Need to develop e-business environment


Aug 11 - 17, 2003



Pakistan is least prepared to facilitate e-business of 60 countries surveyed by The Economist magazine of UK. It was ranked 60th, below even Nigeria which ranked 56 and Vietnam which ranked 58 in the survey.

The e-readiness rankings are based on scores on the first round of rankings published three years ago in May 2000 by The Economist launching the e-business forum of its Intelligence unit. The importance of the survey, and its rankings particularly with respect to Pakistan, lies in the fact that e-readiness is an indicator of just how conducive a country's businesses are to exploit the Internet-based commercial opportunities. Despite the slowing down of the global economy after 11.9, the internet is still seen as the most efficient, and inexpensive, tool to keep a presence in the international market not only by individual entrepreneurs but also by the governments.

The methodology used for the rankings should give the policy makers, and all the movers and shakers in the IT, telecom, business sectors, an opportunity to look at the challenges to develop e-business culture here and to find practicable solutions. The six categories fed to give the new rankings were connectivity, business environment, e-commerce consumer and business adoption, legal and regulatory environment, supporting e-services, and social and cultural infrastructure. Needless to say Pakistan lags far behind in all of these areas, the improvement of which is necessary to upgrade its position in the years to come. Connectivity was given the top weightage of 30 per cent followed by business environment 20 per cent, e-commerce consumer and adoption 20 per cent, legal and regulatory environment 15 per cent, supporting e-services and social and cultural infrastructure 5 per cent.

Connectivity was given the top weightage obviously because the facilitation of e-business relies heavily on adequate and reliable telecom and Internet infrastructure. The quality, price affordability and availability of fixed-line and mobile telephone services are also considered as they determine the level of connectivity. The tele-density of 2.7 per cent in Pakistan, which is the lowest in the region, and the ever increasing cost of telephone usage, including metered local calls provided free in many countries of the world, and unsatisfactory quality of service are some of the major problems of the Pakistani telecom which has just one state-owned fixed-line service provider the PTCL.

The 20 per cent weightage to the business environment is a barometer of the general business climate and the Economist's survey screens 70 indicators including criteria such as the strength of the economy, political stability, the regulatory environment, taxation, and openness to trade and investment. The resulting 'business environment rankings' thus measure the expected attractiveness of the general business environment over the next five years and is calculated regularly as part of The Economist's country forecasts. These are important indicators particularly for a country like Pakistan which has a large undocumented economy and time and again has been hit by political unstability.



The e-commerce consumer and business adoption is given a weightage of 20 per cent evaluates the payment and logistics systems of a country. It is used to determine the use of creditcards and matching electronic systems for their secure, reliable and efficient electronic payment mechanisms. Once again, the negligible penetration of credit cards, the absence of plastic money culture and lack of efficient electronic payment systems are major detriments to the e-business readiness here in Pakistan.

Similarly, the country lacks in legal and regulatory framework vital to govern, and facilitate, e-business to help win points in legal and regulatory environment criteria which carries a 15 per cent weightage. The legal framework is essential for developing the e-business culture and its absence, such as here in Pakistan, is a major detriment to it. Digital signatures and virtual transactions are the two important necessities to develop e-business culture anywhere.

The 10 per cent weightage accorded to the supporting e-services indicates the importance of efficient intermediaries and ancillary services necessary to support e-business. The rankings evaluate the access that companies have to these intermediaries including website developers, e-business consultants, etc., in their respective countries.

The 5 per cent weightage given to social and cultural infrastructures evaluates prerequisites such as education and literacy rates and entrepreneurship and risk-taking levels as well as business innovation of the people necessary to a population's ability to surf the web. Despite low literacy rate, the Pakistanis have become a good surfer.

The rankings provide the decision makers in Pakistan an opportunity to take stock of their inherent weaknesses as well as strengths to take measures imperative to develop e-business environment for the overall benefit of the economy and the people. After all, the Internet provides an ideal opportunity to help the country make its presence felt on the international market scene at affordable costs.