Envisioning a digital future
The initiation of Raast, a person-to-person digital payment system for instant digital transactions, is an important initiative that will help boost the incumbent government’s vision of a digital future. It will also provide a great service to the masses by giving them the opportunity to transfer money instantly through their mobile phones at nearly no cost without the need for constantly providing account details. The aim is to see people use the service for buying and shopping without the need for cash or card. This will be particularly useful in cities such as Karachi where crime rates have surged and bank/ATM robberies are on the rise.
However, it will still take some time for wide-scale inclusion as the digital infrastructure of the country is still pretty poor, especially in remote and underdeveloped areas. The real challenge will be to convince small businesses and shop to first transition towards a hybrid system before going totally digital — this is when the initiative will truly be successful. If the expectation is to develop the transaction infrastructure and digitise financial services then the government is indeed on the right track. But if the government wants to significantly increase the tax net by incorporating people within the formal economy, this will be of little help. The truth is that the government has not been kind to the informal sector as seen through anti-encroachment drives. If Prime Minister Imran Khan is able to initiate a project whereby the informal sector — which includes small-scale informal businesses, street vendors, etc — are slowly transitioned into the formal sector through a separate policy and system, the Raast programme can combine with it to achieve amazing results and increase the overall GDP of the country.
There is a need for the government to tweak its strategy to favour the lower-end of the population if it wants to achieve worthy long-term results. Success cannot be achieved through isolated projects and every initiative must either build on or revamp existing structures.
Published in The Express Tribune, February 18th, 2022.
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