Internet Governance and Pakistan’s Digital Economy

Internet Governance and Pakistan’s

Digital Economy

Usama Nizamani*

Abstract
The digital landscape in Pakistan is regulated through
different legislations and public policies involving myriad
stakeholders (private corporations, government/non-
governmental organisations, think tanks and academia).
This paper attempts to identify pivotal areas that need
immediate and long-term intervention to stimulate and
move Pakistan towards becoming a digital economy. It
similarly highlights the impediments which need to be
addressed to boost digital development in the country.

Keywords: Digitalisation, Digital Economy, Internet Governance, e-

Commerce, Digital Divide.

Introduction
he term ‘Internet Governance’ includes decisions, policies,

T legislation, and regulation standards in technical and

administrative areas to keep the Internet functional. It involves
myriad actors exercising these measures from global institutions
such as the United Nations, Internet Governance Forum (IGF), Internet
Corporation for Assigned Names and Numbers (ICANN), and the Internet
Engineering Task Force (IETF) to domestic actors such as governments,

*
Mr Usama Nizamani works as Junior Consultant at the Islamabad Policy Research
Institute, Pakistan.
___________________________________

@ 2019 by the Islamabad Policy Research Institute.

JoCA  Vol. 3 (2): 23-49.

Journal of Current Affairs 23

 Usama Nizamani

private corporations, academia, technical experts, think tanks and civil

society organisations.1
In Pakistan, Internet governance is affected by policies, regulations,
and laws enacted at the national level by actors such as Ministry of
Information Technology and Telecommunication (MoITT), Pakistan
Telecommunication Authority (PTA), and the National Information
Technology Board (NITB). The government also engages with different
international multilateral forums such as ICANN, IETF, etc., as well as
the domestic corporate sector, educational and research institutes,
incubation centres, IT parks, academic institutes and civil society
organisations.
The debate on Internet governance in Pakistan is predominantly
focused on access, content regulation, infrastructure development, net
neutrality, freedom of expression, domestic laws and policies about its
functions and that of intermediaries. While these areas are important, the
current debate has so far not focused on e-governance or digital
governance and its links to economic development.
This paper looks at Pakistan’s growing digital economy and state
policies and how digitalisation can lead to stronger economic growth. It
urges investment in human development and addressing bottlenecks
related to digital governance, along with implementation of time-based
strategies and effective evaluation mechanisms that can help Pakistan
make a smoother transition towards a digital economy.
This study finds that while network coverage, access, and
bandwidth speed are critical for the latter, fundamental structural changes
to public policy and governance also need to be simultaneously
undertaken. The findings and conclusions are based on secondary sources
of qualitative and quantitative data from government reports, surveys,
policy documents, private corporate surveys, interviews, news reports,
case studies, and academic papers.

1 Laura DeNardis “Hidden Levers of Internet Control: An infrastructure-based Theory of

Internet Governance,” Journal Information, Communication and Society 15, no. 5
(2012): 720:738 (721).

24 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

History and Evolution of Internet Landscape in Pakistan

The Internet made headway in Pakistan in the early ’90s during 1992-93
when a little-known company by the name ‘Imran-net’ introduced email
services in Pakistan. Later in 1993, a project of the United Nations
Development Programme (UNDP) entitled ‘Sustainable Development
Networking Programme’ (SDNP) served as a springboard for Internet to
take root in the capital Islamabad. This initiative was an extension of a
similar project executed by the UNDP in other countries. The project
offered dial-up services and email service to users, which included
stakeholders, mostly Non-Governmental Organisations (NGOs) working
on different project areas such as education and sustainable development.
From here, the SDNP network spread to Karachi, Lahore and Peshawar.
The primary motivating reason for adoption by a growing consumer base
was ease and lower cost of communication via email than through
traditional means of fax and international dial-up services. The project
phased out when other Internet Service Providers (ISPs) entered the online
market. It was in 1995 when Digicom - a private corporation - launched
internet service in Karachi and myriad competitors such as Paknet,2
Brainet, Cybernet, Breezenet and COMSATS joined the race.3 By 1996,
the Pakistan Telecommunication Authority (PTA) was set up by the
government as a federal body to regulate policies and functions of telecom
and the Internet.4
In 2001, the first broadband Digital Subscriber Line (DSL) was
launched by Micronet Broadband, followed by the ‘first alternate
submarine cable linking Karachi to the United Arab Emirates (UAE)’ in
2006. In the same year, Nayatel launched the first Fibre-to-the-Home

2 Paknet, a subsidiary of the state-owned Pakistan Telecommunication Ltd (PTCL) started

offering internet services for 14.4 to 28.8 kilo bytes/second (kbps) in Karachi, Lahore
and Islamabad.
3 ISPAP “History of Internet in Pakistan,” Internet Service Providers Association of
Pakistan, accessed September 15, 2018, http://www.ispak.pk/internet_pakistan.php.
4 PTA, “Pakistan Telecommunication (Re-Organization) Act, 1996 with 2006
Amendments (Islamabad: Pakistan Telecommunication Authority), accessed April 15,
2019, https://www.pta.gov.pk/media/telecom_act_170510.pdf.

