KARACHI, 19 August 2003 — Last week the 3rd Information Technology Commerce Network exhibition and investment conference, ITCN Asia 2003, opened in a climate of renewed determination to use information technology to help Pakistan move forward on the road to prosperity. Speaking to an enthusiastic audience in the packed ballroom of the Karachi Sheraton, Dr. Abdul Hafeez Shaikh, Pakistan’s Minister of State for Investment and Privatization stated that it was time for the international investment community to give Pakistan another chance.
“Help us project Karachi as a regional hub for information technology,” said Shaikh. “This country, which has been in a difficult neighborhood, should be given a second look. This economy, with a growth rate approaching five percent, is one of the highest performing in the region. Yes, we have problems such as security and weak infrastructure. Are these enough to offset the fantastic opportunities for investment? I think not.”
Shaikh was very upbeat, commenting that with the war past, regional tensions reduced and interest rates declining, the Pakistani economy was geared up for excellent growth and the time was now to focus on economics instead of politics.
Abbas Khan, director, PWC Consulting, Pakistan agreed, but he was firm in his belief that business value must be at the foundation of relationships in the IT sector between Pakistani companies and international vendors. Khan feels that fundamental changes are required in the local IT industry, with a focus on business needs, before IT will become a serious driver for the Pakistani economy.
“Whilst the Pakistan IT industry enjoys strengths in services such as software development, communications networking and hardware support, the near-vacuum between business and technology is yet to be bridged,” said Khan.
“For example, best of breed software is available, but when one asks about the implementation and integration capability of the vendors, a somewhat more realistic picture emerges.”
“For the most part, multinational IT companies offer products through local distributors who lack the ability to manage technology implementations,” he added. “Only a handful of service providers fully understand and offer crucial ‘business-side’ elements such as business process reengineering. If you believe that good technology is only as good as the quality of the implementation, the value that global IT vendors add to Pakistani organizations can be put into perspective. Simply said, you can buy any product in Pakistan but you can effectively use only a few. These are invariable signs of a marketplace learning through the trial and error approach.”
And there are some who worry that the Pakistani IT sector is not learning fast enough. Currently, Pakistan exports about $35 million worth of software annually to international markets. This contrasts with $8 billion for India, $5 billion for Ireland and $1.5 billion for Israel.
“Pakistan has been concentrating on training in IT. When you concentrate on training, you are simply churning out numbers,” explained Jeh Shyan Wong, CEO, CommerceNet Singapore and an ITCN Asia organizer. “What is needed is real life experience. The government must move forward with e-government projects to give local IT professionals an opportunity to work in a real life setting. In addition there must be greater support for small and medium sized companies because growth in the SME sector is the only way to solve the unemployment problem. It troubles me too that I continue to see Pakistani IT firms concentrating on offering low end products and services. Vision is needed to understand that the real, rapid gains can best be made by offering innovative niche market services and high end, value-added solutions.”
Pakistani university students supported Wong in his assessment. The students find it difficult to get even a toe-hold in the local IT industry. About 70 students, called “Task Officers,” volunteered to work for the organizers of ITCN Asia for the chance of being close to IT industry leaders.
“I need to get some idea about what the future is going to be like for the IT industry in Pakistan,” said volunteer Haider Shaikh. “I want to meet some of the people who are making that future in the hope that I’ll meet someone who will help me find a job. The only way for a student to get into the event is to volunteer with the organizers. So here I am, working like crazy, hardly sleeping and hoping someone will give me a chance.”
Most of the volunteers are impressive, especially considering that they are volunteers. The students do all sorts of work from filling delegate bags to meeting international guests at the airport. The truth is that ITCN Asia could not be held without them.
“Students must be serious to sign up for this event,” claimed volunteer Shahid Ali Khan. “The work is menial and the working hours are terrible. The reward is the experience and the chance for interaction with the delegates. We also get a certificate of participation. When looking for a job it will be great for me to be able to show that I was associated with the largest IT event in Pakistan.”
As an event, ITCN Asia is doing well. Speaking on behalf of one of the organizers, E-Commerce Gateway, Director, Marketing & Technology, Atiq-ur-Rehman, stated that vendors have committed several years in advance for space at the exhibition.
“This is the third time for ITCN Asia and it has been a smash hit,” said Rehman. “The first year was a start, to educate and bring awareness to the market. The second year the market was receptive but the cloud of war overshadowed the event. This year people are finding serious improvement in Pakistan’s investment climate and many delegates came to ITCN Asia on fact finding missions.”
Rehman’s assertion was supported by comments from international visitors encountered at ITCN Asia 2003.
“We consider Pakistan to be a brotherly nation and so we want to work for closer ties, especially in the area of technology development,” said Tariq Najmi, Najmi Group, Saudi Arabia. “Saudi Arabia is in need of appropriate technologies and I am looking for investment opportunities that will benefit both our nations.” Accompanying Tariq was Khalil Najmi, who pointed out that the large numbers of young people involved with the event were a pleasant surprise. “When it comes to technology, young blood is good. It brings intellect and enthusiasm. That can be matched with investment, for growth.”
The current driver for investment is Pakistan’s telecom sector. Pakistan’s Minister of IT and Telecommunication Awais Ahmed Khan Leghari declared that thanks to telecom liberalization he expected around $4-$5 billion in investment within the year.
“We have provided a level playing field for both local and foreign investors,” he said. “We have completely opened up the telecom sector. We plan to hand out the first licenses to new telecom operators within three to four months. Now is the time for investors to come forward.”
There is definitely room for growth. Telephone penetration in Pakistan is only 2.7 percent. With deregulation, international telecoms are gearing up to offer their technologies in a big way.
“Serious opportunities exist as the government is very pro-business and they appear to be willing to make every reasonable proposition feasible,” said Lee LaRue, director, Business Development, Bell Canada. “The new opportunities are more collaborative and more flexible. These opportunities rely on our technology and know-how coupled with third party funding plus regional integration models. It’s not Bell Canada sending in 1,000 employees and equipment any more. What is happening here is that Pakistan is embarking on technology transfer.”
Even those investors who came to ITCN Asia a bit skeptical, were preparing to return home with a new perspective.
“There were supposed to be five colleagues traveling with me, but in the end I was the only one who came out from Florida. The travel warnings posted online about Pakistan by the US State Department frightened the others,” explained Reggie Hall, director, Enterprise Data Solutions, Marlin eSourcing. “We are planning to set up three high-security data centers in Lahore, Islamabad and Karachi. We have done our research and the demand is here. I felt that the risk in coming to Pakistan was small and the opportunity was high. My experience this week confirms that.”
The mood at ITCN Asia was buoyant. Everyone felt that Pakistan has a real chance to prosper if regional stability holds and the government continues with its reforms.
“WTO is coming in January 2005, so there is strong interest in using technology to bring down costs and increase efficiencies,” said Dr. Khursheed Nizam, president, E-Commerce Gateway, Pakistan. “We had 330 exhibitors at ITCN Asia 2003. 40 more companies wanted space and it wasn’t available. IT events in other countries are having difficulty signing up exhibitors, but not here. Singapore, Malaysia, Canada, Japan, and the UAE are just a few of the nations that sent large delegations to ITCN Asia 2003.”
“While this event is not enough on its own to attract investment, it has resulted in frank discussion between government representatives and international businessmen,” Nizam continued. “The businessmen have advised that the government must continue its efforts to control corruption, change policies and cut red tape. Such measures are what will give businessmen the confidence to invest in Pakistan.”
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