ADB Drops $200 Million ICT Development Project for Pakistan

The Asian Development Bank (ADB) has dropped the “Pakistan: Integrated Information and Communications Technology Development Project” worth $200 million.

An official source told Propakistani that the project was dropped in 2019 on the request of the government, however, it is still reflected on the Bank’s website.

The proposed project outputs were:

  1. An IT park set up as a benchmark model in Karachi
  2. National IT parks strategy developed
  3. Smart city strategy developed and piloted
  4. ICT skills in the higher education stream strengthened with technological readiness for a knowledge-based economy

These outputs were supposed to result in the following outcome: strengthened holistic development of the ICT sector in Pakistan. The project will be aligned with the following impact: ICT industry contribution to inclusive growth increased, as outlined in Pillar VI of Pakistan Vision 2025. The investment is also in line with the government’s mid-term IT development policy, the Digital Pakistan Policy 2017.

The project was pending since 2017. The government of Pakistan envisaged the information and communications technology (ICT) industry as a key driver for innovation, economic competitiveness, and greater social inclusion. Through Pakistan Vision 2025, the government seeks to lay the foundation of a knowledge-based economy by promoting efficient, sustainable, and effective ICT initiatives through the synergic development of industry and academic resources.

Due to the large youth bulge in its demographic profile, Pakistan has strong digital potential to develop a knowledge-based industry fostering innovation and modern entrepreneurship. As per the draft Digital Pakistan Policy 2017, Pakistan currently has about 2,000 ICT companies and call centers and more than 300,000 English-speaking information technology (IT) professionals. More than 20,000 IT graduates and engineers are being trained each year.

The ICT industry in Pakistan is constrained by the absence of a holistic system that operates in an end-to-end manner. The constraints can be attributed to (i) inadequacies in policy frameworks, (ii) poor infrastructure and facilities, and (iii) weak institutional capacity. The national ICT policy needs further work to address fundamental issues in the ICT industry such as:

  1. Facilitating private sector participation through devising incentive schemes and creating enabling facilities such as IT Parks to address structural issues including security-related matters
  2. Developing an appropriate engagement model to undertake ICT initiatives that benefit multiple sectors
  3. Developing a long term prioritized investment framework

In parallel, the policy initiatives need to be supported with skills building, the creation of an IT park, and master planning smart city solutions. Due to these constraints, the current demographic profile has not been effectively channelized, fewer jobs are created, and the potential for a female workforce has not been effectively tapped. The problem tree details the core problem, causes, and effects.

The current young population coupled with an English-speaking workforce and a vibrant ICT industry environment would provide huge opportunities for Pakistan to increase exports in software product development and servicing. According to the Pakistan Software Export Board estimates in 2015, the ICT industry recorded $560 million in export revenue. A study by Forester, sponsored by World Bank (2009), suggested that export revenues of $6 billion could be achieved by 2020 if the following areas of intervention are implemented:

  1. Infrastructure development
  2. Skills development
  3. Coordinated brand development
  4. Developing financing
  5. Alleviating security issues to provide a safe working environment

However, proper large-scale infrastructure must be established to provide the enabling platform. Female participation in the workforce through the IT industry will greatly inspire the work potential of half of the country’s population. Proactive participation in the ICT-enabled global value chain will raise Pakistan’s prospect to leverage international investments in the China-Pakistan Economic Corridor (CPEC) with ICT infrastructure as one of the key areas.

These interventions will be predominately located in urban centers of Pakistan. Pakistan’s cities contribute 78 percent to the country’s GDP, and the urban population is expected to grow from the current 40 percent to 50 percent by 2025. With the increased urban expansion, there is an additional demand created for the delivery of public services with effective urban planning and governance.

The government is committed to addressing the issues through smart city solutions, which will enhance the delivery of integrated public services to citizens through the innovative use of ICT solutions and platforms (footnote 1). This requires a calibrated approach starting with the development of a national master plan for smart cities. Further undertaking limited smart city pilots will provide insights into IT requirements applicable to the country’s context. It will also propel the need for more ICT services and contribute to the appropriate usage of facilities created by the project.



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