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July 30 - Aug 05, 2001

The development of Information Technology and Telecommunication industry is the cornerstone of the present government policy and numerous measures have been taken during the past about 15 months to develop these industries on a fast track.

This was observed by Prof. Dr.Atta-ur-Rehman, Minister for Science & Technology, in an exclusive interview to PAGE in his office in Islamabad last week.

The Minister claimed that what has been achieved by Pakistan in months has been achieved by other countries in years and "if we continue with our present pace of development we will catch up with advanced countries in this field in the next five years". An IT trained force of 100,000 youngmen and women will be preparad in the next three years to achieve the target software export of 1 billion dollar. Out of seven IT Universities planned, two have already started functioning and three more will be operational by the end of current year. The seven universities, on being fully operational by the end of next year, will be producing about 50,000/- IT graduates every year. Replying to a question the Minister said that the government was fully conscious of the fact the cost of IT education in recognized IT institutions was beyond the paying capacity of the parents belonging to lower middle or even the middle class living within the honest means. "We have already started scholarship and Qarz-e-Hasna schemes to ensure that talented students were net denied IT education because of financial constraints. The fee charges of the seven IT universities being set up in public sector will not exceed Rs. 2000/- per month", he added.

Continuing he said the government of Pakistan is aware of the fact that the country is lagging behind in the international IT race and is therefore, implementing a well thought out and structured strategy to bring Pakistan into the digital map of the world. In this regard, we have broken new ground and changed many established paradigms to get to where we are in this short time. We have also established a target of achieving US $ 1 billion of IT services export by the year 2005 so that the efforts remain goal oriented and achievable. Prof Atta-ur-Rehman claimed that the response to our initiatives has been overwhelming and Pakistan has been able to attract local and foreign investment in the IT sector. Internationally recognized names like IBM, Sun Microsystems, Cisco, Microsoft, Motorola, have already set their foot on the soiI and numberous others are planning on setting up their operations in Pakistan. The investments/projects that have shown tangible progress in the past 1 year are:

* Align Tech has established its off-shore operations as well as the first call center (100+agents) at Lahore.
* Cisco has set up a full-fledged office.
* Microsoft negotiating a multi million $ investment package with GOP.
* Oracle planning to invest $ 20.00 million in training in Sindh.
* $ 10 m Telehousing Project with Akhter Group, UK being set up.
* IBM planning to invest Rs.200 million in IT education.
* Commitments from CERN, Geneva and World Bank
* Huawei Technologies to invest $ 2.5 m in IT Center in Pakistan.
* Motorola to invest $150 m in expanding its cellular network,
* ZTE to establish a software development center in Pakistan.

In addition, the local software industry has shown progress too. The benefits likely to accrue from the recently concluded ITCN Asia 2001 are estimated to be US$ 500 million. MOUs worth US $ 300 million were signed while business under negotiation reported by exhibitors is US $ 200 million. All of these indicators point to a healthy and growing IT industry in Pakistan which has resulted in considerable employment generation within the IT industry and allied sectors, Dr Atta added.

Major milestones achieved during the past year are listed below:

* Information Technology and Telecommunications Division was established, which started functioning on 1st July 2000.
* IT Policy & Action Plan was approved in August 2000
* Commitment for Rs. 5.00 billion was made for next 3 years and Block Allocation of Rs. 200 billion was made in PSDP for fiscal year 2000-2001.
* Key Areas of Development focus are.

A. Human Resource Development more than 60% of the total IT budget being spent on this sector.

B. Infrastructure development.

C. IT Industry, Products, Services, Software Development and Exports.

D. E-Commerce, E-Government.

Human Resource Development is the most important area of IT Policy and Action Plan and that is where 2/3rd of our resources are planned to be invested. In this regard, 48 projects have been approved and an amount of Rs.1,462 million has been committed to date, out of which Rs.415.87 million have been disbursed towards various ongoing projects. By the end of June 2001, an additional sum of Rs.487.85 million would be disbursed, bringing the total disbursement to Rs.1040.72 million for the current fiscal year. Some of the projects being undertaken are listed below:

* Training of 10,000 Data Entry Operators 9,000 trained and more than 80% absorbed by the industry.
* Training of Medical Transcriptionists.
* Java Training Program.
* Internetworking Training Program.
* Attracting women to the field of IT and special arrangements for their training at different levels.
* Re-Training of Public Service Professionals and officials in IT (degree and short term courses have been started).
* Scholarships and Qarz-e-Hasna for IT Human Resource Development (1,070 per year for BCS/MCS programmes).
* Master Plan for Scholarships and Qarz-e-Hasna for IT students (3,000 per year).

Institutional capacity building

A very important aspect of the IT policy and Action plan is institutional capacity building so that our vision of producing 100,000+ IT trained workforce can be realized. In this regard, many programmes have been launched such as:

* IT Visiting Faculty Hiring Program
* Strengthening and Capacity Building of IT Departments in Universities all over Pakistan.
* Virtual IT University for Distance Learning.
* IT TV Channel
* Establishment of IT Universities throughout the country.

These programmes would help in strengthening the infrastructure of IT departments of existing public sector universities and establishing of IT departments in these universities where they don't exist. This infrastructure enhancement would allow the universities to target a broader student body for training/retraining. Top quality IT faculty is a major bottleneck for most public/private sector universities and we have launched programmes to attract good quality faculty from home and abroad, for short and long term commitments whose service could be utilized in our training programmes. A very important step in this direction is the establishment of Virtual IT University for Distance Learning, based out of Lahore, with campuses in all four provinces and the Azad Kashmir. The project has been approved by the CDWP recently. This university is being established at Lahore in the near future and would help address the issue of lack of top quality IT faculty to a large extent. In addition, 7 IT universities are also being established. Two of them have already received charter namely, COMSATS and National University of Emerging Science and Technology. Two more are planned for NWFP and others are being set up in the Northern Areas, Sindh, Punjab and Balochistan.

