Technology, the last of our survival
By: Sani-e-Mehmood Khan
Sep 17 - 23, 2001
Pakistan's down trodden economy is the single root cause for the adversities that the ordinary man faces today. While a lack of clear vision, and belief in an ad-hoc system are the other symptoms. Our country is facing fixed financial constraints, and is passing through a very critical span. The debt servicing chews-up around 34% of our annual revenues. This demands agile attention along with hectic and nerve shattering efforts in right direction as we need a series of major break-throughs, which could only be attained with proper planning and execution.
This Socio-Economic scenario is not only going to remain confined up to the extent of mere financial adversities. It has the potential to cease our existence as a nation. Like, today, we are not accepted as a credible nation. Alluding to a report published by some American Intelligence Agency that 'Pakistan will cease to exist by the year 2012'. All leading newspapers of Pakistan had published that report by mid August-2000. It is my humble opinion that Americans are not magicians. If any one, cares to pay attention, they can easily predict that a nation, which is growing more than 3% per annum, with exceptional, raise in religious and ethnic differences. Moreover, high inflation with no material gain in GDP is the clear signs that we are going to have grouper's gangsters by the next few years.
The Socio-Economic emancipation of the masses lies in the revival of core areas/economy sectors, which have the potential to lift the economy. The government cannot afford to have aggressive strategies, as it does not have ample resources to lease life for all its devastated economy sectors.
Our national ability to predict and control the future could be enhanced provided the government puts key emphasis on the revival of Information Technology and Textile Sector. These sectors have all the potentials to curb the emerging crises and pave the way for the development of this country's depleted economy.
Technology Sector: In the field of Information technology our whimsical desire to match Pakistan with India is like a farmer's wish to reap without seeding. India's current position in the global e-market is owing to its policies of mid seventies. We recognized the software industry's potential after India had attained the position of second largest software exporter in the world. Let's accept the fact that we are late starters as compared to India. Still information technology has made great inroads in Pakistan. Today with around 300 registered software houses employing around 10,000 professionals, it is recognized, as perhaps the only industry that can iron out the prevailing fix financial constraints, and provide for Pakistan's development needs by earning valuable foreign exchange.
Our place in global software market: The United States continues to be the most information-enabled economy in the world. The developing countries in Asia are catching up to the old industrialized countries in Europe, with the help of Software Industry. The software industry is human intensive requiring a small infrastructure. As a nation, we have bright and sharp minds that have proved their worth in the US, and in other parts of the world. Moreover, we are a nation of young, ready to learn and are ready to work long hours with 15 State owned Engineering Universities and about the same number of Private institutes producing about 6,000 IT engineers/programmers every year, forming a highly skilled and economical workforce proficient in English. In terms of sheer numbers, our 38% literate population is more than the population of some Scandinavian countries. We have state of the art digital telecommunication facilities, a telephone network capacity of 4 million and over 130,000 Internet users, yet we have not been able to ascertain any significant position in the global software market.
Consistent Government Policies: The core issue remains the question of our credibility and assurance for the continuity in our policies. India provided free land, tax holidays, and sense of security to the Software Industry pioneers back in mid seventies. On the contrary, we took years to recognize 'Software as an Industry'. There is a dire need to invest in on long-term basis, assuming return of investment (ROI) by the next two decades.
Pakistan's Information Technology Industry has a vacuum of experienced Professionals, which is the key reason why our IT Industry is not developing.
As compared to International standards, in terms of the number of Internet accounts the Internet population of Pakistan may be small. Furthermore, considering there are around 4 million telephone subscribers, an educated population that is greater than the population of some Scandinavian countries, the potential market is large. Though the India is the fastest IT growing industry with a mammoth population of over a billion people, at the same time this happens to be a fact that more than 70% of Indian population remains below the poverty line. Whereas Pakistan, with over 140 million thin population each having 483 US$ per capita income and 38% literacy rate, and the best telecommunication infrastructure reflects that Pakistan can beat India at any time, provided it continues to hold its Information Technology Policy like it is holding its nuclear policy.
E-Market and M-Commerce perception: Business via E-Commerce or no business! That is the adage that Asia's emerging E-leaders are internationalizing these days. E-Commerce and M-Commerce is likely to grip the world economy and global market when free trade system becomes effective by the year 2004. Therefore, it is important that the key decision makers, planners, and genuine intellects visualize the impacts and requisites of this free trade system. It is an obvious fact that free trade system is going to be based on E-Market concept, this opens room for two core areas which could help in promoting / lifting the economy.
