State Bank: Pakistan IT Exports Surge Past Billion Dollars in 2018

[Riaz Haq]

Pakistan's information technology exports have bucked the nation's declining exports trend with double digit growth to reach $1,065 million in fiscal year 2018, according to the State Bank of Pakistan.  It is generally believed that Pakistan's central bank underestimates technology exports. Some have argued that the actual IT exports were closer to $5 billion in fiscal 2018. Some of the differences can be attributed to the fact that the State Bank IT exports data does not include various non-IT sectors such as financial services, automobiles, and health care.

Source: State Bank of Pakistan

Pakistan IT exports surged 13.4% to $1.06 billion in fiscal year 2018 from $939 million in fiscal year 2017. The growth was even more robust in the prior year with IT exports rising 19.1% from $789 million in fiscal 2016 to reach $939 million in fiscal year 2017.

Source: State Bank of Pakistan

About $320 million of IT exports revenue in fiscal 2018 came from software exports while the rest was made up of services such as consulting, telecom and call centers.

Double Digit CAGR in Pakistan IT-ITeS Exports in 2010-2018

Online Labour Index top 20 worker home countries, 1-6 July 2017

Freelancers in Pakistan are benefiting from the growing access to broadband connections which are now being used by over 50 million Pakistanis across the country. Pakistan is ranked 4th in the world by the freelancing industry report.  The country has rapidly increasing human capital of technologists.

Growth in IT exports is a good sign for Pakistan's export diversification beyond commodities such as textiles and food. In addition, air forces of about a dozen developing nations are buying and deploying Pakistani made aircrafts. The reasons for their choice of Pakistan manufactured airplanes range from lower cost to ease of acquisition, maintenance and training.

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[Riaz Haq]

#Pakistan #Export Of #Engineering Goods Jumped 176.72% In July to $39.223 million, up from $14.174 million exports recorded during the same month of last year, according to the State Bank of Pakistan. - UrduPoint https://www.urdupoint.com/en/business/export-of-engineering-goods-i...

The export of engineering goods from the country during the first month of current financial year 2019-20 increased by 176.72 percent against the corresponding month of last year.

During the month of July, 2019, the export of engineering goods were recorded at $39.223 million as against $14.174 million exports recorded during the same month of last year, showing growth of 176.72 percent, according to the data issued by the State Bank of Pakistan.

The engineering commodities that contributed positively in external trade included electric fans, export of which grew from $2.614 million last year to $3.428 million during the period under review, showing growth of 31.14 percent, the data revealed.

The exports of transport equipment grew by 5,874 percent from $0.415 million to $24.794 million while the exports of other electrical machinery also increase by 21.37 percent from $2.115 million to $2.567 million.

Moreover, the export of auto parts also increased by 45.93 percent from $1.365 million to $1.992 million.

Meanwhile, the engineering commodities that witnessed negative growth in external trade included export of machinery specialized dipped by 20.97 percent from $2.727million during the period under review to $3.451 million same month of last year, whereas the export of other machinery also decreased by 11.84 percent from $3.715 million to $4.214 million, the data revealed.

[Riaz Haq]

Terra Nova Capital Partners--#European #Investor in #Pakistan #IT company: "...they hire the best IT talent locally, 80% of their revenue comes from overseas thanks to strong client relationships in North America, Germany and the Middle East". #technology https://www.terranovaca.com/a-month-in-pakistan

On the ground, we found most companies in a depressed state due to currency devaluation and struggling domestic economy. However, the exporters are poised to benefit from the devalued rupee, while import substitute businesses take advantage of government policies such as tax subsidies designed to reduce the problematic current account deficit. As a result, we invested in four companies which we believe will do well even in this turbulent time for the economy: three export-related businesses (an IT company, a textile manufacturer, and a hydrogen peroxide producer that supplies textile industry) and a fertilizer business benefiting from import substitution policies.