Journal of Current Affairs 25

 Usama Nizamani

(FTTH) connections in Islamabad. However, it was the state-owned PTCL

which launched broadband DSL service nationwide.5
At present, Pakistan has eight undersea cables which, in comparison
to other countries, is a very small number. For instance, India has 17,
while Singapore has 23, Thailand 10, Taiwan 11, and Japan has 20. Given
the constant disruptions to undersea cables, this number needs to be
increased in Pakistan. PTA is of the view that offering further Long
Distance and International (LDI) licensing will attract investments in the
digital infrastructure, such as Optical Fibre Communication (OFC)
network, undersea cables, and also improve cross-border connectivity.6
In 2017, Pakistan was connected to the new Asia-Africa-Europe
One (AAE-1) subsea cable. The AAE-1 consortium will manage the cable
with PTCL. This subsea cable’s design capacity offers 40
terabytes/second of internet bandwidth.7 The second undersea cable
Pakistan East Africa Cable Express (PEACE) is being built by Chinese
firm Huawei Marine and being funded by Tropic Science, while it will be
managed by telecom giant Pacific Century Cyber Works (PCCW) Global
from Hong Kong, while in Pakistan the local landing and connectivity
partners are Jazz and Cybernet. The subsea cable will have two landing
points in Pakistan - one in Gwadar and the other in Karachi. It will offer a
bandwidth of 60 tera bytes/second. Similarly, an OFC network was
inaugurated in 2018 which connects ‘Rawalpindi with Khunjerab on the
Pakistan-China border at an altitude of 4,700 metres, the highest fibre
cable project in the world. The optic fibre cable will provide direct
connection between Pakistan, the Middle Asia and East Asia and
minimise the risk of disruption to international traffic.’8 This OF
network will be managed by the Special Communication Organization

5 Amin Yusufzai, “Pakistan has the Least Number of Undersea Cables in the Region:
Report,” ProPakistani, August 2, 2017, https://propakistani.pk/2017/08/02/pakistan-
least-number-undersea-cables-asia-report/.
6 Tahir Amin, “PTA reveals Lowest Number of Connectivity with Undersea, Cables,”
Business Recorder, August 4, 2017,
https://fp.brecorder.com/2017/08/20170804205158/.
7 “Pakistan Gets New Submarine Cable with Design Capacity of 40 TBs per Second,”
ProPakistani, June 29, 2017, https://propakistani.pk/2017/06/29/pakistan-gets-new-
submarine-cable-design-capacity-40-tbs-per-second/.
8 Zafar Bhutta “Optic Fibre Cable Connecting Pakistan, China to be Inaugurated Today,”
Express Tribune, July 13, 2018, https://tribune.com.pk/story/1756458/2-optic-fibre-
cable-connecting-pakistan-china-inaugurated-today/.

26 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

(SCO), a telecom organisation operated by the MoITT, and maintained by

the Pakistan Army. The project is worth USD 44 million, with 85 per cent
of concessionary loan procured from Exim Bank of China, installed in
collaboration by SCO and Huawei.9
There is increasing realisation to diversify alternative sources of
internet infrastructure available in order to avoid disruptions to service
which results in economic losses for businesses. The alternative OFC
network seeks to reduce reliance on undersea cables connected with
India.10 These cables include AAE-1, South East Asia-Middle East-
Western Europe 3 (SEA-ME-WE 3), South East Asia-Middle East-
Western Europe 4 (SEA-ME-WE 4), and South East Asia-Middle East-
Western Europe 5 (SEA-ME-WE 5).
In 2014, the government undertook bidding for 3G and 4G Long
Term Evolution (LTE) licensing in order to scale up mobile internet
access and penetration. Service providers, such as Zong and Warid, were
able to secure 4G licenses, while Jazz-Mobilink, Telenor and Ufone
secured licenses for 3G. The auction exercise by PTA helped generate
nearly USD 1.1 billion.11 Later in July 2017, Jazz-Mobilink secured the
license to operationalise its 4G services at USD 324.5 million.12 This
development helped pave the way for mobile companies to increase
penetration of mobile internet among current users. This helped expand
mobile internet users (subscribed to 3G and 4G) to 59 million users by
October 2018.13
By 2020, Pakistan is aspiring to become the first South Asian
country to operationalise 5G mobile internet.14 Infrastructure development

9 Zafar Bhutta “Pakistan-China Fibre Optic Cable to Start Functioning by Year-End,”

Express Tribune, September 16, 2018, https://tribune.com.pk/story/1804386/2-pak-
china-fibre-optic-cable-start-functioning-year-end/.
10 Jahanzaib Haque “Exclusive: The CPEC Plan for Pakistan’s Digital Future,” Dawn,

March, 22, 2019, https://www.dawn.com/news/1361176.

11 Sohail Iqbal Bhatti “$1.1 Billion raised from 3G, 4G Auction,” Dawn, April 23, 2014,

https://www.dawn.com/news/1101760.
12 Jamal Shahid “4G License Formally Handed over to Jazz Pakistan,” Dawn, July 1, 2017,

https://www.dawn.com/news/1342511.
13 PTA, “Telecom Indicators,” (Islamabad: Pakistan Telecommunication Authority),

accessed September 25, 2018, https://www.pta.gov.pk/en/telecom-indicators.

14 PTA, “Annual Report 2017 - International Internet Bandwidth,” (Islamabad: Pakistan

Telecommunication Authority, 2017), 20,

https://www.pta.gov.pk/assets/media/ann_rep_2017.pdf.

Journal of Current Affairs 27

 Usama Nizamani

such as lit/equipped international internet bandwidth has led to overall

improvements in connectivity in the country (Figure 1):

Figure-1
Comparison between Lit/Equipped Internet Bandwidth with
Used International Internet Bandwidth

Used Int. Bandwidth

Source: PTA, “Annual Report 2017 - International Internet Bandwidth,”

(Pakistan Telecommunication Authority, 2017),
https://www.pta.gov.pk/assets/media/ann_rep_2017.pdf.

However, connecting Pakistan with hi-speed internet along with

converting this opportunity towards making the country a competitive
digital economy is challenging. The next section will provide a cursory
appraisal of Pakistan’s digital policy and areas critical for economic
development.

