Digital future

Jeff Paine 11 Jun 2020

The writer is managing director of the Asia Internet Coalition.

THE news that Pakistan is facing its first economic contraction in 68 years is difficult. Like
the rest of the world, Pakistan is not immune to the headwinds flowing from the pandemic.
With disruption in every aspect of life, societies are relying on technology more than ever to
communicate with families, keep businesses going and access essential services.
Accelerating the pace of digital technology adoption in Pakistan has never been timelier.

Across Asia, the digital economy has been a crucial factor in transforming economies and
communities, and spurring economic growth. Indonesia has ridden on the back of a vibrant start-
up community to create five unicorns in the e-commerce, digital payments, and travel sectors.
These companies are each valued at $1 billion or more. Malaysia has secured global investment
enabling domestic and international companies to move into hi-tech manufacturing. Singapore’s
digital prowess has enhanced its trade relations with global markets. A focus on digital economy
development means these countries have been able to leverage opportunities from digital
transformation.

As Pakistan embarks on its own transformation agenda — the ‘Digital Pakistan Vision’ —
lessons from across Asia can be useful. Pakistan is a market of scale blessed with a youthful
population. The IT export sector is vibrant, start-ups like Airlift, Zameen and Patari are being
funded and noticed, and the ease of doing business is improving.

However, a significant digital divide exists with only 35 per cent of the population having
internet access. Covid-19 has shown that without comprehensive strategies to provide internet
access, communities suffer and young people are disadvantaged.

Digital Pakistan Vision must deliver tangible outcomes.

While policy discussions are underway in areas like e-commerce, data protection, content,
privacy, and taxation, the government can take steps to ensure that the Digital Pakistan Vision
delivers tangible outcomes. Cross-border data flows must be promoted, data governance
frameworks aligned with global norms and standards, and stakeholder consultation and
collaboration prioritised.

Digital economies require the free flow of data across borders to function, and regulations that
support cross-border data flows are a key element. A McKinsey study shows that over a decade,
data flows collectively have raised world GDP by approximately 10pc and contribute $2.8
trillion to annual trade. That contribution equates to a larger share of the increase in global GDP
compared to the worldwide trade of physical goods.

The role of cross-border data flows in transforming global economies cannot be underestimated.
Every sector including manufacturing, agriculture, services, and retail, is leveraging data for
efficiency, productivity, supply chains, and innovation.

Conversely, a report by the European Centre for International Political Economy found that data
localisation can reduce GDP, as much as 1.7pc in Vietnam, 1.1pc in China, and 0.8pc in India.

Despite intentions to protect data, localisation policies are likely to increase risks around privacy
and cybersecurity, lessening network resilience and raising costs for business. SMEs are on the
losing end when they are unable to leverage technology like cloud-powered software, data
analytics, and AI.

Digital transformation requires a robust digital governance framework to unleash the full value
of the digital economy.

Singapore’s Personal Data Protection law and the Asia Pacific Economic Cooperation Cross-
Border Privacy Rules System are examples of the responsible use of technology, ensuring data
security, protection and privacy without compromising innovation. Adopting reasonable
limitations on the collection, use, and disclosure of personal data, and implementing permitted
transfer mechanisms like those provided in the region, Pakistan can drive digital growth whilst
protecting individuals’ data.

As Pakistan shapes its export strategy, the Australia-Singapore Digital Economy Agreement
offers much to emulate. Setting an international benchmark for the wider region, DEA’s trade
rules and comprehensive framework promotes seamless data flows (while prohibiting data
localisation) in order to boost digital trade.
Ensuring digital policies keep pace with technological advances, industry dialogue should
become a standard mechanism in policymaking, ensuring that Pakistan’s policies are fit-for-
purpose and future-proofed. Partnerships between the public and private sectors will also enable
Pakistan’s entrepreneurs and workforce to benefit.

Integration and interoperability with global standards will support an agile, innovative and
resilient digital economy, one that enables Pakistan to bridge the digital divide and achieve
inclusive social and economic growth.

The Asia Internet Coalition is ready to support Pakistan’s transformation journey. With forward-
thinking policies, the nation’s aspirations to a competitive digital ecosystem are well within
reach.

The writer is managing director of the Asia Internet Coalition.

Published in Dawn, June 11th, 2020