The IT services company we invested in is a hidden gem that shines from all angles. First, the business stands to benefit from the weak currency: while they hire the best IT talent locally, 80% of their revenue comes from overseas thanks to strong client relationships in North America, Germany and the Middle East. Second, they have grown earnings for many quarters and expect further 15% bottom-line expansion next year. And third, they have built an open-minded, friendly culture: we were impressed that the company’s CFO is female (having women in top positions is rare in Pakistan), there is a gym at the office (with female-only hours), and the employees collaborate, look happy, and smile. This progressive and growing business was trading at only 7x P/E, a bargain compared to its historical levels of around 20x and IT outsourcers in other markets trading at over 30x.

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After many unsuccessful attempts to get a meeting with Pakistan’s finance minister, we decided to simply show up at his office. Getting through security was surprisingly easy, but as we were about to waltz into the minister’s office, a large man summoned us.



The large man was the “Additional Finance Secretary”. We explained that we have been active foreign investors in Pakistan for six years, and had sent five unanswered emails to the minister over the past four weeks requesting a meeting. The man assured us that every email gets printed and placed on his desk so he personally saw every message we sent (though he did not recall seeing any of them). Instead of [e-mail], he said we should send our request to the Yahoo! email address on his official business card (?!) and he would get back to us in a few weeks. As it was apparent he was just trying to get rid of us, we persisted. He finally told us that if we follow him he would take us to shake the minister’s hand and make the appointment.



However, as we were passing by the minister’s door we realized that the man had no intention to stop. Instead, he said he was escorting us out of the building. In a last-ditch effort, we knocked on the door and were about to open it – only to be dragged away by the large man. We later learned that finance minister takes 2-hour afternoon naps in his office, so we hope we didn’t wake him up.

[Riaz Haq]

IT & IT enabled services (ITes) export remittances have surged to $550.503 million at a growth rate of 24.71 per cent during the first six months of FY 2019-20 (July-December), in comparison to $441.435 million during same period in FY 2018-19, according to performance report of Pakistan Software Export Board (PSEB), an organisation under Ministry of IT and Telecommunication.

https://www.gulftoday.ae/business/2020/03/05/united-states-china-uk...

The number of PSEB registered IT & ITes companies has risen to 2163 as of Dec.30, 2019 compared to 1873 valid registrations as of December 2018 at growth rate of 15.5 per cent. PSEB facilitated 5 IT companies for attending Canada Pakistan ICT Forum, held in Toronto, Canada from Sept.23-27, 2019 besides facilitating participation of 20 IT companies in Pakistan Tech Summit 2019 in Norway on Sept.25 last year.

PSEB organised participation of Pakistan’s IT companies participation at China Hi-Tech Fair 2019 held at Shenzhen, China on Nov.14-17 2019. It also facilitated participation of Pakistan’s IT companies in Arabnet 2019, Riyadh, Saudi Arabia on December 10-11 last year.

PSEB organised participation of 20 IT companies in ITCN Asia 2019 held in Karachi in September PSEB also organised Commercial Counselors Training session at PITAD in October last year to apprise them about the facts and potential of Pakistan’s IT industry in order to solicit their efforts for projecting Pakistan’s IT industry as viable and feasible outsourcing destination in key international markets.

Last month the banking sector in Pakistan gets a new boost as one of the leading credit rating agencies in the world, Moody’s Investors Service, has announced a stable outlook for the Pakistani banking system for the next 12 to 18 months in a new report released on Thursday.

“The sovereign credit profile has improved in recent months, benefiting the banks through their high exposure to government securities, which account for around 40 per cent of their assets,” said Constantinos Kypreos, Moody’s Senior Vice President, in a press release issued by the agency. The Moody’s report said that economic activity in the country will be supported by the ‘ongoing infrastructure projects and improvements in power generation and domestic security’. It further noted that the government’s decision to depreciate the rupee and trade gains may raise private investment from the current low levels in the country.