28 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

Pakistan’s Digital Policy 2017

The government in 2017 announced the ‘Digital Pakistan Policy’, which
was approved in 2018 by the Federal Cabinet.15 The policy document sets
forth multiple ambitious policy objectives, including promotion of sectoral
digitalisation; youth and girls empowerment through ICTs; improving
international ICT ranking; promoting innovation and entrepreneurship; e-
governance; and increasing foreign and domestic investment. The policy
document is divided into four parts - the first part discusses the key
measures to be undertaken by the government. The second identifies
different sectors which require digitalisation, and centrality of
technologies such as IoT, financial technologies, artificial intelligence
(AI) and robotics. The third and fourth parts deal with fiscal and non-
fiscal incentives for the IT sector and policy implementation.
This strategy document could have been comprehensive had it
included time-bound and condition-based action plans. Despite the fact
that the document alludes to the need for action plans, it fails to account
for judicious coordination between government departments for
implementation. Moreover, without time-specific plans, stakeholders will
be unable to hold policymakers accountable, leaving little room for
transparent monitoring and evaluation of the overall policy itself. This
makes the entire policy-making process a bureaucratic exercise rather than
an actual desire for accomplishment of policy objectives.
That being said, formalisation of a digital policy sits well with the
emerging digital economic growth trends in Pakistan. In a joint study,
Groupe Spéciale Mobile Association (GSMA) and the World Bank, found
that 1 per cent increase in mobile penetration positively increases ‘GDP
growth by up to 0.28 percentage points’. Domestically, mobile penetration
currently stands at 73.24 per cent, whereas mobile internet penetration
jumped from 19.2 per cent in 201516 to 28.73 per cent in 2018,17 which

15 “First Ever Digital Policy of Pakistan approved by Federal Cabinet,” Tech Juice, May
24, 2018, https://www.techjuice.pk/first-digital-policy-pakistan-approved-federal-
cabinet/.
16 PTA, “Annual Report 2017-Digital Landscape of Pakistan,” (Islamabad: Pakistan

Telecommunication Authority, 2018), 1-7,

https://www.pta.gov.pk/assets/media/ann_rep_2017.pdf.
17 PTA, “Telecom Indicators.”

Journal of Current Affairs 29

 Usama Nizamani

indicates an annual rise of over three per cent in mobile internet

subscriptions.
23 per cent of Pakistanis have bank accounts, while the State Bank
of Pakistan (SBP) aims to expand the number of account holders to 50 per
cent, including 25 per cent female adults with a formal account by 2020.18
For accomplishing this target, the SBP is working to launch its Asaan
Mobile Account (AMA) application. By using this mobile application,
account holders will be able to make a transaction of PKR 30,000. The
government plans to have 50 per cent subscription in the first two years.
This application was supposed to be operationalised by December 2017,
however, its launch is now rescheduled for a future date due to delays in
licensing, submission and reviews of business proposals.19 This lackluster
display of commitment by the SBP is problematic since the project has
significant potential provided it taps the targeted consumer base.

Key Areas for a Digital Economy’s Growth: Pakistan’s Case

Driving the digital economy under the existing Internet governance
structure requires paying attention to some key areas for broader
interventions and coordination to drive economic growth. Some of the
most important areas for growth include: Pakistan’s IT exports and
growing e-commerce industry, along with the inclusion of girls and
women in the digital economy.
Growth in IT exports from Pakistan will expand the job market, and
revenues for both the financial sector and the government. Similarly, a rise
in e-commerce will provide businesses the opportunity to increase
productivity, and encourage the government to strengthen small, medium
and large business enterprises in the country. It will also allow the
domestic economy to alleviate existing unemployment, increase the size
of the middle class, and affect upward mobility.
Another important area is inclusion of females in the digital
ecology. Educating and empowering women will not only affect a change
in the economic muscle, but will also bring change at the societal level.

18 “No Stability without Financial Inclusion,” Dawn, August 15, 2018.

19 Shahid Minhas “FBR Completes Working on Asaan Mobile Account (AMA) Scheme,”
Customs Today, October 9, 2018, http://www.customstoday.com.pk/fbr-completes-
working-on-asaan-mobile-account-ama-scheme/.

30 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

Pakistan’s female demography represents about half of the country’s

population, and empowering them through digital technology will
improve the country’s economic growth.

IT Exports and E-Commerce

Pakistan’s IT sector has grown incrementally over the past few years
courtesy of its exports. In 2016-17, Pakistan’s IT-related exports stood at
USD 3.3 billion. In 2018, IT exports touched the USD 5 billion mark,
including unaccounted for IT exports. Experts anticipate that exports are
likely to grow up to USD 6 billion by 2019. 20 This growth in the IT sector
is happening in software development, financial services, consumer
goods, and IoT. It is reported that enterprise softwares have witnessed a
rise of 17 per cent; financial services of 13 per cent, followed by
consumer goods at 9 per cent; retail or e-commerce at 8 per cent, IoT and
hardware at 7 per cent, with healthcare and media at 4 per cent
respectively, and non-profit services and products at 3 per cent.21
In order to sustain this growth, the government and private
institutions have set up incubation centres with the help of higher
education institutes and dedicated IT bodies across major urban cities of
Pakistan. So far, there are 18 incubation centres functioning in Karachi,
Lahore, Islamabad, and Peshawar. Most of these centres provide space to
budding tech-entrepreneurs, programmers and start-ups. The expanding
base of incubation centres is a positive sign for influx and growth of tech-
based innovation, IT exports, and e-commerce.22
A study by the SBP also found that e-commerce merchants had
risen 2.6 times, and e-commerce 2.3 times in a span of twelve months.23
Pakistani entrepreneurs and businesses are moving in this direction
offering services and products ranging from clothes, electronic appliances,
sporting equipment, books, automobiles, transportation services, house

20 Usman Hanif, “Pakistan’s IT Sector Advancing Rapidly as Exports Jump to $5b,”

Express Tribune, February 16, 2018.
21 Ibid.
22 Hira Saeed, “List of Startup Incubators in Pakistan,” Pakwired, November 30, 2017,

https://pakwired.com/list-of-startup-incubators-in-pakistan/.
23 SBP, “Payment Systems Review, October-December, 2017 (Quarter-2, FY-18),”

(Karachi: State Bank of Pakistan, 2017), accessed April 16, 2019,

http://www.sbp.org.pk/PS/PDF/PS-Review-Q2FY18.pdf.

