, one as its user and other as developer of software for other banks. Now we have the added responsibility, being a financial institution, to arrange finances for the different constituencies of IT industry. It has been observed that financial institutions are still not fully equipped to evaluate a request for funding. This become even more difficult in case of software developing companies.

Kamran Ahmed: Being an investment bank we have a mandate to facilitate fresh investment in the country. Investors often get a feeling that the market size is too small to justify an economically viable business venture. However, after observing the market growth during last couple of years, financial institutions have also started exploring this fast growing market. Some of the institutions have established 'IT dedicated venture capital funds'. As opposed to providing funds for tangible assets, the criteria for intangible (software) has to be different. It may take some time to come up with clear cut risk evaluation but the process has already started.

Irfan Ali: Previously IT was considered a tool but we must realize that the new definition is, IT is a strategic weapon. Therefore, there is a need to create greater awareness about the IT and its benefit to the users. We must also realize that we are much behind our neighbours. We talk about exporting software but do not have the people to develop software for conglomerates. We can gradually develop the skill by first developing software for our indigenous industries or service sector companies — where a latent demand also exists.

Umer Mania: We must understand that there is no short cut to success. We have to first define our vision, develop policies and create conducive environment for investment. It is long drawn process. We can take the advantage of Pakistanis living abroad, having specialized skills, and encourage them to invest as well as work for the country. We should also keep in mind that when they come to the home country they have high level of expectations and the biggest frustration is the small irritants. They often get a feeling that their services are not required. The other important aspect is the remuneration while they work in Pakistan as the local people are not able to understand their formula of man-hours and the fee for each man hour.

Ghiasuddin Sheikh: An impediment in the development of IT industry in Pakistan is availability of funds. Most of the people who have the required expertise to establish and run software development houses do not have funds at their disposal. Local financial institutions are shy in extending funds and capital market rules also do not encourage listing of companies with small paid-up capital. The local entrepreneurs are shy to invest in this new area — though they want. May be the reason is that they have been associated to investing and producing tangibles for such a long time.

Arif Hashwani: We have not been able to change our mind set. There is need to publish success stories like Netsol. (PAGE has published the Netsol story in its issue number 8 of this year which may be read by visiting our website). The average comprehension of IT is low in Pakistan and the awareness in public sector is disappointing.

At the end of this decision following recommendations were proposed.

* There is no short cut and the country should draw an elaborate and long term IT plan

* The use of IT should be on top of the agenda of CEOs

* The sole aim should not be export of software

* Use of computer should be encouraged at all levels

* IT should be deployed in core industries to achieve competitiveness and for business promotion

* IT should be used for finding solutions and not for record keeping only

* Awareness about IT in public sector should be enhanced

* Public sector spending on IT should be increased

This was not the end of the story. These recommendations may not be very extensive but an effort has been made to understand the view point of some of those who excel in their respective areas. It was also suggested more such discussions should be held to study various issues facing the IT industry.

PAGE is indebted to all the participants for their valuable input and Al-Falah Bank in particular for hosting the event and their hospitality.