The recent agreement on the financial package from the International Monetary Fund brings a sigh of relief for Pakistan’s economy. However, it is vital that we view this as an opportunity to strive for self-reliance and long-term stability. To achieve economic transformation, digital inclusion must become a top priority.
With over 53 per cent broadband penetration, Pakistan currently has 127 million broadband subscribers, out of which 124m use the internet on mobile phones. Sadly, nearly half of Pakistan’s population is still offline, underscoring the urgent need for comprehensive measures to bring at least an additional 50m Pakistanis online within the next two years. By enabling our citizens to access vital services such as education, healthcare, and finance, we can foster a prosperous future for all.
To facilitate the transition toward digital inclusion, policymakers may consider specific measures. Currently, Pakistan is one of the highest-taxed telecom markets in the world, with a 34.5pc tax on essential telecom services.
Terming high taxation as a deterrent in achieving economic efficiency and growth, an International Monetary Fund working paper titled ‘Taxing Telecommunications in Developing Countries’ stated that tax measures that decrease or slow down cell phone penetration could bring short-term revenue benefits for the government at the expense of long term benefits for all.
Nearly half of Pakistan’s population is still offline, underscoring the need for comprehensive measures to bring at least an additional 50m Pakistanis online within the next two years
Reducing taxes is crucial, as it will enhance affordability and accessibility for a larger portion of the population. In addition to the wide economic benefits that higher broadband proliferation can deliver, increased usage has the potential to boost government tax revenues in the long term due to rationalised taxes.
According to various studies, the main obstacle to providing internet access to lower-income segments of society is the affordability of smartphones. The Broadband Commission highlighted in its report titled ‘Strategies Towards Universal Smartphone Access’ that in numerous low and middle-income countries, the cost of smartphones can exceed 70pc of the average monthly income.
Rationalising levies and duties on smartphones will further incentivise their adoption, ensuring more individuals have the means to connect.
Moreover, a healthy and stable telecom sector is the foundation of a country’s digital ecosystem and a prerequisite for consistent improvement in service quality for users. However, the telecom industry’s financial health is severely impacted due to an unprecedented rise in its business costs, primarily fuel, electricity, interest rates, and constantly increasing dollar-pegged spectrum instalments.
In this scenario, denominating telecom license prices in rupees instead of the US dollar is critical. By making this shift, telecom operators can invest more effectively in improving service quality and upgrading networks. This will ultimately result in enhanced connectivity experiences for users.
Embracing digital inclusion holds immense potential to strengthen Pakistan’s economy. Access to the internet opens doors to a world of opportunities, enabling individuals to harness the power of education, healthcare, financial services, and more. By connecting previously underserved communities, we can bridge the digital divide and unlock the untapped potential of Pakistan’s talent and resources.
Digital inclusion goes hand in hand with empowering future generations through education. We can enhance educational opportunities and bridge educational disparities by providing access to online educational resources and e-learning platforms. This will empower our youth with the knowledge and skills needed to compete in the digital age and contribute to the country’s socioeconomic growth.
It not only transforms individual lives but also has a profound impact on the economy as a whole. By connecting more individuals to the digital world, we create new avenues for entrepreneurship, innovation, and job creation. Increased digital participation translates into enhanced productivity, economic diversification, and a stronger workforce capable of driving Pakistan’s economic growth.
A comprehensive roadmap is imperative to guide the journey towards digital inclusion. It should focus on infrastructure development, investment in broadband connectivity, and initiatives to improve digital literacy among the population. Collaboration between the public and private sectors is vital to achieving these goals, as it fosters innovation and efficiency in the deployment of digital infrastructure.
To unleash Pakistan’s economic potential, digital inclusion must be at the forefront of our priorities. By bringing more individuals online, we open doors to transformative opportunities and services that can improve their lives and contribute to the nation’s prosperity.
Policymakers may focus on implementing measures to reduce barriers to access, create an enabling environment for digital infrastructure development, and foster digital literacy. Together, let’s prioritise digital inclusion and embark on a journey that unlocks the full potential of Pakistan’s incredible talent and resources.
The writer is a tech journalist turned policy and strategic communication professional. Twitter: @mkhayyams
Published in Dawn, The Business and Finance Weekly, July 31st, 2023
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