Pakistan tops Asian telecom users and investment
Pakistan tops the South Asians as telecom users, and as an investment destination, several multilateral institutions and the World Bank this week said. Pakistan is leading the region in e-commerce, digital finance and branchless banking, as the campaign for the expansion of the National Financial Inclusion Strategy goes ahead.
An intense use of mobile telephony, and a range of several other equipment goes on, moving into most of the commercial, business, industrial, education, and news media sectors. This sweep is clearly seen from the shores of the Arabian Sea, next door to the United Arab Emirates, to the Himalayan heights and K-2 peaks in the extreme north of Pakistan. In those snow clad regions, home to the world's tallest mountain peaks, e-commerce sights and businesses are now springing up fast. Their Internet sees vendors busy selling fancy Pakistani handicrafts to sites as far away as Germany, Norway and Japan.
This massive transformation of the telecom and IT users goes on while Pakistan is the number one investment destination for foreign investors. This market is swiftly changing to one using all varieties of mobile telephony, telecom and ICT related services and products. Alongside these developments, the sister industries including production and assembly of computers, laptops and a wide range of IT equipment is also moving up. These production activities will expand further as the government is considering various proposals to cut down current taxes, and provide several other concessions. Included in these proposal are the ones submitted by the Pakistan Computer Association (PAC). PAC has proposed a withdrawal of some taxes and levying of fixed customs duties and taxes on IT products.
"Our proposals will encourage legal import of IT products, remove taxes relating to the Generalized Scheme of Preferences. It will provide the IT industry a level playing filed, reduce consumer prices, and cut down large scale smuggling," says PCA chairman, Munawwar Iqbal. "If the government agrees to levy a fixed tax on each IT product, it will bring Rs5.5 billion a year in the form of new revenue." Abdul Rauf Alam, president of the Federation of Pakistan Chambers of Commerce & Industry (FPCC&I) says: "The computer industry in Pakistan plays a significant role in the development and progress of the overall economy. The problems being faced by PCA and other sectors of the private sector are being discussed with Finance Minster Ishaq Dar, who is busy preparing the budget and the tax proposals for the National Budget for 2016."
The budget will be unveiled in June. Meanwhile, the World Bank Group and its 25 associates in the programme to reach Universal Financial Access -2020, of which Pakistan is a member, reported that "around six per cent of adults in Pakistan have mobile accounts as compared to South Asia's average of less than 2.6 per cent."
Pakistan also has a formal and regulated transaction account. It opens access to other financial services such as savings payments, insurance and credit, all of which can help people better manage their lives and reduce poverty. There are good prospects for both IT-mobile telephone services and banking to move ahead hand-in-hand and enjoy tremendous growth in these and other sectors, which is confirmed by the statistics.
The data indicates that 13 per cent of Pakistani adults have a formal account. Less than five per cent of women are included in formal financial sector. Some 27.5 million Pakistani adults cite distance to a financial institution as a barrier to opening a financial account. At the same time 2.9 per cent adult Pakistanis have a debit card. Already, the telecom sector is going up and up, be it in the import of equipment, new connections, innovative and art of the day technology, its private use, or its applications ranging from e-commerce to banking and fintech. The dancing numbers are in millions, the Pakistan Telecom Authority (PTA), World Bank and international data sources say.
Broadband subscribers have topped 26 million people, the PTA said. As such, the broadband penetration has gone up from three per cent to more than 15 per cent. The World Bank reports that a 10 per cent increase in high speed internet connections can boost GDP by 1.38 per cent. The arrival of broadband in Pakistan is set to have a very positive impact on its economic growth. All this shows just how fast and big the rate of dividends and profits is to all in this business of modern telecoms, and why they should come and invest foreign and domestic funds in Pakistan.