[Riaz Haq]

#Pakistan earns $652 million from Information #technology services’ #export in first 6 months of current fiscal year 2019-20, up 21.79% from $535.940 million earned in corresponding period of FY 2018-19, according to Pakistan Bureau of Statistics (PBS).

https://nation.com.pk/13-Mar-2020/pakistan-s-earns-dollar-652-milli...


Pakistan earned $652.720 million by providing different information technology (IT) services in various countries during the first six months of current financial year 2019-20.

This shows growth of 21.79 percent as compared to $535.940 million earned through provision of services during the corresponding period of fiscal year 2018-19, Pakistan Bureau of Statistics (PBS) reported.

During the period under review, the computer services grew by 25.35 percent, from $391.770 million last year to $491.090 million during July-December (2019-20).

Among the computer services, the exports of hardware consultancy services witnessed increase of 90.45 percent, from $0.880 million to $1.676 million while the export of software consultancy services also grew by 11.68 percent, from $173.972 million to $194.289 million.

The export and import of computer software related services increased by 9.32 percent, from $149.540 million to $163.482 million whereas the exports of maintenance and repair of computer services decreased by 62.06, from $3.297 million to $1.251 million.

Meanwhile, the export of information services during the period under review increased by 57.97 percent by going up from $0.690 million to $1.090 million.

Among the information services, the exports of news agency services increased by 106.90 percent, from $0.319 million to $0.660 million whereas the exports of other information services also increased by 15.90 percent, from $0.371 million to $0.430 million.

The export of telecommunication services increased by 11.89 percent, from $143.480 million to $ 160.540 million during current period, the data revealed.

Among the telecommunication services, the export of call centre services also increased by 19.63 percent during the period as its exports increased from $49.665 million to $59.413 million whereas the export of other services also increased by 7.79 percent, from $93.815 million to $101.127 million during current year, the PBS data revealed.

[Riaz Haq]

#Pakistan #informationtechnology (IT) #exports rise to $887 million in 8 months of current fiscal year 2019-20, strong 26.24% growth from $702.990 million during the same period last year. #tech - https://www.technologytimes.pk/2020/04/01/it-export-remittances-inc...

PSEB Managing Director, Syed Ali Abbas Hasani, stated in his briefing that Pakistan’s IT & IT-enabled Services (ITeS) export remittances, including telecommunication, computer and information services, have surged to $887.470 million, showing a growth rate of 26.24 percent during the first eight months of the fiscal year 2019-2020 as compared to $702.990 million during the same period last year.

While the number of registered IT & ITeS companies have increased by a stellar 26.35%. He stated that Korean Exim Bank has principally agreed to give funding for the establishment of a state of the IT Park in Karachi and that training in emerging technologies of 2,000 fresh IT graduates and professionals working in the industry will start from May 2020.

[Riaz Haq]

South Korea’s Eximbank plans to finance Pakistan’s large-scale IT project. #Korea to offer a $76 million-plus loan to #Pakistan for IT-related projects including electronic intelligence. #tech #informationtechnology

http://www.koreaherald.com/view.php?ud=20200707000143

South Korea’s state-run policy lender Export-Import Bank of Korea plans to offer a $76 million-plus loan to Pakistan for IT-related projects including electronic intelligence, a top official told The Korea Herald on Monday.

Eximbank established the Economic Development Cooperation Fund in 1987 to support industrialization and economic growth in developing countries as well as promote bilateral economic exchanges.

“The size of the loan and project is expected to be larger than the IT Park construction project in 2017,” said the official, who requested anonymity.

The project is aimed to support Pakistan’s small-and medium-sized IT firms and bolster technology cooperation between South Korea and the South Asian country.

“But there have been discussions about expanding IT cooperation between the two countries beyond infrastructure, which led to the project taking shape,” the official added.

The project is still in its early stages due to the coronavirus pandemic, the official stressed. Key details, such as the master plan and the exact size of the loan are yet to be discussed.

