http://www.brecorder.com/index.php?id=5157...m=&supDate=


Pakistan may cross $1 billion IT export in three years

MUHAMMAD RIAZ

LAHORE (January 10 2007): Pakistan has started receiving global inquiries on IT services and software exports which increased from $30 million US $300 million during the last three years. It is likely to cross $1 billion mark in the next three years.

The State Bank of Pakistan (SBP) reported $75 million software exports last year. The figures do not include the amount received through informal exports. Chairman and Chief Executive of NetSol Technology, Salim Ghauri expressed these views while talking to Business Recorder on Tuesday.

India, however, estimates the total volume of IT service exports made formally and informally and even the services provided by the US and Europe- based Indians. Salim Ghauri was optimistic about a significant increase in the software exports from Pakistan. He said that once the target of one billion dollar is achieved, the next billion would be easy.

For the first time, the Western countries are considering Pakistan for IT services after China and India. Achievement of CMMI Level-5, the best standard award by NetSol Technology enabled Pakistan to be recognised in the world for IT service, he said.

He further said that IT was gaining momentum rapidly in the country. He urged Prime Minister Shaukat Aziz to declare 2008 as an 'IT year' to promote information technology in the country. The government has announced to observe 2007 as 'Tourism Year' to attract tourists. The earning of any individual working in the IT sector is substantially high as compared to other sectors, therefore, the government should attach priority to IT promotion to enable Pakistan to exploit the existing potential, he maintained.

Talking about the company's performance, Salim said that NetSol Technology was given the best performance award and has earned foreign exchange worth Rs395 million and if business carried by NetSol TIG, the sister company of NetSol Technology is included the figures would 500 million.

He was of the view that the youth in small cities are talented and intelligent but lacking communication skills. If facilities of IT education are provided at local level, they could play vital role in the uplift of the country's economy, he maintained.


Copyright Business Recorder, 2007

State bank's figure of $75 million is not accurate at all, It should be atleast close to $ 300 million as mentioned in this article. You can figure this out by looking at the job market for comp sci graduates and the amount of salary they are getting right now in pakistan. Inshallah it will continue to get better.

documentation of the economy is a problem in Pakistan. we very rarely get accurate figures for anything as lots of businesses in Pakistan are either unregistered or under-report their earnings to avoid taxation.

Good news!

Great news!

Any idea how many jobs the infotech sector is providing?

I really don't see a difference in India and Pakistan in terms of growth potential in the IT sector. But if Pakistan wants to achieve India-like IT growth.. it must go for an agressive PR campaign. pakistan still ranks low as an outsourcing destination because of its image in the US and EU (to put it bluntly). I often talking to industry here in the US about outsourcing and right now after India, it seems the philipines and eastern europe are being given more preference than Pakistan.. Pakistan must also diversify and expand its optical network, something India has done very rapidly through private companies.

I do see your IT sector growing steadily and rapidly.. But work needs to be done to make it more attractive for it to reach its full potential

I think if the govt was to carry out a detailed analysis of all sectors of our economy and then incorporate their documentation into our GDp, I wouldn't be surprised if we end up finding another $100 billion of our GDP if not more. The last time I read in one of those tax reform articles, the CBR chief said that he believed the tax collected annually was 1/4th the total amount the govt deserves. Considering this year the tax collection is touching 16 billion dolllars, so there are another 50 billion we are hiding that could change the country's fate for right now.

Its a shame.

i agree. Tax avoidance and under-reporting happen everywhere in the world but with countries like Pakistan it goes to extremes which actually harm the country's long term development. That can be reduced through legislation and enforcement of legislation but i dont think our polity is sophisticated enough to do this.

I say even if the govt has to pay big money to raise and maintain an educated and honest police force and a judiciary, its worth it in long terms. Alot of this corruption will come down when people start seeing cases beind decided in days and people going to jail for violating laws.

my sentiments exactly. The Pakistan government should completely re-model the police force and bring in specific legislation to bring down under-reporting and reduce the un-documented economy. Even if this means we must raise a separate tax for this purpose. However, this requires political will and when those at the top are not willing to pay tax then how will they enforce that further down?

But yes, from discussion I have had with people in Pakistan who understand and work within the system, estimates of the black economy or un-documented economy range from 50% to 100% of the visible economy.

thats easily another $15-20 billion in taxes.

so true..

I am a web developer my self. I work in a company where we get a handsome amount. My office is situated in clifton. But officially, our company doesnt exist.

and similarly my cousin owns a web developing company and makes a pretty decent income even by Western standars and he doesnt exist either as far as the government is concerned!

With people not paying their taxes the nation will never advance or prosper. Sadly people just point to the fact the rich do not pay hardly anything or nothing at all and will say “why should we”. There should be a taskforce that clamps down on tax cheats.

Take a look at this graph:
BBC Link

Accordingly, the top 5 countries for global IT outsourcing are:

#1 Ireland: $8.6 bn
#2 Canada: $3.8 bn
#3 Israel: $3.6 bn
#4 India: $2.2 bn
#5 Phillipines: $0.1 bn

What I find surprising is:

- How high Ireland is (roughly 4x India), and yet one hardly hears about them on IT scene. The talk is always about Banglore.

- How low Phillipines is. So are the numbers about Pak reliable?

BBC is the most anti-pakistani pro-indian news source in the west, Even the philipines global outsourcing figures are under exagerated, and I have yet to see other major players like south korea, and turkey on this list. Pakistans long term goal should be to achieve 5 billion global IT outsourcing by the end of the decade

If governemt continues the present economic policies, this target can be achieved. We have to remember that we opened our market much later then rest of Asian countries, as the world have showing trust on Pakistan's economy things would be much batter in future.

Give the correct data. From the diagram what i can make out is

#1 India : $12.2 bn
#2 Ireland : 8.6 bn
#3 Canada: $3.8 bn
#4 Israel: $3.6 bn
#5 Phillipines: $1.0 bn