Journal of Current Affairs 31

 Usama Nizamani

maintenance services, etc. Since 2016, there has been an exponential surge
in the number of e-commerce merchants registered with banks from 344
to 905.24 This vertical shift also witnessed a proportional increase in the
amount of transactions from PKR 3.9 billion in the last three months of
2016 to PKR 9.1 billion from Sept.-Dec. 2017.25 Much of these
transactions were through credit and debit cards. However, many
consumers still prefer the ‘cash on delivery’ option, and nearly 95 per cent
of e-commerce transactions are done through cash, due to lower number
of credit and debit card holders and mobile wallet accounts.26
Unfortunately, despite these promising figures, data on cash-based
transactions is missing and hence, under-represented. Therefore, the actual
volume of e-commerce transactions could be larger than presently
estimated.
In order to provide an exact estimation of such transactions, the e-
Commerce Policy Board working under the Ministry of Commerce (MoC)
could work in tandem with the private sector and the SBP to enable
inclusion of ‘cash on delivery’ data from e-commerce businesses in order
to register and analyse its actual growth.This also underscores the need for
MoC to work in closer collaboration with the MoITT. Similarly, the
MoITT will need to strategise means to ensure connectivity of people
living outside urban areas in order to increase the scale of e-commerce
transactions and consumer base for businesses. Bringing ease of
connectivity will not only allow businesses to have greater access to
consumers, but will also create prospects for new businesses to emerge.27
Bringing this extension into the digital economy will allow it to be
sustainable.
Similarly, this will also provide prospects for the private sector to
offer consumers ample incentives to use alternative forms of transactions
such as debit and credit cards and mobile wallets rather than undertaking
cash- based transactions. Offering early on incentives and sustaining them

24 Sarfaraz A. Khan, “Pakistan’s Booming e-Commerce Market is Just Getting Started,”

Dawn, March 26, 2018.
25 SBP, “Payment Systems Review.”
26 “Pakistan’s e-Commerce Market Size Likely to Hit $1Billion by 2020,” Express

Tribune, December 5, 2017.

27 Christopher Burns and Jonathan Dolan, “Building a Foundation for Digital Inclusion: A

Coordinated Local Content Ecosystem,” Innovations: Technology, Governance,

Globalization 9, no. 3-4 (2014): 33-42 (33-34).

32 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

at a varying degree across different intervals will enable businesses to

retain and reinforce use of alternative means of transactions. This practice
is also validated in empirical lessons from reinforcement-based learning in
Psychology, which asserts that the application of incentives across
intervals helps in reinforcing and retaining consumption habits. The same
will stand true for encouraging and incentivising use of non-cash based
means by consumers to carry out financial transactions as noted in
different studies.28

Empowering Women & Girls through Digital Inclusion

The sixth population census conducted in 2017 revealed that Pakistan’s
population increased by 57 per cent compared to the last population
census held in 1998. The provisional data results show gender distribution
of 106.45 million males, 101.31 million females, and 10,418 transgenders.
The increase in growth rate was noted in Khyber Pakhtunkhwa, former
Federally Administered Tribal Areas, and Balochistan in the lead,
followed by Punjab and Sindh. Whereas, 36.4 per cent of the population
lives in urban areas, the remaining 64.6 per cent live in sub-urban and
rural areas of the country.29
The UNDP’s Sustainable Development Goals (SDGs) identify
‘Gender Equality’ as the fifth and ‘Decent Work and Economic Growth’
as the eighth most important goal, respectively. The ‘Digital Pakistan
Policy’ stresses the importance of promoting use of ICT technology
among females to bridge the digital divide and to promote their
empowerment. It outlines the need to train girls under the ‘ICT for girls’
initiative in software skills for their capacity building and provide them
with an opportunity to earn a decent living. Moreover, it alludes to the
need of establishing facilities such as IT labs at school level for girls in
collaboration with the private sector. It also indicates promoting
international cooperation for participation of women and girls in the

28 Carlos Arango, Kim P. Huynh, and Leonard Sabetti, “How do You Pay? The Role of
Incentives at the Point-of-Sale,” (Working Paper Series No. 1386, European Central
Bank, 2011),
https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1386.pdf?31c5aecf9caf14915c6ad1a9
50b4a62e.
29 “Pakistan’s Population has Ballooned to 207.8m, Provisional Census Results Show,”

Dawn, August 25, 2017.

Journal of Current Affairs 33

 Usama Nizamani

digital society, and offering incentives for provision of digital services and
applications by lowering barriers to technology adoption.
Despite these provisions, this policy is likely to face challenges,
unless a consideration is not made to tackle the challenge of literacy
among Pakistan’s female population. This challenge requires radically and
drastically scaling up the enrollment of young girls at schools, higher
education, and inclusion of more female researchers in disciplines such as
engineering and technology (Figure 2):

Figure-2
Gender-wise Distribution of Enrollment from
Pre-Primary to Higher Secondary Schooling

Source: NEMIS, AEPM and MoFEPT, “Pakistan Education Statistics 2015-

16,” (Islamabad: National Education Management Information
System, Academy of Educational Planning and Management, and
Ministry of Federal Education & Professional Training, 2017),
http://library.aepam.edu.pk/Books/Pakistan%20Education%20Statistic
s%202015-16.pdf.

34 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

Female enrollment at school level from pre-primary to higher

education remains low in comparison to male enrollment. Figure 2 shows
that the proportion of female participation continues to decline after pre-
primary level. The pre-primary enrollment for female students stands at
45 per cent in comparison to male students at 55 per cent. There is nearly
5 per cent decrease in the proportion of female students when compared
with enrollments at pre-primary and higher secondary levels. At higher
secondary level, female enrollments drop to 40 per cent. Similarly, when
considering the literacy rate of Pakistan according to the Economic
Survey of Pakistan 2016-17, male enrollment remains high compared to
females, though literacy rates remain low across the country (Figure 3):

Figure-3
Literacy Rate in Pakistan (2016-17)

Source: MoF, “Education,” in Economic Survey of Pakistan 2016-17,

(Islamabad: Ministry of Finance, 2017),
http://www.finance.gov.pk/survey/chapters_17/pakistan_es_2016_
17_pdf.pdf.