Eximbank is also planning to delay debt repayment of seven loans extended to Pakistan via EDCF that face maturity this year -- there are a total of 13 of such loans extended to the country so far.

This is in line with the government’s decision, announced in April, to provide more than $400 million to developing countries for virus-related programs and delay repayment of debt from 27 developing nations.

“The debt repayment issue is being discussed via the Paris Club,” the official explained, pointing to a group of major creditor nations who seek to find solutions for payment problems that debtor economies face.

[Riaz Haq]

#Pakistan’s #InfoTech #exports have been growing by double digits annually for a decade. #computers #software #technology #services

https://twitter.com/haqsmusings/status/1282179959205752833?s=20

[Riaz Haq]

FY2019-2020: IT, ITeS export remittances surge by 23.71 percent

https://www.brecorder.com/news/40007679

The Information Telecommunication (IT) and IT enabled Services (ITeS) export remittances comprising computer services and call center services surged by 23.71 percent to $1.230 billion in the fiscal year 2019-2020 compared to $994.848 million during the same period last year (2018-2019). This has been revealed in the performance report of the Pakistan Software Export Board (PSEB), the attached department of the Ministry of IT and Telecom, here on Friday.

The ITeS export remittances surged from $1.11 billion in May 2020 to $1.230 billion in June 2020 registering a nominal growth of $0.12 million compared to around $76 million during the same period of the previous year (2018-2019) as it went up from $917.875 million to $994.848 million. The ministry has set target to increase this volume to $5 billion in the next three years.

The ministry spokesperson said that the Ministry of IT and Telecommunication was committed to increasing the IT exports and taking special steps in that regard. Federal Minister for IT & Telecommunication Syed Aminul Haq has directed the PSEB to take every possible step for achieving target of IT exports remittances.

He said under the prime minister's vision of "Digital Pakistan", it was vital to take forward all the matters related to information technology and connect the youth especially students to the digital world. He said that the Ministry of IT was playing an important role regarding coping the Covid-19 pandemic through information technology, adding that the coronavirus cases were now declining in the country.

The generous incentives from the government and various projects to enhance capacity and capability of the IT industry have resulted in strong industry growth rates. Incentives to the industry include zero income tax on IT and ITeS exports till June 2025, tax breaks for the PSEB-registered IT start-ups for three years, up to 100 percent foreign ownership of IT and ITeS companies, up to 100 percent repatriation of profits for foreign IT and ITeS investors, tax holiday for venture capital funds till 2024, among other incentives.

Spokesperson of the ministry told Business Recorder that 6,000 Pakistan-based IT companies were providing IT products and services to entities in over 100 countries. Pakistan was ranked the 3rd most popular country for freelancing in the world, and Pakistani IT companies are providing products and services to the world's largest companies. Pakistan's ICT Industry has been a resounding success story for Pakistan, having achieved a stellar remittance inflow growth rate, and being the largest net exporter in the services sector.

[Riaz Haq]

#ImranKhan to set up Special #Technology Zones (STZs) for #IT industry in #Pakistan with land in major cities with specialised infrastructure, like plug & play buildings, for IT companies. low rents, low sales & withholding tax.- Profit by Pakistan Today

https://profit.pakistantoday.com.pk/2020/08/28/pm-khan-keen-to-set-...

Prime Minister Imran Khan has shown keen interest in setting up Special Technology Zones (STZs) for the IT industry to support its growth and improve ease of doing business.

He expressed support for the idea in a meeting with a delegation from Pakistan Software Houses Association (P@SHA) and other representatives of the industry on Thursday. The prime minister resonated with the industry, telling the delegation he saw a lot of potential and growth in the IT sector.

The meeting was was also attended by Minister for Information Technology, Syed Aminul Haq, Minister for Information, Senator Shibli Faraz, Minister for Industries, Muhammad Hammad Azhar, Advisers Dr Abdul Hafeez Sheikh, Dr Ishrat Hussain, Abdul Razzak Dawood, Special Assistant Dr Shahbaz Gill, federal secretaries, Chairman FBR, Governor State Bank of Pakistan (SBP) and representatives of various companies belonging to the IT sector.

