Pakistan capable of earning $30b revenue from IT sector: CEO ImpTrax Munawar Abdullah
Govt must rationalise internet, tax rates, smooth payment mode
By M J Hayat
The financial-cum-social situation of the country seems dismal at the moment and needs emergency rescue. There is a need to make huge profitable investments so that we could compete not only with the international clientage, but also could create gainful scenarios.
This is need of the hour to create a solid and secure base in the country which may attract international investors especially in the IT sector.
Daily The Business spoke with Mr Munawar Abadullah, an IT expert and Chief Executive Officer of ImpTrax Corporation, to seek his valuable and enlightened opinion about the existing local IT industry and its untapped potential.
Mr Abdullah has travelled immensely across the globe and his vast experiences have equipped him with necessary knowledge to bring a positive change in the IT field. His keen observance and thirst for learning has enabled him to efficiently create an artificial world brimming with IT resources and their fruitful results. Meeting world leaders and catching the taste and whiffs of diverse cultures have given him experiences that can help Pakistan come out from the shadows into the light.
Abdullah started off conversation with realization of where our country stands. Currently, he says, India has products and services export worth 165 billion US dollars just in the IT sector. Ours, unfortunately, is nearly 4 billion US dollars only. He categorizes the main issues the IT sector is facing, into three main ones.
Cost of internet which is being provided to its consumers is irrationally high. A 100 Mbps of dedicated internet speed roughly costs around Rs200,000 monthly which is shamefully an extreme rip off for any party that would want to open up an investment in the IT field. USA on the other hand, provides this speed of internet in merely Rs3,000 monthly (converted to Pak rupee).
Firstly, the cost of internet which is being provided to its consumers is irrationally high. A 100 Mbps of dedicated internet speed roughly costs around Rs200,000 monthly which is shamefully an extreme rip off for any party that would want to open up an investment in the IT field. USA on the other hand, provides this speed of internet in merely Rs3,000 monthly (converted to Pak rupee). This level of vast differences needs to be settled down urgently because all new technologies require an effective internet speed. Projects based on Artificial Intelligence need to be introduced in the country to compete with the international race which is not possible without cost effective internet provisions.
Mr Abadullah admits the world is after gigabytes of internet speed and we are still scratching our heads on how to make a 100 Mbps more accessible and pocket-friendly. The world is moving ahead and we are static in our problems.
The second major issue that is faced by the solo investors is of payment gateways. The lack of a systematic procedure makes it difficult to streamline the payments coming in. In this respect, even the State Bank of Pakistan (SBP) is playing a very negligible role by not bringing about any reforms to cope up with the international standards. The investors are not encouraged to play their part when they are aware of the hurdles they will be facing at the time of payments. “There are absolutely no proper paved means for the payments to make their ways without any problems. This needs to be solved with immediate effect on a government level by the finance department.”
Mr Abadullah points out the third major problematic issue the IT investors have to confront that are high tax ratio. New incentives need to be introduced for new investors.
Giving an example of how it works around the world, he talks about the tax incentives given in Hungary. It is a single digit tax enforcement of just nine percent. The best thing about this is that it is not progressive; it is a flat single digit tax no matter the amount of profit you reach. Their revenue experienced an instantaneous increase after its implementation.
“Why would an investor come to Pakistan if there are no incentives and the law and order situation is also bleak?” According to him, the need for incentives is huge for our country because there are already no other attractions for the international investor here. Within a year, the Pakistani currency saw a decrease of 26 percent. This devaluation of the currency is not favourable to the already diminishing investment scenario of the country. The capital investment needs to be safe and secure so that the investor is comfortable enough to open up new doors of opportunities. The investing party will shy away if it fears to make unnecessary efforts in saving the capital amount along with a struggling profit.
Best thing about investing in the IT business is that it requires no raw material. It is just skilled labor that is being put in place to earn profit. It is literally like creating something tangible out of nothing.
The ImpTrax Corporation CEO says Pakistan has the capability to generate revenue of 30 billion US dollars in the IT sector very easily if these three main issues are resolved. The best thing about investing in the IT business is that it requires no raw material. It is just skilled labor that is being put in place to earn profit. It is literally like creating something tangible out of nothing.
“The reason why we are not able to resolve these issues is the messed-up law and order condition of our country. The rivalries and difference of opinion between different political parties makes things even more impossible”, he says and adds the new government will not give any importance to the ongoing positive measures and policies imposed by the previous governments.
Political parties should have to reach a mutual consensus that in no way the projects started by the party in power would be discontinued by the party coming in power later on.
He said political parties should have to reach a mutual consensus that in no way the projects started by the party in power would be discontinued by the party coming in power later on. This is the only way of ensuring that the profitable policies are not discontinued.
The government is also busy resolving the corruption crisis prevailing in the country.
According to Mr Abadullah, digitalizing all the departments will help eradicate this problem. “Pakistan has to conduct a number of business transactions and the data has never been made online to ensure transparency in the procurements,” he stated this while explaining how the procedure is done the entire world over to avoid any kinds of discrepancies. Routine based online publishing of the government expenditure and spending will surely aid in exterminating corruption. He says the reason NADRA has been able to curb the issue of fake and multiple IDs, is because it computerized all of its system. It’s entirely impossible for a duplicate or a fake ID to be created without leaving any trace or proof behind. If we can benefit from digitalization in one sector, why not take advantage in all the fields. A massive project comprising of digitalization of the departments needs to be introduced to curb corruption.
It is high time we benefit from persons like Mr Abadullah who are keen on providing the best solutions to the problems we are facing. Although he studied abroad and made a man out of himself in the field of IT, still his heart lies in Pakistan. It will be a dream comes true for him if he is able to see Pakistan come out of the problems he is facing.
He has been providing his services free of cost owing to his patriotic passions. With the same patriotism in his voice, Mr Abdullah ended on a very positive note. “I would be very fortunate if I could serve my country in any way for its growth and development.”