Journal of Current Affairs 35

 Usama Nizamani

Also, while net enrollment for males stands lower, it remains even
more disproportionately lower for females across the country, especially
in provinces such as Balochistan where it stands at an abysmal 26 per
cent, as compared to 47 per cent in Khyber Pakhtunkhwa, 44 per cent in
Sindh and 58 per cent in Punjab (Figure 4):

Figure-4
Net Enrollment Rates across Pakistan (2016-17)

Source: MoF, “Education.”

These figures indicate that the government is unable to successfully

enroll students in their requisite age groups in the pre-primary and primary
education system.
Similarly, considering the present trends of representation, there is
an insignificant participation of female researchers in Research and
Development. Findings shared by the Pakistan Council for Science and
Technology (PCST), show that against 1538 researchers working with
higher education institutes, there are only 93 researchers working with an
R&D organisations in engineering and technology. Such patterns are also
consistently found in Social Sciences, Humanities and Natural Sciences
(Figure 5):

36 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

Figure-5
Number of Female Researchers (headcount) by
Field of Science and Sector of Employment (2013)

Source: PCST, “PCST Survey 2013-14,” (Islamabad: Pakistan Council for

Science and Technology), accessed April 23, 2018,
http://www.pcst.org.pk/wst/wst_gedu.php.

UNESCO’s report titled ‘Science Report towards 2030’ observed

Sri Lanka with highest representation of women at 41 per cent in Science,
followed by Pakistan at second with 36 per cent, India with 15 per cent,
and Nepal with 8 per cent. This finding, on the one hand, inspires
optimism, the larger picture, on the other hand, is a reminder that much
more needs to be done by the government, in order to increase enrollment
of children at schools.30
The government both at the federal and provincial level needs to
undertake an intensive social awareness drive for participation of females.
A strategy needs to be developed which consists of public outreach, public

30 PCST, “Women in Science,” report (Islamabad: Pakistan Council for Science and
Technology), accessed April 23, 2018, http://www.pcst.org.pk/wst/wst_wsci.php.

Journal of Current Affairs 37

 Usama Nizamani

awareness, and incentives for female participation and performance. For

such a strategy to be effective, an attitude-behaviour model needs to be
introduced under ‘ICT for Girls’ to identify, intervene, and modify
attitudes and consequent behaviours of families towards girls’ education,
and their contribution to the national economy. This strategy can be
harnessed under a more immaculate vision, which relies on a national
public campaign to increase enrollment for Pakistan’s economic
development.
To mitigate this challenge, the government can seek services of
NGOs that could play an instrumental role in persuading families to make
enrollment rates sustainable and prevent drop-outs at different levels of
education. Conditioning national development with individual
participation and consequent individual development will help the
government in motivating participation of the public.
Similarly, interventions to encourage families to educate their girls
in science, technology, engineering and mathematics (STEM)
programmes will bring about more female participation.
Along with this, addressing social constraints and stereotypes
must be an immediate priority of the government. It will need to ensure
application of zero tolerance on workplace harassment of women. This
will help allay concerns of families that are conditioned to see careers
under fields of engineering and technology specific to men only. An
inclusive approach, in addition, to encouraging women to pursue
STEM majors, is likely to serve as lynchpin for government’s policy
success. However, gender balance should be struck at the yardstick of
merit alone to ensure quality with increase in female researchers and
entrepreneurs.

Bottlenecks in Digital Inclusion and Governance

Bridging the digital divide is not only crucial for driving growth, but also
to connect consumers to businesses and vice versa. It also requires various
initiatives on part of the government and private corporations at different
levels. Similarly, the question of digital literacy is intrinsically linked to
overall textual literacy. While textual literacy usually requires efforts by

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 Internet Governance and Pakistan’s Digital Economy

government and the education system, it also requires taking a novel and
contextual approach to literacy by corporations to increase the number of
consumers.
Moreover, e-governance is also conditional on the presence of
necessary infrastructure and systems for effective governance and
development of digital ecology. Requisite public services will have a
correlational effect on public revenues and make it easy for private
corporations to offer the same. It will also complement a healthy
relationship between the government and private corporations.

Digital Divide & Literacy

At present, mobile penetration stands at about 153 million connections (73
per cent), however, only 29 per cent of mobile users are subscribed to
mobile internet. According to PTA, there are nearly 59 million subscribers
of 3G/4G services in Pakistan. This penetration shows that only 28.79 per
cent of the population has access to mobile data services which means
only a third of cellular users have access to the Internet via cell phones.
Similarly, broadband subscription stands at 29.77 per cent.31 Broadband
services often involve multiple users in households. However, there is
little data available on the number of connections based on households
and businesses.
The term ‘digital divide’ refers to the inability of an individual or
communities to have access to the Internet, and communication
technologies in comparison to those that do, thereby, creating a condition
of ‘haves’ and ‘have nots’. Lack of access in today’s information-driven
age entails an opportunity cost for the economy,32 and leads to inequality
in social and economic development across the population.
The afore-mentioned figures in Pakistan’s case, call for more
aggressive and renewed measures by the government to include private
corporations in provision of ICT services in order to increase internet

31 PTA, “Telecom Indicators.”

32 OECD, “Bridging the Digital Divide,” Organization for Economic Cooperation and
Development, accessed June 25, 2018,
https://www.oecd.org/site/schoolingfortomorrowknowledgebase/themes/ict/bridgingthed
igitaldivide.htm.

