National Perspectives on bridging the Digital Divide

Permanent Mission of Pakistan to the WTO

Pakistan’s Digital Economy - OverviewTotal Tele-density 71.16%

Annual Cellular Mobile Subscribers 133.47million

3G/4G Subscribers 36.3 million

Annual Cellular Mobile Tele-density 69.34%

Fixed Lines (LL and WLL) 4.85 m

Annual Wireless Local Loop

Subscribers

789,596

Broadband Subscribers 36 m

Telecom Contribution to National

Exchequer

Rs.126.3 billion

Foreign Direct Investment in

Telecom

$ 7 Billion in last decade

Telecom Revenues Rs.449 billion

IT Sector Key Performance Indicators

Parameters Values Total Turnover US $ 2.6 BillionExport of IT & IT enabled services US $ 2.1 BillionDomestic Revenue US $ 0.5 BillionRegistered Companies 1280

Percentage increase in IT Remittances (as Compared2013-14)

47%

Skilled work force 200,000

Ranking Pakistan in the Developing World

Source – Alliance for Affordable Internet, 2015-2016.

Source – Alliance for Affordable Internet, 2015-2016.

In Pakistan: Outstanding Growth in MBB After Spectrum Auction-2014

Extensive Data Usage on 3G Networks3G shares % 2G shares %

Voice 3% 87%Data 97% 13%

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Digitization EnablersInfrastructureGovernment Policies

▪ Active Policies, Regulations for ecosystem development e.g. Spectrum Availability, economical broadband services, Taxation regime etc. to influence digitization

▪ Policies that support Infrastructure building, Affordability, Reliability & Digital Human Capital development

▪ Broadband (BB) penetration has impact on GDP growth ( 0.25 to 1.38% for every 10% BB penetration) ITU 2012 Study

▪ Increase of 10 percent in a country's digitization score fuels a 0.75 percent growth in its GDP per capita (WEF 2013)

▪ Availability of modern day technologies i.e. 3G, 4G, Broadband, Fibre connectivity, Equipment etc

▪ Communications networks availability in both urban & rural areas

▪ Accessibility and affordability of reliable services for all

Digital Human Capital Development

▪ Educational opportunities for digitization skill development

▪ Incubators, Tech Centre & Knowledge centres, R&D Funds and Software development facilities

▪ Provision of electronic tools, software, hardware and healthy work environment

▪ Job creations and incentives for workforce having digitization based expertise SOURCE: ITU 2012 Study, World Economic Forum Report

2013

• Universal Services Fund - Aim to provide broadband coverage in the whole country by 2018.

Disrupting Services – Pakistan’s G2C goes Digital

• 1. BISP - Benazir Income Support Program in which approximately 4.5 million beneficiary households receive their payments through debit cards within 72 hours of disbursement from the government.

• 2. PCFM - Punjab Citizen Feedback Model in which service providers record citizens’ mobile numbers. A government call centre sends SMS messages and voice calls to public service users to make targeted inquiries about satisfaction with 16 services, ranging from property registration to primary health care and potential incidents of corruption.

• 3. ABC – Automated Border Control in which National Database and Registration Authority’s (NADRA) of Pakistan uses Automated Border Control (ABC) system for the authentication of the authenticated of e-Passport, identity and other travel documents

• 4. CDCP - Citizens Damage Compensation Program in which the disbursement of funds for IDPs of the 2010 floods were provided electronically through cellular networks.

• 5.Financail assistance to IDPs. 1.5 Million supported through Digital funds.

• 6. South-South Cooperation – NADRA assisted the Government of Sudan with its Civil Registration Project; Government of Kenya with its Passport Issuing System; Government of Bangladesh with its High Security Driver’s License; Government of Sri Lanka with its Sri Lanka ID Card Project; and Government of Nigeria with its National Identity Management System (NIMS).

• China Pakistan Economic Corridor- Fibre Optic Cable from North Western China till Islamabad.

• Korean Exim Bank is providing $ 100 M for Technology Park

Digital transformations have reached the tipping point where digital has become “business as usual” as opposed to an appendage. The tail has become the dog. Digital is not just part of the economy — it is the economy.

Source: Harvard Business Review

Pakistan’s Private Sector and Digital Services

• 1. Freelancing - Pakistan has also seen a tremendous growth in freelancing over the last few years with a survey showing that Pakistan showed a 328% growth in freelancing over the last decade, second only to the Philippines at 789%. .4th largest in the world.

• 2. E-Commerce – Pakistan is becoming an attractive destination for B2B companies due to the availability of a skilled labor force at competitive rates. TradeKey.com is a Saudi-Arabia based E-commerce company which provides digital marketing, B2B business development solutions and tradeshow marketing. It is only one of the rising number of B2B companies with an increasingly strong presence in Pakistan’s urban centers. Many B2C enterprises in fashion, retail and servcies.

