THE export of services constitutes only a fraction of the overall external trade of the country. The over-reliance on merchandise exports has restrained the realisation of higher export proceeds.

We need to realise that merchandise exports alone cannot mitigate the economic woes of the country. The production of goods and services and the export of the surpluses thereof would be necessary to pay off the import bill and manage the current account deficit. The removal of barriers has made the services sector an equal partner in international arena.

Pakistan has a huge potential in the domain of Information Technology (IT) and Information Technology-Enabled Services (ITeS). It can become one of the largest providers of IT services to the world. The country has the second-largest young population which is widely computer-literate.

Moreover, Pakistan was ranked fourth in the world with respect to the freelance market. A large number of English-speaking IT professionals can market themselves effectively, as Pakistan still remains competitive in traditional IT sourcing compared to other countries in the region.

The swarms of IT companies and call centres in addition to technology parks and software houses are indicative of the country’s strength.

Besides, the start-up culture is also rising and has already started attracting investors from other sectors.

Despite all this, the country is lagging far behind in the export of IT products and services. From the current export value of $1.5-2 billion, we can easily reach $20-25bn by the end of 2030. Despite commendable steps by the government to promote the industry, certain basic issues affecting the growth of IT exports need to be addressed on a priority basis.

For instance, the services export of IT has not been made as a cardinal principle of the country’s trade policy, reflecting a bias towards merchandise exports. Besides, the government has not allowed duty-free import of fresh IT equipment and accessories. There are taxes on the import of even the used computers and components. Doing away with such taxes will improve computer and internet penetration in the country.

The country has also adopted a somewhat stubborn attitude on the IT agreement that is being negotiated on the World Trade Organisation (WTO) platform regarding duty-free trade of IT and ITeS.

The setting up of IT parks in remote areas can also increase the country’s exports as uninterrupted access to internet would lead to the development of comprehensive IT services.

Issues related to intellectual property rights (IPRs) also deserve official attention as they can create conflicts and hinder the trade. Credit and financing options may be made available to start-ups to facilitate their growth.

Most of our IT exports are meant for European and North American markets. There is a need to pay attention to a large number of destinations to optimise IT exports and earn maximum foreign exchange.

The government may assign the commercial counsellors posted at embassies the task of generating demand in their respective areas. It should also provide incentives to IT and ITeS exporters in the shape of rebates and bonuses in order to expand the prospects of their exports.

Shahid Ali Abbasi
Karachi

Published in Dawn, July 28th, 2021