Journal of Current Affairs 39

 Usama Nizamani

penetration across the country. With 70 per cent of the population without
access to quality and high-speed internet services, efforts for sustainable
and equitable economic growth are likely to be impacted. The existing
digital divide also hampers the government from generating additional
revenue. Lopsided accessibility also indicates that a large segment of the
population will miss opportunities for better access to knowledge and
education available in the virtual domain.
A 2018 study noted that annual digital growth in Pakistan increased
by 27 per cent, indicating an additional ten million internet users
compared to January 2017. Moreover, active social media users’ postings
increased by 13 per cent at over 4 million, with nearly the same figures for
mobile social media users, perhaps because mobile internet speed is twice
as much as broadband internet connections. 33 The same study notes that
the country lacks a nationwide OFN as a result of which large segments of
the public are unable to have access to high speed internet. This unequal
access will also affect the government in effectively implementing its e-
governance plans.
Bridging the digital divide is not only about access and penetration.
It will also require overcoming problems associated with textual, technical
and conceptual literacy. Textual literacy is the ability of individuals
interacting with a digital device to understand, comprehend, engage and
create textual content, whereas, technical literacy is an individual’s ability
to understand and operate different technical applications. On the
technical front, introduction of touch technologies along with voice-based
responses has made interface easier. Use of visual cues from the physical
world, like handset icons, make it easy for people to understand where
they can locate a dialer for the call.34
Technical access to smart phones will be crucial for digital
migration to mobile internet connections. However, the government’s
decision to impose taxes on imported smart phones – in order to bridge the
country’s trade deficit – can increase the average price of smart phones,
33 “Digital in 2018 in Southern Asia,” We are Social and Hootsuite, accessed October 21,
2018, https://www.slideshare.net/wearesocial/digital-in-2018-in-southern-asia-
86866282.
34 Ravi Chhatpar and Robert Fabricant, “Internet Design for Emerging Markets,”

Innovations: Technology, Governance, Globalization 9, no. 3-4, (2014): 113-121 (114).

40 Vol. 3, No. 2
 Internet Governance and Pakistan’s Digital Economy

and as a result, have a relative effect on the projected average price of

smart phones.35
Issues such as high cost of data, costly internet-enabled devices,
illiteracy, lack of security and privacy, relevant content,36 and recurring
power outages37 are some of the reasons why smart phone and mobile
internet penetration is struggling to make headway in Pakistan. Along
with addressing textual and technical literacy, companies need to improve
content for users by understanding cultural context of the domestic
market.38
Conceptual literacy requires understanding general cultural
preferences of consumers in order to design, place and promote products
in a manner which is market-relevant, and simultaneously, stimulates
internet usage. To this end, conceptual literacy in developing digital
economies is gaining currency.
A World Bank study ‘Consultative Group to Assist the Poor’
found that only 10 per cent of mobile services were able to increase the
number of registered users beyond 200,000.39 The lack of adoption was
attributed to lack of understanding about conceptual literacy and
contextual cultural understanding by businesses. Case studies of five
countries Uganda, Kenya, South Africa, and Indonesia found that
businesses were not targeting cultural preferences. For example, in
South Africa savings are undertaken for funerals more than any other
thing, including medical emergencies, or higher education. In Rwanda,
people were willing to contribute their savings to projects of community
welfare. In Kenya and Uganda, rural savings were associated with
purchasing seeds and fertilizers in comparison to children’s school

35 “Regulatory Duty to be Introduced for Unregistered Mobile Smart Phones,” Dawn,

October 30, 2018.
36 Jan Stryjak and Henry James, “Country Overview: Pakistan: A Digital Future,” report

(London, UK: Global System for Mobile Communications, 2016), 13,

https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2016/12/Country-
Overview_Pakistan_Digital-Future.pdf.
37 Chhatpar and Fabricant, “Internet Design for Emerging Markets,” 114.
38 If there is enough content on the Internet in Urdu or other regional languages such as

Punjabi, Sindhi, Pashtu, Balochi, Sheena and Balti, it will be convenient for users to
interact or find value-added information.
39 Chhatpar and Fabricant, “Internet Design for Emerging Markets,” 116.

Journal of Current Affairs 41

 Usama Nizamani

education. In Indonesia, due to its exponential economic growth, savings

were closely related with the aspiration of buying a house or funding
college education. In response to this study, businesses adopted and
designed their products accordingly: e.g., businesses in South Africa
combined savings with burial and funeral insurance. In Rwanda, savings
were redesigned to cater to community goals, and in other countries,
saving accounts incentivised school fees and specific long-term plans,
such as education or medical treatment.40
Another factor that is stressed in bridging digital literacy-related
issues is to focus on digital fluency. A study by UNICEF’s RapidPro,
which provides a mobile reporting platform for community health workers
(CHWs) to monitor and track health progress of pregnant mothers, found
that most CHWs in Zambia were working voluntarily. Despite being
unpaid, the programme’s success was conditioned on providing CHWs
with a sense of empowerment and pride which motivated them to do more
to assist their communities.41
These examples underscore that studying peoples’ behaviour can
enable digital fluency. In Pakistan’s case, addressing literacy in the long
run, and in the short-run designing products, services and digital platforms
that cater for conceptual and cultural context is likely to improve internet
usage. Products should not only address questions like what is used, and
how it is to be used (behaviour associated to usage), but also ‘when and
where it is used’ (the context of usage), along with the purpose (why a
digital solution is being used in the first place).
Moreover, incentivising, manufacturing and assembling of digital
technologies such as smart phones and other digital devices in Pakistan
can help reduce the import of finished digital products, and lead to
development, production and sales of relatively less costly local smart
phones.

40 CGAP, “What Human Centered Design Means for Financial Inclusion,” Consultative
Group to Assist the Poor, 2014, http://www.cgap.org/research/publication/what-human-
centered-design-means-financial-inclusion.
41 “Early Infant Diagnosis of HIV Infection in Zambia through Mobile Phone Texting of

Blood Test Results,” Bulletin of the World Health Organization, March 15, 2012,
http://www.who.int/bulletin/volumes/90/5/11-100032/en/.

