Pakistan's IT economy.

THOUGH the IT sector in Pakistan has had a rough couple of years recently, the industry's overall growth in the past 10 to 15 years has been striking. In fact, despite the recent hiccups, there has been a robust growth of IT and IT-enabled (ITeS) remittances in the past five years. According to the Economic Survey of Pakistan (2020-2021), the compound annual growth rate for IT and related services reached 18.85 per cent, the highest growth rate of any industry in the region. In addition, micro enterprises, independent consultants and freelancers contributed around $500 million to IT and ITeS exports while the annual domestic revenue exceeded $1 billion.

According to the survey, from July to February of the outgoing fiscal year, IT export remittances in sectors including telecommunication and computer IT services surged to $1.29bn at a growth rate of 41.39pc, compared to $918m during the corresponding period in FY20. Enabling government policies have contributed to this remarkable growth. These include numerous sustainable development and accelerated digitisation projects, incentives to bolster growth, including 100pc equity ownership and specialised foreign currency (FCY) accounts for IT/ITeS firms and freelancers to fulfil operational demands, thus addressing a long-standing concern of IT companies regarding the easy inflow/outflow of foreign currency.

Now IT/ITeS companies and freelancers can keep 100pc of remittances received through proper banking channels in their FCY accounts without being forced to convert them to rupees. Moreover, outward transfers from FCY accounts are also unrestricted for Pakistan Software Export Board-registered IT companies and freelancers.

However, the revelation that the IT sector carries tremendous potential is not new, though the industry remains unexploited. Google recognised Pakistan as far back as 2018 for rapidly turning into a 'digital-first country'. At present, Pakistan has the fourth-largest growing freelancers' market globally. The country is known for software development, business process outsourcing (BPO) and freelancing of IT-related services.

Despite several challenges, the IT sector has grown exponentially.

CIT and related fields have assumed a central and enabling role in the emerging dynamics of a modern society and economy. In Pakistan, the sector continues to be held back by security issues, political instability, inconsistent policies and the lack of understanding among government and...