INTERVIEW WITH SALIM GHAURI, CHAIRMAN AND CEO NETSOL TECHNOLOGIES LIMITED

KHALIL AHMED
(feedback@pgeconomist.com)
Nov 22 - 28, 20
10

PAGE: TELL US SOMETHING ABOUT YOURSELF?

SALIM GHAURI: Born in Bahawlapur, Southern Punjab, on April 12, 1955 in the working class of Pakistan, I went to Romania for a degree in Petroleum and Gas. During the four-year degree program, "Fortran" was the only course offered in computers. Being a futurist, this one course was enough to make me realise the efficacy and clout of computers. Dramatically enough, this realisation changed my perspective and defined a path for my life.

I began my career from the IT division of Citibank, Saudi Arabia. However, being a risk-taker and a man driven by a desire to learn through experience, I was bound to take a risky leap in the career; this came in the form of my first entrepreneurial venture, Gulf Computer Systems, in 1983. This IT venture was undoubtedly the highest export of IT Services. Bundled with the whole new world of experiences that propelled me to take a broader initiative and pioneer a software house that, under my unflinching and vigilant supervision, was to become the backbone of the IT industry in Pakistan. I am a father of two brilliant daughters and love to spend time with family as and when I take my time out of my international business tours. I have tried to write my luck with the sole factor of hard work, dedication, and devotion.

PAGE: PLEASE TELL US SOMETHING ABOUT SOFTWARE EXPORT FROM PAKISTAN.

SALIM GHAURI: As a matter of fact, the earnings of companies doing IT exports are much higher than the figures reported by the State Bank of Pakistan. The software exports so far are being reported to the range of US$ 300 million by the SBP. The PSEB data reveals that only 17 IT companies were registered with SBP a few years back, which has now increased to about 179 companies. The total no of IT registered with PSEB is around 1200. I think that the IT companies should register themselves with State Bank of Pakistan in order to make them visible in country's exports. The God is kind enough to our humble efforts at the NetSol Technologies in developing Pakistan's leading software brand, NetSol Financial Suite (NFS), earning world acclamation right from vertical auto manufacturing units in the USA to the emerging financial markets in the Asia Pacific while developing strong inroads in the Europe and the Middle East.

The government of Pakistan had formed a task force on ICT with me as Chairman of the task force in order to strategise how we can place Pakistan as a major player in software exports. Other objectives included the development of domestic software/ computer hardware and telecom equipment industry, development of citizen centric applications/services especially in local language, raising quality and enrollment of IT education, creating large employment opportunities in IT/Telecom, making Pakistan a major IT manpower exporter, making recommendations for the promotion of IT/Telecom sectors, suggest incentives and estimate the investment requirements for the GOP and private sector. The recommendations of ICT taskforce will go not only into the next five year plan (i.e. 2010-2015) but also to make contingency planning for reducing the impact of global economic crises on Pakistan. This policy is with the Parliament and is likely to be endorsed by the Parliament by the end of current calendar year. Once it is in place, I am seeing a big change in Pakistan's IT exports ahead.

PAGE: HOW COULD WE COMPETE WITH OUR NEIGHBORING COUNTRIES IN THE FIELD OF IT?

SALIM GHAURI: Pakistan's IT infrastructure by and large is comparable to India except for a few pockets in Bangalore etc. Our economy is struggling fast to obtain a momentum in order to generate more and more job opportunities and a stable society. It is right time for the government to have a change in its mindset in order to diversify the economy scale of the country in light of fast changing global needs and demands. The technology advancement in and around the world has changed the economic scene worldwide. Especially, these changes are being noticed strongly in the emerging economies. The technological development has started bearing fruits for many in emerging countries. Like, some 98 of the world's 500 largest firms have R&D facilities in China besides 63 in India. The leading technology multinational IBM has now more people in developing countries comparing with the United States. This relocation of multinationals in developing countries has given birth to a new kind of pace to the economies of these countries. The human resource has become a great asset of developing economies. These multinationals are not only helping with the employment of trained people who may otherwise not be able to find jobs in the part of the economy run by indigenous firms. Besides, this trend has also made possible access to new technologies to the inhabitants of these countries. The policymakers in Pakistan also needed to develop a strong realisation regarding the important role played by the information technology in many developing economies. The prime advantage of the situation is promotion of huge economic activity in respective countries.