* The M-Commerce solution development
* Export / import via m-commerce
The M-Commerce Solution Development, A Coral Island: There is a swift increase in the number, size, and volume of E-Markets, and the induction of free trade system is going to be another factor which adds to the growth rate of E-Commerce. There is going be a shift-over of existing business models to M-Commerce enabled business model. Many large enterprises have already shifted to an M-Commerce, and a lot more are to be shifted by next two years. Pakistan, with proper planning and execution can make a viable breakthrough by producing a 'Coral Island' where you have only Pakistani technologists who deliver and develop only M-Commerce based solutions, and focus on grabbing world software market by the years 2004. This all requires proper planning and execution, and a deep sense of spirit, which is not manned, by any sense of rooted apprehensions about abeyance in this core project.
We can do that as we have a solid spirit for M-Commerce, it is worth noting that there has been cyber "commerce" in Pakistan which dates back to the days of off-line Internet i.e. e-mail (circa 1993), when service providers were offering facilities similar to that of classified Ads. Although off-line advertisement services are still being used, but times have changed. Today there are some Pakistani "flavored" E-commerce vendors, but no "true" Pakistani vendor i.e. those accepting payments in Pak rupees and offering prices which make an online purchase much more than just a onetime experiment.
All we need is infrastructure, and proper planning for M-Commerce.
Export/Import via M-Commerce: We are definitely going to be big losers, if we do not adhere to the word on the street about business and commerce, which is M-Commerce. Free trade system in on and after 2004 is going to shift the import / export business to E-Commerce or M-Commerce.
The mechanics of E-Commerce i.e. i) Security (ii) Privacy (iii) Authenticity and (iv) Recourse cannot be implemented in Pakistan without addressing local traditions, values and culture.
The market is wide open, but then there are certain impediments, which need to look into before embarking with any online trading concern in Pakistan.
Textile Sector: The textile industry happens to be the largest economic sector and biggest source of foreign exchange revenue of the country. Being the largest single industry, it accounts for approximately 19% of total value added by industry and absorbs 42% of workforce employed by manufacturing industry. The Industry is not only catering to the entire local requirements but also sharing over 65% of the total foreign exchange earnings.
The Textile Industry of Pakistan would suffer a huge draw back when free trade system becomes effective by the year-2004. The basis of WTO agreement is the premise that "Free trade is good for all". WTO agreement provides opportunities and at the same time threatens Pakistan's Textile Industry with titanic challenge. Pakistan's Textile Industry is only surviving because of quotas implemented by various countries, once these quotas are removed on the basis of free trade system, Pakistan would stand nowhere due to low quality products and high prices as compared to competitions.
The depleted economy is one way of looking at the overall decaying state of textile sector. We need to embark on excessive marketing for our textile products in the international market. The induction of e-commerce in world trade has contributed in shifting of business from less technological enterprises to latest technological enterprise.
Things are likely to improve provided the Government takes into account the listed factors belows:
*The real shortcomings in the growth factor are the neglected value addition, lack of technical advancement, lack of marketing of textile goods on Internet, and lack of skilled labor force. These are the reasons that Pakistan's market share is gradually being taken away by our competitors.
*The share of man made fiber in total consumption worldwide is 55% and is expected to be 70% by next ten years, while in Pakistan the share works out to be 18%.
*The taxation scenario in Pakistan has worked against the exporters and spinners. There are presently more than thirty government agencies collecting over fifty different government levies from down trodden textile industry. The productivity per man-hour has no match to any other country producing textile and made ups. Not only this but the additional burden on cost of production on account of sale tax and multiplicity of other taxes are also unmatched in the world.
*Pakistan's share in global trade amounted to US$5 billion or 1.6%. The period ranging between 1980 and 1995 remained golden, as Pakistan textile exports picture looks marginally brighter as it exports rose by 500%.
The major competitors for Pakistani exports are Bangladesh, China, and India. Pakistan's yarn is considered to be of superior quality than that of these counterparts. The Government must take serious note of improving quality of Indian textile product, and should establish quality assurance and control management regime in the textile sector of Pakistan by inducting new regulations.
The Government needs to launch a textile information portal with key emphasis on the concept of value addition, and creating a direct link between an outside world buyer and basic service provider/re-seller of raw/finished textile goods inside Pakistan. An excellent, well managed textile portal has all the potentials to double the textile exports of Pakistan, which can only be fulfilled by means of government co-operation, and due sponsorship to the project.
The Textile portal should provide the listed basic services to international buyers:
1. Have all textile-related information at one platform.
*A directory of all exporters of textile goods from Pakistan
*Listed companies in Pakistan's stock exchanges, and APTAMA
*Provide list of small value added re-sellers of finished textile sector goods
2.Provide latest and authenticated information regarding textile sector
*Latest review of quota utilization
*Ranking of top ten companies on the basis of EPS and other financial characteristics
3.Provide back end communication and order processing services via M-Commerce technology
*Provide discussion boards for financial / textile sector analysts, and expatriates.
*Provide electronic mailboxes to all Pakistani exporters of textile goods
*Create a textile chat group
If we were able to portray our textile product in the order of today's marketing regime, than it would surely lift our textile export. Not only this, it would create an impression worldwide that Pakistan is a viable state with true e-perception.