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It is important that PASHA and PSEB should work together

By Syed M. Aslam
May 20 - June 02, 2002

It's never easy to write about Pakistani IT industry mainly because there are too many loose ends. For instance, while the Pakistani software houses have been successful in craving out a niche irrespective of the fact that the collective exports from the country remains negligibly low they have failed to build a domestic base. On the other hand, we are producing a surplus of IT professionals comprising over 100,000 certificate, diploma and degree holders each year only a small percentage of which can be absorbed in the industry leaving the rest to find jobs elsewhere or to remain unemployed altogether.

In addition, awarding of mega IT projects to foreign companies by public sector companies is also a major detriment for the growth of the IT industry in general and software development activities in particular. PAGE had highlighted the awarding of mega IT project awarded to a Korean company by the central bank, the State Bank of Pakistan last year. That was in the past but the inclination to award jobs to foreign companies by the private sector companies still continues unabated despite the directive by the government to give the local software houses the preference. The latest example is the awarding of $ 3 million IT project to a foreign company Kapiti, which is represented by IBM in Pakistan, by the top nationalized bank, the Habib Bank.

So far the policy makers have been occupied with promoting the IT culture which has basically benefited the supply side, in other words the investment in imported hardware, equipments and peripherals. No doubt the drastic cuts in the wholesale internet bandwidth tariffs have also benefited the end users and universal internet access has been made available far and wide, even if in some areas the quality of service remains extremely poor. Accreditation and quality testing of IT education and institutions have also been introduced for the first time. IT industry in general and software developers in particular have been granted a range of fiscal incentives to help fuel the growth. However, much still remains to be done to create the demand side in the IT industry without which the local software industry would remain deprived of the local base, a pre-requisite for all export-oriented industries.

Talking to PAGE, Javed Naushahi, member of the Task Force on e-commerce, Government of Pakistan, stressed on the need to 'look inward' in order to create the demand side, particularly in the financial sector which can lead the way. "The financial sector is the biggest user of the IT Commerce anywhere in the world and same is also true for Pakistan. By its very nature it can play the leading role to create the much needed demand side IT here.

"The major reason for the creation of the demand side IT is that the government is very slow due primarily to the rampant red-tapism in all the related departments resisting changes that would erode their influence. For instance, the state-owned Pakistan Telecommunication Company (PTCL) has failed to automate its BCCS (Billing and Customer Care System) for over a decade. The absence of this on-line billing system has cost PTCL billions of rupees in losses.