Millennials waste no opportunity to be nostalgic about the glorious 1990s, even if the reminiscing is about simple things like random snacks, street cricket, the good old Pakistani music scene or television shows. Fun as it may be, this clinging on to the past probably echoes a broader problem — that of the dwindling economic opportunities in the country.

One can comfortably argue that it has been a lost decade. Imagine a mid-1990s fresh mechanical engineer trying to enter the job market after graduating from a good university by 2017. Unfortunately, there aren’t too many options to begin with — at least not at employers where one can gain global exposure and relevant skill sets throughout.

But well, beggars are not choosers so it doesn’t matter if the firm in question is a sethiya organisation, which basically is a glorified repair shop. If they are lucky, the starting salary may be good and the individual plans to save up for grad school applications (for even the idea of paying a portion of tuition was already outrageously expensive by then).

Within a few months, the country experiences a steep devaluation, and real income dips almost overnight. It’s a bitter pill to swallow but one moves on, only to be hit hard again over the next few years, while everything — from fuel to groceries — now costs more than twice as much. As a young individual, where do you go? Manufacturing? Everyone and their uncle knows how much Pakistan lags behind there. Finance? Well, our investment banking universe is smaller than the bonus check of a star performer in a good market. Consulting? Well, you can count the number of vacancies in Tier 1 firms for freshies. Accounting? Be prepared for half a decade of exploitation. Law? Ditto, without the benefit of having many global opportunities.

Earning in dollars, even if the job is not prestigious, is one of the few ways to climb up the ladder

Though the underlying industries or professions may differ, there is only one area where an average individual has a realistic chance of climbing up the ladder and that is to earn in dollars. Whether it’s through a lifetime of freelancing, over-employment, or finding some back office or services export firm. It may not be prestigious like those multinationals or won’t provide benefits as the banks do. But at the end of day, foreign currency salary protects you against inflation and gives you peace of mind that is probably unparalleled.

Unfortunately, the only sectors where Pakistan has been able to do this at scale are telecommunications, computer, and information services, whose exports have risen at a 10-year compound annual growth rate (CAGR) of 16.5 per cent between 2015 and 2024 to reach $3.63 billion. In the trailing 12 months, the figure has further swelled up to $2.73bn.

While the growth has been broad-based, with most major categories rising by 20pc+ double-digital compound annual growth rate, the greatest success has been found in “other computer services”, which has increased from under $60m in 2015 to over $1.4bn by 2024. According to industry insiders, this typically includes software.

This tilt is quite evident as the other major categories — software consultancy and export of computer software — are within the same theme and clocked at $1bn and $616m, respectively. Meanwhile, telecom services crossed $550m for the first during 2024, even as its 10-year CAGR was a modest 6.8pc.

‘Other computer services’ — typically including software — rose from under $60m in 2015 to over $1.4bn by 2024

On the other hand, no other category of services’ proceeds can claim a double-digit increase between 2015 and 2024. Over the last decade, the composition of our services basket has changed considerably, with all eggs now in telecommunications, computer, and information as its share has increased from 6.8pc in 2005 to 44.7pc by 2024. In fact, if you exclude the category, Pakistan’s services exports have actually plunged 11.9pc over the previous decade.

Similarly, an almost identical trend plays out in trade balance, where the broader technology sector has by far the largest surplus of $13.8bn during the last decade. The only other category that still brings meaningful forex inflows on a net basis was government goods and services, which includes the military, with a surplus of $8.5bn, while personal, cultural and recreational contributed almost $95M.

All the remaining nine categories cost the country dollars on a net basis, with transport and travel naturally causing the biggest drain on forex at $32.7bn and $12bn, respectively.

To be fair , it does make some sense for our advantage as a country is apparently the demographics. In other words, the abundance of people is exactly what the technology services industry needs. However, somehow, that same strength has not found its way through to more categories, particularly “other business services,” which include items like management consulting, accounting, marketing, and legal services.

Despite showing signs of progress in 2022 when the country out of the blue recorded a surplus of $355.3m compared to the preceding year’s deficit of $603m, the quantum has eased significantly. Though the balance has remained positive, it came in at a paltry $28.8m during 2024.

Now, one can argue that the tech sector hasn’t done as well as it should. Be it the lull growth of 2022 and mid-2023, the issue of mislabeling, or even parking funds abroad, or taxation arbitrage for employees, many issues need immediate fixing. And that’s all fair, but the bigger question at this point: will the other sectors step up?

The writer is a co-founder of Data Darbar and works for the Karachi School of Business and Leadership

Published in Dawn, The Business and Finance Weekly, March 24th, 2025