If there was ever a time for a country to
reposition itself, now is Pakistan's time. We begin here by outlining
actions that can be taken to boost the economy and business
confidence, then turn to what Pakistan might do to improve its image
as a safe country in which to work and invest.
The economic damage caused by recent malfunctions
with the SMW3 submarine cable was aggravated by government
telecommunications policies. Those policies are still in place.
This has been a bad couple week for your country,
Pakistan. Every day brings more bad news. The worst indication is the
drop in confidence among broad segments of the business community in
Pakistan earlier this month, particularly the tech sector, which has
been growing at over 50 percent per year and represents one of your
strongest bases of support.
Whereas the world as a whole has been transfixed by
the London bombings, recent telecommunication problems that cut most
of Pakistan off from the outside world for more than 11 days have
caused widespread economic damage.
Although press coverage had previously revealed the
fragility of Pakistan's telecommunications links, most businesses in
Pakistan were caught unprepared. Last minute rerouting belatedly
averted additional maintenance outages that were set to begin on
Pakistani Internet and voice traffic traversing through Europe.
NEED FOR TELECOM REFORMS
Your government has been moving to privatize the
government-owned Pakistan State Oil (PSO), Oil & Gas Development
Corporation (OGDC), and other government or state-owned firms.
Privatization is not synonymous with economic liberalization, as we
see in the telecom sector. Regulations stemming from another era that
drive all international telecommunications traffic through PTCL are
still in place.
If there had been full telecommunications
liberalization before the recent outage, then individual firms would
not have been blocked by the government from quickly arranging for
communications backup links independent of PTCL. While the government
did a commendable job of providing free satellite backup links to
commercial call centers during the outage, other sectors of the
economy that are not stand-alone international call centers suffered
GOVERNMENTS CANNOT PICK WINNERS, LOSERS
In addition to allowing independent international
connections, Pakistan needs to lift restrictions on the use of
technologies that are well established elsewhere in the world. The
first thing that can be done is to lift the limit on digital
subscriber line (DSL) speeds from the current 2-Mb cap.
Second and more important is the question of
lifting restrictions on the use of voice over Internet protocol (VoIP)
for making telephone calls over the Internet. Those restrictions were
originally instituted to drive all telephone traffic through PTCL.
In speaking with overseas Pakistanis about changes
they would like to see in Pakistan, lifting restrictions on VoIP
outranks everything else. The ban on VoIP is a hidden tax that makes
Pakistan less competitive internationally. At a time when all major
international corporations are integrating their global operations
through VoIP, a ban on VoIP is a high price to pay for protecting PTCL.
When governments pick technological winners and
losers, everyone loses. Pakistan can be on the cutting edge of the
deployment of new technologies. Fully deregulating telecommunications
is a good first step in that direction.
To its credit, it should be noted that your IT
Ministry recently succeeded in arranging for the construction of two
separate high-speed telecommunications links. One new link will go
through India and tap into their international telecommunications
backbone, while another will be a submarine cable to a hub in France,
with connections to the U.S. and UK. Along with recently expanded
satellite links, Pakistan by the end of this year will have excess
high-speed capacity and triple redundancy that will make it a reliable
location for mission critical IT operations and a hot spot for IT
DIVERSIFY THE ECONOMY
Your government has been encouraging local
investors to venture into the international call center arena.
However, the future of customer service is not with pure-play call
centers. Pakistan arrived five years behind India in this.
"News about international terrorist attacks
and their ties to Pakistan are detrimental to the image of Pakistan as
a safe place to conduct business," said Omar Khan, head of mobile
phone software firm NetPace in Silicon Valley. Omar added, "The
government needs to do a lot more to eradicate extremist elements from
the country -- our future depends on that."
Although it is widely recognized within Pakistan
that your country is the strongest ally that the U.S. has in its fight
against terror, and that more Pakistanis have been killed on the U.S.
side than people from any other nation, your government has done
little to highlight its efforts in this regard. Consequently,
Pakistan's role goes largely unrecognized internationally.
Also unrecognized is how safe it is to travel and
work in Pakistan, and how welcoming Pakistanis are to Americans from
all walks of life. There would be more Americans who could help get
that message across if your government were to remove the one-month
limit on duration of stay for most business visas and if it were to
help make visa renewals a less arduous process.
"The recent problems with connectivity have
wreaked havoc with a number of companies operating here but we are
already seeing positive benefits emerge from the experience,"
said Ayub Khan at InfiniLogic. "There is a renewed sense of
urgency amongst both industry and government about developing a robust
infrastructure and eradicating the mountains of red-tape that have
previously stifled small business," he said.
Ayub notes that IT companies in Pakistan are now
talking openly and frankly with each other and with your government
How to develop a common strategy for the IT
How to improve quality.
How to improve the image of the IT industry.
Last Saturday morning; Ayub participated in a
meeting with managers from 10 other international IT companies in
Karachi. He reported that every person attending the meeting was not
just focused on his or her individual problems, but on not
"letting the side down."
Most of those firms have managers who grew up in
the U.S. or Europe, obtained their education and initial work
experience there, and fully understand the quality of service that
must be maintained in order to compete effectively in global markets.
Ayub said, "It is this group who will lead the next wave of
growth in South Asia."
(This on-line article was carried by E-Commerce
Times on July 19 and reproduced here on the desire of the author)