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E-Governance Issues
E-governance consists of operations which involve provision of services
and information to the public by the government through Information
Communication Technologies (ICTs) and the Internet.42 The objective is
to facilitate interaction, ensure efficient dispensation of services, and
reduce bureaucratic hurdles between citizens and the government. An
additional benefit is that ICT interface allows round-the-clock interaction
between the public and public institutions.43
There are three distinct categories of e-governance: Government-to-
Government (G2G); Government-to-Business (G2B); and Government-to-
Citizen services (G2C). It is not solely confined to interaction between
government institutions and citizens, rather, it requires close interlinkages
between different public institutions and businesses for provision of
services, troubleshooting, mitigation,44 procurement, development and
upgradation of information systems, devices, technologies and
infrastructure. Under such a mechanism, the government is mandated to
ensure sustainability, maintainability, and security of systems for
convenient and 24/7 availability.
In 2002, the Electronic Government Directorate (EGD) was
established and under the Electronic Transactions Ordinance, 2002, the
federal government moved to regularise a few public services.45 It
acknowledged provision of online services for ‘tax returns, cheques,
banking instructions, payments, employment applications, court
documents, custom documents, fee payments, academic transcripts and

42 Jeffrey W. Seifert, “A Primer on E-Government: Sectors, Stages, Opportunities, and

Challenges of Online Governance,” report (Washington, D.C., USA: Congressional
Research Service, 2003), https://fas.org/sgp/crs/RL31057.pdf.
43 Muhammad Ilyas, “E-Governance Practices and Models; Options for Pakistan,” ISSRA

Papers 8, no. 1 (2016): 43-64 (2).

44 V.M. Rao, E-governance (Jaipur: ABD Publishers, 2007), 146.
45 Aamna Rafiq, “E-governance in Pakistan: A Reality Check,” (Issue Brief, Institute of

Strategic Studies Islamabad, 2018), http://issi.org.pk/wp-

content/uploads/2018/02/IB_Aamna_February_27_2018.pdf.

Journal of Current Affairs 43

 Usama Nizamani

complaints legally.’46 In 2014, the EGD was merged with the Pakistan
Computer Bureau to form the NITB.47 The Electronic Transactions
Ordinance, 2002 was replaced by the Prevention of Electronic Crimes
Act, 2016. This law deals with crimes taking place in the cyber domain.
Unfortunately, this law lacks the requisite nomenclature for undertaking
or regulating various financial technological solutions and financial
services operating in the digital domain.
There are several e-governance initiatives spearheaded by the
provincial governments of Khyber Pakhtunkhwa and Punjab. The
Khyber Pakhtunkhwa Information and Technology Board offers e-
governance services for e-complaint systems and e-Right to Information
(e-RTI). It is also in the process of launching e-recruitment services for
candidates to apply for public positions. Similarly, there are also
provisions for online registration of First Information Reports (FIRs)
and e-filing of complaints against police officials. 48 The provincial
traffic police also offer services for online license authentication,
complaint registration, challan verification, and mobile driving license
units.49 Moreover, among its services, the KPK Government has
augmented publication and interaction aspects in its e-governance
systems. There is a list of other initiatives which are still in the pipeline.
However, other than publicising, and interacting, the provincial
government is unable to incorporate a ‘transaction and participation’
element in its e-governance systems because of the absence of online
payment solutions which could increase output.
The Punjab Information Technology Board (PITB) has also
introduced similar initiatives in Punjab with the addition of e-Khidmat
Markaz (help centre) established across nine districts. They offer one-
window services such as provision of birth, character, death, divorce,

46 Khalil-ur-Rehman Khan, “Cyber Laws in Pakistan,” International Judicial Conference,

Supreme Court of Pakistan, accessed February 19, 2018,
http://www.supremecourt.gov.pk/ijc/articles/10/1.pdf.
47 “National IT Board Constituted,” Dawn, July 19, 2014.
48 “Complaint against Police”, Khyber Pakhtunkhwa Police, accessed April 23, 2018,

http://kppolice.gov.pk/online/cap.php.
49 City Traffic Police, “Services- Peshawar Traffic Wardens,” City Traffic Police, accessed

April 23, 2018, http://ptpkp.gov.pk/#.

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 Internet Governance and Pakistan’s Digital Economy

domicile, marriage certificates; issuance of national identity cards, route-

permits, vehicle registration and transfer of ownership.50 There are also
similar proposals under consideration to introduce e-governance services
by the Capital Development Authority (CDA) in Islamabad under public-
private collaboration. These services are, however, yet to be developed,
introduced and operationalised by the government.51
Despite developments in the last few years, Pakistan’s ranking on
the UN’s e-governance survey list has been falling each year. In 2010,
Pakistan ranked was ranked 131/193 on the E-Government Development
Index, whereas it ranked 98/193 on the E-Government Participation Index.
In 2016, Pakistan’s ranking dropped to 159/193, and 114/193 in these
indices, respectively. Whereas, in 2018 Pakistan’s E-Government
Development Index slightly improved to 148/ 193, ranking on the
Participation Index fell to 115/193.52 Such reversal of gains can be
attributed to several reasons, including poor results in net enrollment of
children at school, weak literacy rates, the government’s inability to
stimulate subscription to broadband services, including failure to increase
3G-4G subscriptions which are pivotal in augmenting e-governance
services. Most importantly, there is lack of interest in harnessing internet-
based services for e-governance. This also demonstrates limited drive to
work closely with the private sector to ensure provision e-governance
services to make the interaction between the government and the public
relatively convenient.