“The IT industry demanded Special Technology Zones (STZs) to provide opportunities for medium and small scale IT enterprises to have less infrastructure cost and overheads to enable them to do their business and earn exports and remittances for the country,” a source told Profit, elaborating the context of the meeting.

Though the proposal made headway earlier and reached the Planning Commission, the budget for it was never approved. The stakeholders are now hopeful that PM Khan has shown a lot of interest in it and he has directed that the details be shared with him and he wants to see it happen.

“PM Khan is himself very interested in seeing this succeed and he will issue instructions and the Planning Commission would have to find ways to get it through now,” said another source.

Two years ago, P@SHA, the official body that represents the IT industry, had recommended the federal government set up IT Clusters, known STZs. The concept was to emulate Special Economic Zones (SEZs) for other industries, but with certain incentives specific for the IT industry to promote its growth. The proposal was presented during the tenure of Pakistan Muslim League Nawaz (PML-N) government when Anoushay Rahman was the IT Minister.

STZs were P@SHA’s top most recommendation. All the countries that currently excel in IT have STZs like in Singapore, Philippines etc. India, for instance, has over 100 STZs.

In a clustered environment for the IT industry, P@SHA had recommended dedicating clusters of land in major cities with specialised infrastructure, like plug and play buildings, for IT companies. STZs have low land rental, less sales and withholding tax, less utility bill charges, which are all incentives to bring investors and incentives that are necessary for small IT companies to thrive in a low cost environment.

“IT companies get projects that require plug and play and power backups. This is the sort of infrastructure that is necessary for its growth. High rise technology parks do not work it for the IT industry because these buildings have high rentals which increases cost of doing business,” a representative from P@SHA told Profit.

The IT industry has also been pushing to keep FBR in check, with their undue notices to IT companies that increases cost of doing business because businesses are required to respond to these notices that incurs untimely costs. That is also an issue that the industry stakeholders believe could be solved with setting up of STZs with one-window operations, which reduces the cost of doing business.

[Riaz Haq]

Khyber-Pakhtunkhwa government’s flagship project, Pak-Austria Fachhochschule University completed in Haripur

https://pk.mashable.com/social-good/4983/khyber-pakhtunkhwa-governm...

Pak-Austria Fachhochschule University, Haripur will offer specialised courses like artificial intelligence, railway engineering, mineral resource engineering and agriculture food technologies and others. It is pertinent to note that construction work on university was launched by the current government last year.

PAF-IAST said,” PAF-IAST is nestled in natural mountains that flank its campus from all sides, offering one even the ravishing view of snow-capped peaks of Nathiagali and natural winding trails. To its north-west is Tarbela Lake, a journey of only a few kilometers from the campus.”

“Set in middle of the campus is natural lake, fed by the springs of surrounding mountains. The campus is just a 3-kilometer drive from the Hazara Motorway,” PAF-IAST said.

The major cities like Islamabad and Abbottabad, are just an hour’s drive, while small towns like Wah, Hasanabadal, Taxila and Swabi can be reached in just half an hour from the campus.

PAF-IAST said the university wanted to contribute to the development of sound industrial economy in Pakistan and to strive and achieve the goals of effective higher education in engineering, science, and technology.

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Skilling Pakistan
A Vision for the National Skills Strategy, 2008-12” seeks to achieve three main objectives in the context of defining technical education at policy level: 1) providing relevant skills for industrial and economic development; 2) improving access, equity and employability; 3) assuring high standards in skills development. These objectives are consistent with the policy of government of Khyber Pakhtunkhwa towards poverty alleviation through skill training and human resource development. Underpinning these prime objectives is our prime focus on meeting workforce demands in key growth sectors such as industry, IT, information and communication technologies, medical technologies, electrical and mechanical as well as mineral resource development, extractive metallurgy and construction fields.