The Pakistan Army has already donated brick and mortar infrastructure for establishing of one of these universities in Abbottabad.

In the field of IT industry development following key initiatives have been taken.

* A Software Technology Park is already functioning at Islamabad. STPs being set up in Peshawar, Karachi, Islamabad and Lahore likely to become functional shortly.
* Business Incubator established and functioning in Singapore.
* Establishment of Business Offices and Incubators in San Francisco and plans for setting up such offices in New York, London, Tokyo and Sydney.
* Pakistan Software Export Board being re-structured in consultation with private sector stakeholders.
* IT companies allowed 15 year tax exemption already announced by the Chief Executive.
* Software Exporters allowed to retain 35% of their earnings in Foreign Exchange accounts.
* IT industry related equipment import made duty free.
* Nationwide IT Survey conducted by Gallup. Results being analyzed before release.
* Venture Capital Funds rules approved. VC Funds granted 7 years income tax holiday.
* Five major VC funds launched in private sector.
* SECP rules for IPO of tech stocks modified.
* Banks and DFIs providing financing options for the IT sector Contracts accepted as collateral for export finance facility.
* Accreditation and Quality Testing Councils being set up to ensure quality of IT education in the public and private sector.
* IT contracts will be awarded only to 100 per cent Pakistani-owned entities or to joint ventures where the government is convinced that a genuine transfer of technology will occur Chief Executive's announcement.
* Mega IT Exhibition IT Commerce Network Asia 2001 held at Karachi in March. It was visited by more than 350,000 visitors. The visitors included 25,000 local and overseas visitors from corporate and public sector.
* A number of seminars, exhibitions and workshops organised by the private sector Dawn Newspaper Group organised a 2 days Software Exhibition at Karachi on 23-24 January attended by well over 100,000 visitors.
* UNDP sponsored seminar on IT and Software development being held in Lahore in September 2001.

Infrastructure development

Infrastructure for IT industry is another important area and due attention is being accorded for its development. Fortunately, PTCL and private sector operators have implemented development plans in the past decade, so the improvements required are mostly in terms of structural adjustments, add-ons and not greenfield projects with long gestation times. The structural improvements brought about under the IT Policy and Action plans have all shown positive results on the growth of IT industry. Some of the important projects undertaken in terms of infrastructure development are:

* Reduction in Internet bandwidth costs from $ 60,000 to $ 6,000 p.m / 2Mbits for software companies, educational institutions and call centers.
* Delivery period for leased line reduced to 4-8 weeks from several months.
* Universal Internet Access from 29 cities in August 2000 to over 350 cities / towns.
* PTCL is planning on leasing a 155 Mbps Internet backbone which would be available to users by June 2001.
* Internet delivery on Cable TV has been permitted which would result in substantial increase in Internet use.
* Simplified registration process for setting up of call centers.
* DSL deployment in local loop for broadband Internet access project initiated.
* Educational Intranet being set up.
* Long awaited mobile phone service of PTML (Ufone) launched on 29 January 2001 with overwhelming response from the public.
* Calling Party Pays (CPP) regime introduced for the cellular industry to accelerate the growth of mobile phones.
* PTCL's prepaid card service launched.
* VoIP Project being finalised.
* The concept of speclal discounted package was introduced during Ramzan and Hajj season for domestic long distance and international calls.
* License processing time period for telecom services reduced to 7 days from severai months.
* Local call radius in Karachi and Lahore increased to 35 km.
* Balochistan connected to the nationwide fiber optic backbone network.
* Infrastructure for IT / ISPs (PRIs and Digital Cross Connect) being enhanced by PTCL.
* Customer care and new billing solutions system being launched by PTCL.
* Approval of NTC Project to provide infrastructure for e-Government initiatives.

De-regulation and increased private sector participation is a key objective of the Government policy for telecommunications. Pakistan also stands committed to its WTO obligations and is planning to open up the telecommunication market to full competition by the year 2003. Due to the sensitivities involved, a high level task force has been set up by the Ministry of Science and Technology with representation from all key stakeholders. The task force is advising the Ministry on the best options for implementing deregulation in the telecommunication sector. It is expected that the telecommunication sector alone will see an exponential growth once the market is fully de-regulated, attracting global investment and opening up numerous job opportunities in the country.

E-Government Initiative

The E-Government initiative has been undertaken by the Government of Pakistan to improve efficiency, quality, transparency in functioning of the Government and also serve as training ground for the thousands of IT professionals being trained in the country. Implementation of these projects would also provide an opportunity for local IT companies to gain experience in domestic projects before they are able to vie for projects in the export markets. Major initiative underway on the E-Government front are:

* Preparation of E-Government architecture and identification of projects to be undertaken in 2000 - 2002.
* Training of Government Officers and officials in IT.
* Consultants being appointed at Karachi, Lahore and Islamabad to help in preparation of IT projects for provinces.
* E-Government Master Plan ready for approval and implementation.

E-Commerce Initiative

The developed world is moving towards a paperless economy and for countrles like Pakistan to be able to participate in the global economy, it is imperative for us to develop an electronic commerce infrastructure so that business can be conducted via electronic means. Initiatives in the realm of E-Commerce can be summarized as follows:

* Internet Merchant Accounts allowed by the State Bank of Pakistan.
* Awareness and training programme of stakeholders for E-Commerce implementation in Pakistan launched.
* Project for Enabling exchange of Electronic Commercial documents by stakeholders.