Recommendations
As discussed earlier, the government needs to work on designing e-
governance services that are not solely focused on the textual and
technical elements of literacy, rather are developed with interactive

50 E-Khidmat Markaz, “About Us,” E-Khidmat Markaz, Government of Punjab, accessed

April 23, 2018, https://fc.punjab.gov.pk/about-us/.
51 Sadaf Khan (Director Programs, Media Matters for Democracy Pakistan) in discussion

with the author.

52 UN E-Government Knowledgebase, “Pakistan,” UN E-Government Knowledgebase,

accessed October 23, 2018, https://publicadministration.un.org/egovkb/en-

us/Data/Country-Information/id/128-Pakistan/dataYear/2018.

Journal of Current Affairs 45

 Usama Nizamani

programme interfaces which enable greater service usage by citizens in

order to remove barriers to efficient governance.
The government can also financially incentivise use of e-based
platforms by offering faster service in return to those who demonstrate the
inclination to use them, rather than those who rely on availing the
traditional means of public services. While this move is likely to ensure
digital migration of the public to adoption of technology for acquisition of
public services, it will require public officers to also embrace technology
and e-governance platforms.
The decision to embrace digital platforms holds the potential to
structurally reform public sector organisations by removal of inefficient
procedures which often cause delays in timely access to public services.
This will also enable government institutions to maintain updated records
and transparently audit performance of public institutions.
Incorporating online payment systems in e-governance based
platforms can reduce transaction time and public inconvenience of making
payments through cash-on-cash counters at public offices and in banks. It
will also increase the number of citizens public sector departments can
service at any given time.

Policy Evaluation Mechanism

The ‘Pakistan Digital Policy’ sets out ambitious goals to promote

growth of ICTs, entrepreneurship, innovation, research &
development, investment, ICT for girls, infrastructure development,
software exports, cloud computing, big data, and local manufacturing
of hardware, etc. Many of these ambitious initiatives are still in the
pipeline, while some are experiencing progress. The government needs
to design specified policy evaluation mechanisms for appraisal of
ongoing initiatives to ensure transparent, fair, accountable and just
functioning of the projects. Apart from appraising policies, it is vital to
scrutinise project designs and programmes for their revision,
adaptation and where necessary termination and replacement with
viable and relevant interventions.

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Standardisation in E-Governance

The telecom sector also needs investment in infrastructure, particularly,

completion of fibre optic cables across the entire country. Most
importantly, the government needs to encourage capacity building of the
digital immigrant work force53 for transition towards adoption of ICT by
public servants. Efforts to increase government-to-business engagement
for procurement of more online-based services require little physical
interaction with administrative systems.
Similarly, the government needs to conceptualise, design, develop,
and launch products and services for interoperability and standardisation
of e-governance services across the provinces. To this end, at the
institutional level, the NITB and under it the EGD, can be of crucial
benefit. The government needs to make the EGD functional for
interoperability of various e-governance platforms; and enact laws to
provide new powers to NITB.
Following the 18th Constitutional Amendment, the government needs
to enact laws under the Federal Legislative List Part II for empowering the
MoITT, and Ministry of Inter Provincial Coordination Division for
administration of regulations, interoperability, and penalising powers for
failure to standardise e-governance services. In order to improve
Pakistan’s deteriorating UN global rankings in e-governance, the federal
government can subject performance in terms of standardisation of e-
governance services as prerequisite conditions for the National Finance
Commission (NFC) award.

Public-to-Private (P2P) & Public-to-International (P2I) Cooperation

In Pakistan, the public sector, particularly the MoITT, along with NITB,
and provincial technology boards can further their collaboration with the
private sector, such as corporations, and higher education institutes for
promotion of entrepreneurship, inclusion of start-ups at incubation
centres, development and promotion of technology parks, particularly in
major cities.

53 Digital immigrants are people born before large-scale adoption of digital technology.

Journal of Current Affairs 47

 Usama Nizamani

Similarly, public sector departments need to collaborate with

financial institutions for provision of digital monetary services, their
diversification, development, procurement, integration and protection.
A more inclusive approach is also needed towards the academia,
think tanks, and educational institutions to initiate debate on the technical,
and policy aspects, along with a discourse on research, development and
investment. Unless a well-aware, adequately resourced academia and
scholastic culture is not harnessed, development of research-driven
internet governance ecology will remain an unrealised dream.
Furthermore, public-to-private collaboration must also have an
international tier, under which the private corporations need to be
encouraged for engaging global corporates for investment in Pakistan’s
growing digital economy.
The MoITT and Ministry of Foreign Affairs (MoFA) need to have
close collaboration with global institutions such as the IETF and ICANN
for policy input on internet content, application, and coding regulations;
law enforcement agencies, including institutes for cooperative security;
the World Intellectual Property Organization (WIPO) to find means for
evolving domestic regime for conformity with global standards on
intellectual property protection; and groups such as Commission on
Science and Technology Development. Lastly, the government needs to
enhance collaboration with the International Organization for
Standardization (ISO) for policy input at the international level.

Conclusion
Moving Pakistan towards a digital economy, under its existing internet
governance architecture, requires significant holistic and action-oriented
changes to enable and harness the actual potential of the local ITC
industry and market.
To ensure implementation of policy objectives, not only is timely
introduction of action plans central, but also effective monitoring and
evaluation. Overcoming the abysmal literacy rates, particularly of the
female population, women enrollment in science and technology-related

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fields, issues of digital exclusion and access are some of the areas meriting
attention.
Public-private partnership can be undertaken for promoting
financial inclusion, access and use of financial technologies for e-
commerce and e-payments for public services. Significant action is also
needed to develop standardised federal and provincial e-governance
platforms and services. This will enable ease of using services across the
provinces, overcome bureaucratic friction and generate public revenues
making governance in return more efficient and improve Pakistan’s
international internet governance rankings.
Lastly, the country needs to further diversify its internet
infrastructure by expanding the number of undersea cables, and cross-
border connectivity networks in order to prevent internet failures and
breakdown.

Journal of Current Affairs 49