IT sector aims for $15 billion export boost

Caretaker minister unveils roadmap, initiatives to drive innovation and economic growth

ISLAMABAD:

The caretaker IT minister states that they have laid out a roadmap to achieve a target of $15 billion in IT exports to bolster the country’s economy. Several key measures have been introduced by the caretaker government to reach this export target.

In an interview with The Express Tribune, Caretaker IT Minister Dr Umar Saif said, “Now, the roadmap is ready, and we hope that the upcoming government will continue these policies to achieve the export target.”

Key measures include introducing foreign currency retention accounts, establishing training programmes, and creating co-working spaces and a startup fund to foster innovation. Paypal has entered into a partnership with Payoneer in Pakistan to provide the facility of receiving funds for freelancers.

“A pilot project has been launched with 10,000 accounts, which will be fully launched in March,” said Saif, adding that Pakistani freelancers will be able to receive funds but will not have the facility to send funds under this initiative.

Among the key initiatives disclosed by the caretaker IT minister is the introduction of foreign currency retention accounts tailored specifically for IT enterprises. This move is expected to streamline financial operations for tech companies, thereby fostering an environment conducive to growth and investment.

“During the caretaker government, IT companies have been allowed to retain 50% of funds in their accounts for spending,” he said. “Due to the 50% retention facility, the country has seen a record boost in IT exports during November to December 2023 and January 2024,” said Saif.

If exports continue to rise at the current pace, the IT exports of Pakistan will cross $4 billion during the next 12 months.
The country has been facing a scarcity of qualified people in the IT sector, he said, adding that the caretaker government has launched a training programme for 200,000 graduates who are expected to bring $5 billion into Pakistan after enhancing their skills.

Additionally, the implementation of training programmes aimed at augmenting the IT workforce underscores Pakistan’s commitment to nurturing local talent and meeting the demands of a rapidly evolving industry.

“With the establishment of 10,000 e-Rozgar centres, the IT ministry hopes for an inflow of $10 billion into the country,” he said, adding that, “If one freelancer earns $30 daily, the government hopes one million freelancers will be capable of bringing $10 billion into the country.”

In a bid to cultivate innovation and entrepreneurship, the government is also rolling out co-working spaces and instituting a startup fund geared towards providing crucial capital for burgeoning ventures.

“We have started a startup fund to mitigate the risks of those startups that wanted to raise money. The government of Pakistan will provide a 30% grant to the startups, and this initiative will raise investment in the country,” explained the IT minister. He said that PC-1 of this scheme had been approved and the government will start receiving applications from March 15, 2024.

Furthermore, measures to allocate spectrum for 5G networks signify a concerted effort to enhance connectivity and technological infrastructure. Saif highlighted the national fiberisation policy and telecom tribunal as crucial steps in building a robust telecom framework.

“These moves aim to enhance domestic connectivity, attract foreign investment, and establish Pakistan as a digital hub,” he said.

“Internet traffic of China has been connected with Pakistan, which will work as a digital corridor to connect with landlocked Central Asian states, bringing $200 million to $400 million in revenue for Pakistan,” hoped the minister.

Additionally, the government’s proactive approach extends to satellite services, with a policy to entice providers like Starlink. Saif said that the government had taken measures to boost exports, attract investment, and strengthen technology by incentivising handset manufacturers and positioning Pakistan as a digital gateway.

“With these diverse initiatives, Pakistan is poised to seize digital age opportunities, driving sustainable economic growth and innovation,” he said.

The IT ministry has also taken an initiative to enhance exports of handsets. “We asked the commerce ministry to allow 3%-8% RD allowance for handset manufacturers to enhance exports,” said Saif, adding that, “We also wanted the approval of handset financing facility.”

He added that all initiatives taken by the caretaker government are expected to bring in $15-$20 billion into the IT sector.