• 3. Payment Systems - Pakistan has a number of new innovative payment systems revolving around cellular networks. E.g. EasyPaisa, MobiCash. Highest percentage of Mobile financial transactions in South Asia.

• Globally, only 50 per cent of the adult population have a formal bank account

• 90% of adults in developed economies have a bank account, only 13.4% in low income economies. In Sub-Saharan Africa, less than 1 in 5 adults have a bank account

• 70% of the population in high income countries have debit cards, roughly 3% of the population in low income economies have one.

• ICC data show that 60% SME application for trade finance are turned down by banks

Financial Services

Financial Services for Digital Inclusion

• Digital Financial Services can connect 1.6 billion more individuals to the formal financial emerging economies.

• Digital payments can reduce the leakage in public spending and collection by $110 billion a year in emerging economies.

• Digital Finance can give a $36 Billion (7%) boost to the Pakistani economy by 2025.

•

Source – McKinsey, 2016.

Pakistan- Financial Services for Digital Inclusion

• Pakistan signed the Maya declaration of 2011.• Launched a National Financial Inclusion Strategy in May 2015.• Reached 100 percent for its country commitment score in the Brookings Financial and Digital Inclusion Project Report following the launch of its national financial inclusion strategy in 2015.

Update on Branchless Banking• Interoperability of Digital Transactions• Accounts/wallet level Interoperability through 1-Link• Licensing of TPSP

• From June 15 to June 16 growth in the number of BB accounts was 34% (10.8 Million to 14.6 Million)

• Initiatives for farmers (.5 Million smart phones and digital credit)• Easy Paisa, Mobi-Paisa etc

National Financial inclusion Strategy (NFIS)

Individual and firms can access and use a range of quality payments, savings, credit andinsurance services which meet their needs with dignity and fairness

NFIS Vision

NFIS Expectations

50% adults (61.4 million people) should have digital transaction accounts includingmobile wallet accounts by 2020.

( Total No. of adults as on June, 2015 were 122.8 million)

Promote access to financial services in rural and underserved areas

ICT and Broadband is identified among the main pillars which will enable suchproliferation

The Roadmap Ahead• Under the Strategic Trade Policy Framework (STPF) 2015-2018,

Pakistan has constituted a National Advisory Council and a Special Policy Unit for E-Commerce consisting of representatives from both the public and private sector to serve as a focal point for all the coordination purposes.

• The Senate of Pakistan is considering the Prevention of Electronic Crimes Act 2015 which provides a regulatory framework for tackling cyber-crime in Pakistan.

• The State Bank of Pakistan is considering revisions to its policies regarding Payment System Operator and Payment Service Provider (PSO and PSP) in order to boost credit card penetration and the proliferation of digital financial services.

• National Advisory Council on E Commerce.

• National Policy Board on E Commerce , headed by Finance Minister

Aid for Trade• SDG 8.a Increase Aid for Trade

support for developing countries, in particular LDCs, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries.

• OECD: one dollar invested in AFT leads to nearly 8 additional dollars in exports from all developing countries – and 20 dollars for the poorest countries.

• More AfT focused on Digital Economy is needed in order to reduce the digital divide.

Source: OECD/DAC CRS aid activity data base

Total Aid for Trade Disbursements (2006-13)

eTrade for All• UNCTAD-led initiative aims to improve the ability of

developing countries, and particularly benefit LDCs, to use and benefit from e-commerce.

• The initiative brings international organizations, donors and businesses under one umbrella, easing developing country access to cutting-edge technical assistance and giving donors more options for funding.

• The initiative will help developing countries in seven policy areas: e-commerce assessment; information communications technology infrastructure; payments; trade logistics; legal and regulatory frameworks; skill development and financing for e-commerce.

Thank You

Digital Indices – Pakistan’s Ranking

Index/

Description

Huawei Global

Connectivity Index

ITU, MIS Report, 2015,

ICT Development

Index

WEF, Networke

d Readiness

Index

UNCTAD B2C e-

Commerce Index 2016

Brookings Financial

and DigitalInclusion

Report

MGI Connectedness Index

Position of

Pakistan50/50 143/156 112/143 105/137 14/26 62/139

Leaders USA, Singapore

Korea, Denmark

Singapore, Finland

Luxemburg, Iceland

Kenya,Columbia

Singapore, Netherlands

StartersNigeria, Bangladesh, Pakistan

Afghanistan, Chad

Guinea, Chad

Guinea, Niger

Ethiopia, Egypt

Sierra Leone, Seychelles