KARACHI (April 10 2007): The Pakistan Software Export Board (PSEB) has prepared draft of a four-year strategic plan, which would increase the IT industry's size to $10 billion by year 2010. Under the proposed plan, eight strategic areas, with missions and annual targets, have been identified.

These include facilitation, human resource development, industry finance, marketing, office space provision, public policy, quality and telecom bandwidth provision. IT exports in 2005-06, as reported by the State Bank of Pakistan (SBP), amounted to $72.210 million, thus exceeding the target of $72 million.

This represented an annual increase of 56 percent over 2004-05exports of $46.355 million. It was also noted that the SBP reports called it revenue under telecommunication services rather than IT services.

PSEB is working with the State Bank of Pakistan (SBP) to reclassify the revenue stream under IT services, which should give a significant boost to IT exports as reported by the SBP. Information technology is the fastest growing industry in Pakistan. Starting from a relatively low base in 2003, the country's IT sector has developed into a $2 billion market.

The rapid growth of the sector is largely due to foreign IT firms setting up operations in Pakistan in a bid to reduce costs and raise profits. Moreover, Pakistan's efforts to establish a reliable IT infrastructure and the attractive incentives it offers to foreign investors have been instrumental in the development of the local IT industry. Many foreign IT firms have enjoyed great success in Pakistan.

Some of the areas in which the Pakistan government has provided benefits to the IT companies include tax exemption until 2016, seven-year tax holiday for venture-capital funds, provision of funds for software companies to get ISO-9000 and CMM-level certification, 100 percent ownership of equity for foreign investors and the development of low-rent IT parks, fibre-optic connectivity, libraries and conference rooms.

It is because of these incentives that an increasing number of foreign IT companies have chosen Pakistan for their outsourcing operations. At present, the US, Canada and Europe are the major destinations for the export of Pakistani IT-enabled services.

The Ministry of Information Technology has set a $1 billion export target for IT-enabled services by 2010 and asked China to construct IT parks in Islamabad, Lahore and Karachi on a 'build-operate-and-transfer' (BOT) basis.

Data from Pakistan's central bank show that the country managed to export more than $72 million worth of software during financial year 2005-06. Pakistan's software exports touched $72 million in fiscal year 2005-06, a record 56 percent increase compared with exports of $46 million in fiscal year 2004-05. According to a PSEB report, the top five companies that contributed the most to the IT sector were Nestsol Technologies, Ovex Technologies, TRG Private Ltd, Systems Private Ltd, and Elixir Technologies.

Pakistan has invested billions of dollars in producing IT experts. By last June, Pakistan had 50,000 workers in the IT sector and, by 2010, it will need, according to the PSEB, 232,000 trained IT professionals. Islamabad's plan to build IT parks in major cities may further accelerate the IT industry's growth. PSEB has provided an export plan to the Planning and Development Division for incorporation into Pakistan's overall export strategy and targets.
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