Pakistan Ranks Lowest in Regional Ranking for Digital Development

Pakistan lags on most digital development rankings relative to regional comparators, notably on digital infrastructure (connectivity), digital government and the enabling environment for the digital economy, says the World Bank. Official documents of the World Bank, a copy of which is available with ProPakistani, reveal that despite an efficient regulator and an open licensing regime, Pakistan is facing many forms of digital divides—in terms of access to connectivity, economic opportunities and digital skills.   The report noted that there are 194 million cellular mobile subscribers and 124 million internet users. However, the vast majority rely on 3G/4G connections for using the internet and fixed broadband penetration is only at about 2 percent of households, limiting data-intensive business and service delivery opportunities. Investments in fixed-line broadband are expected to continue at a slow pace only in affluent localities, which will further exacerbate geographic inequalities. Infrastructure sharing is limited, which results in higher capital and operating costs, further limiting network expansion. Foreign direct investment in the sector—which for nearly two decades was one of the bright spots in the economy—has also declined in the previous four years. The documents further revealed that overlapping jurisdictions and disparate planning requirements at various levels of government related to right-of-way (RoW) permissions have also constrained and increased the cost of deployment of fixed broadband networks. Reforms for improving the policy and regulatory environment, as well as improving the capacity of key institutions in implementation of policies particularly for processing permissions for the RoW are much needed. The documents also noted that Pakistan demonstrated recent bright spots in digital government services – such as the successful use of digital technologies to rapidly deploy the Emergency Cash Program to mitigate the socioeconomic effects of the pandemic, demonstrating the power of the national identity (ID) system managed by NADRA and socioeconomic data in the National Socio-Economic Registry (NSER). Pakistan’s Instant payment system (RAAST) also offers new possibilities for digital government-to-persons payments. Furthermore, nearly 4 million citizens have been using the Pakistan Citizen’s Portal, a smartphone application that promotes citizen-centric participatory governance and serves as a nationwide grievance redressal system. These initiatives are demonstrating the potential of offering broader digital government and private services. However, a holistic approach to digital government services is largely missed, it added. The digital economy has been growing, especially in Tier 1 cities, increasing the need for connectivity, online payments, secure and trusted digital transactions. The start-up sector in Pakistan is particularly vibrant and contributes to the development of private digital services. It has demonstrated steady growth in recent years, raising about $486 million between March 2021 and March 2022. This trend is encouraging youth in Tier-2 and Tier-3 cities to form start-ups and become part of the digital economy. Various government agencies – such as provincial IT Boards, Ignite, and the Pakistan Software Export Board – are providing support to start-ups such as incubation services, skills courses, co-working office spaces, and linkages with other start-ups and investors. Ridesharing and e-commerce start-ups have created jobs in transport, delivery, and logistics businesses that are smartphone-dependent but do not require formal education. The online gig economy is also booming. Pakistan is currently the fourth largest provider of workers to online freelancing platforms globally. However, the participation of women is still limited in a country where only 21 percent of women participate in the active workforce.