PAGE: WHAT IS YOUR OPINION ABOUT IMPORT AND EXPORT OF SOFTWARE TO AND FROM PAKISTAN?

SALIM GHAURI: No exact idea is about the import and export of software to and from Pakistan, as a good number of companies are shying away from registration with the State Bank of Pakistan. It has put the government into a cumbersome situation on assessing real potential of the IT industry. Therefore, I have been stressing the IT companies to get register with the SBP in order to make realise the government about their real potential. The situation is changing fast and I am sure soon the real worth of the IT industry in Pakistan would be clear to everyone.

PAGE: YOUR VIEWS ABOUT PIRACY IN PAKISTAN.

SALIM GHAURI: The rising phenomenon of software piracy has put the country in danger of growing towards being a labor powerhouse instead of a solid industrial power. To shift that balance, there is a consensus that the alarming 80 percent piracy rate should be reduced to a more manageable level.

At the same time the government, and the international software developers, must recognise that, currently, many of these commercial software products are just unaffordable. At present, Microsoft Office, per processor, is approximately Rs30,000 (about $350), which represents the entire annual income of the majority of families. For most people, there is no alternative but to purchase pirated software for Rs100 (about $1). In addition, free Linux-based alternatives to Microsoft products need to be encouraged and supported by the government, and actively promoted as a viable, and legal, business alternative to Windows. This will, at least, encourage foreign investors, and put the country on the right track to develop into an attractive and competitive industrial power. Hopefully, it will also serve as an example that software piracy really isn't necessary.

PAGE: WHAT WOULD YOU SAY ABOUT TAXES AND DUTIES ON IT PRODUCTS?

SALIM GHAURI: Today, Pakistan IT industry is based on individual entrepreneurs having established concerns from their own means and resources. No tangible government support is extended to these IT entrepreneurs, either on federal or provincial level. However, one incentive of zero taxation on IT exports for 10 years by the government has played due role in shaping up the IT scene of Pakistan. It has encouraged industry to reinvest for further growth. The imposition of Reformed General Sales Tax (RGST) on computer software may have negative impact on the growth of IT sector of Pakistan. Such move may take Pakistan IT industry back to the square one. The dynamic policies of the PSEB have helped the IT industry to play on front foot in recent past but present recession in the US and other Western countries has put it again on back foot. Fate of many IT firms is hanging in the balance because of the sudden drop in sales of their software across the globe. The volume of internally used software was meager one than the exported one. Further, the snail pace automation of public sector departments in Pakistan was a hurdle in fast growth of IT in Pakistan.

PAGE: WHAT INCENTIVES DO YOU NEED FROM THE GOVERNMENT OF PAKISTAN?

SALIM GHAURI: As a matter of fact, very little credit can be given to the public sector for the growth of IT industry in Pakistan, as the automation process of public sector organisations is remained very low. The management in the public sector organisations, unfortunately, still believes in in-house IT management than encouraging private sector to automate them, which once successfully done will create massive opportunities to private sector to go globally and bring foreign exchange besides countless jobs like India. At present, strength of 100,000 employees in each Indian IT company is very common practice against Pakistan where total number of IT graduates is not equal to 100,000 even. There is a general tendency of mistrust on IT entrepreneurs in public sector of Pakistan. An absence of public sector support to the promotion of IT industry in Pakistan is making difficult for the local IT companies to get business from outside world as well. There is an urgent need of encouraging local IT industry in order to make a difference in country's economic output in next five years. The state needs to step forward with a well developed plan. This should be aimed at improving the technological base of the economy, making research and development (R&D) an important component of the activities of all enterprises, moving the export sector towards the marketing of more knowledge-intensive products, helping the farming community better their processes, move towards the production of crops for which the country has comparative advantage, and provide incentives to all firms to upgrade the levels of skills of their workers.