Improving communication links create business opportunities for Pakistan’s entrepreneurs1,134 views
By TariqAhmed Saeedi
KARACHI: A rise in digital communications in Pakistan is opening a floodgate of business opportunities for entrepreneurs for whom high trade cost remains a major constraint to expansion into the new markets, says an Asian Development Bank’s (ADB) report.
The Manila-based bank, in its report released on Monday, says e-commerce enables businesses to boost their sales on the back of local as well international customers.
“Fast improving communications links and the spread of the internet offer new opportunities particularly for small businesses, and those run by women, to generate increased sales,” says the report, titled ‘Aid for Trade in Asia and the Pacific: Thinking Forward About Trade Costs and the Digital Economy’.
In Pakistan, total broadband subscribers crossed 18.918 million mark in August 2015, showed the data prepared by the regulator Pakistan Telecommunication Authority. This tally is still small as compared to the country’s booming population of 190 million plus.
Of the total subscribers, only mobile broadband users stood at 15.765 million. The much-awaited auctions of third and fourth generation spectrum telecom licences in 2014 gave a boost to a number of users who could now transmit a wide bandwidth data. Earlier, otherwise, the broadband base consisted of meagre 3.79 million subscribers.
However, the bank, which disbursed more than US$25 billion of loans and grants to the South Asian economy till end-December 2014, stresses on the need of investment to exploit the internet connectivity for growth in local and international trade.
“Targeted investment isneeded to support the private sector in utilising the internet for business, and to help identify, develop, and market niche products,” says the report.
At the same time, the report adds that aid for trade (AfT) flows to Asia and Pacific rose in 2013 and this region was found to be, “the second-largest recipient of global AfT dollars at US$14.9 billion of total disbursements.”
“Each US$1 spent is estimated to increase exports by US$1.33,” it claims.
The report shows that Pakistan was among a few largest recipients of disbursements in trade facilitation worth US$155.3 million in 2013.
But, that AfT largely focused regional trade facilitation, agriculture and food security in Pakistan.
According to the report, strong information and communication technology (ICT) infrastructure does not guarantee business.
“While internet access is critical for e-commerce to blossom, it is not sufficient. Even economies that have good ICT infrastructure still sometimes struggle to translate their connectivity into business use,” it says.
Digital environment can greatly help the under-represented women population in the mainstream economy in improving their role as entrepreneurs.
“In Pakistan, only one percent of women are engaged in entrepreneurship,” the report says. “The challenges run deep.”
Citing the data compiled by the Pakistan Bureau of Statistics, it says, “Only 14 percent of Pakistani women participate in the labour force.”
“And of those who do become entrepreneurs, they are three times less likely to know other entrepreneurs than men are,” it adds.
The report further says emerging digital technologies help traders in cutting the usage of hefty documents that jack up cost.
“It has been estimated that a 10 percent reduction in the number of documents required by theimporter will increase trade by 11 percent,” says the report.
Pakistan’s ecommerce market is teetering below US$20 to 30 million as the economy still needs effective and ubiquitous internet payment system and a supportive regulatory launch pad to propel online trade.
The ADB emphasises the significance of development of ICT infrastructure and an enabling regulatory environment for the growth in the “new set of opportunities for economies in the region.”
The writer is a Karachi-based journalist. He can be reached at email@example.com.