AN improved infrastructure, lower costs and a vast array of productivity and consumption possibilities have transformed internet usage in the country. In the Information Economy Report 2017, released this week by the UN Conference on Trade and Development, it has been estimated that 16m Pakistanis went online for the first time between 2012 and 2015, nearly 50pc of the internet usage base in the country at the end of that period. That is unsurprising, perhaps even an underestimation: the advent of 3G, 4G and higher-speed internet in the country is attracting millions of new users as smartphones in particular proliferate. Clearly, there is potential for even faster growth. A recent report in this newspaper examined CPEC-related plans for a revamped communications network in Pakistan, fibre optic connectivity with China and a new submarine landing station in Gwadar.

Growing internet usage, however, is not necessarily translating into greater gains for the country in the global digital economy. Part of the problem is a policymaking logjam. The UNCTAD report notes: “In Pakistan, in 2015 the government constituted a high-level working group to develop a Strategic E-Commerce Policy Framework for the country. The group, which has the full support of the prime minister, is led by the commerce ministry, and comprises officials also from the ministries of information technology and finance, the State Bank of Pakistan and the Pakistan Software Export Board.” Laudable as that initiative may be, the results have yet to be seen — a bureaucratic morass from which few gains are ever realised. Progress on rationalising costs and tax structures, creating genuine, stable incentives for businesses, and promoting digital financial services is slow. The problem is especially acute in the fast-moving digital economy. The global advent of the ‘internet of things’, cloud computing, big data and 3D printing, for example, has already occurred while Pakistan is yet to implement global digital payment standards such as PayPal, though there are suggestions that it may finally be implemented.

There are also concerns about the government’s ability to treat internet-based companies fairly in a system where arbitrary decisions can be taken. The possibility of banning websites at a moment’s notice, without due process or advance notice, undermines the potential of e-commerce and stable rules that allow for the deepening of the digital economy. More generally, the Freedom on the Net 2016 report by Freedom House highlighted a danger of perpetuating existing socioeconomic imbalances in the country with rural and less-well-off areas left behind the more lucrative urban markets in the race towards digitisation. As ever, the potential for a transformative change in the economy exists, but only if smarter, business- and people-friendly policies are introduced.

Published in Dawn, October 5th, 2017