Glass Half Full in Pakistan Posted by Shadi Hamid

I'm not entirely sure who Riaz Haq is, but this recent blog post provides a much more optimistic outlook on Pakistan's future than nearly anything else I've seen as of late. He cites a set of figures and superlatives from the Tech Lahore blog:

1. Pakistan is the most connected country in South Asia, with the highest teledensity
2. Pakistan’s communications costs are lower than any other country in the region
3. Pakistan has the world’s largest biometric database (NADRA); this system (not the data)  is now being provided to allied countries
4. Pakistan has the world’s largest WiMAX network
5. Pakistan has one of the world’s most aggressive Fibre-to-the-Home (FTTH) rollouts
6. Pakistan has one of the highest rates of cellular connectivity growth in the world (According to PTA 2007’s report the rate of growth in Pakistan’s mobile sector is fourth highest in the world)
7. Pakistan was the winner of the 2007 GSM industry association award
8. The US is importing UAVs designed and built in Pakistan to protect America’s borders

That's a teaser (read the full list here). These indicators strike me as somewhat selective. Fine, Pakistan is, in some sense, technologically advanced. None of Tech Lahore's indicators, though, discuss what I would call underlying structural factors. In other words, these are primarily dependent rather than independent variables, meaning that it is unlikely that the feedback loops are going to run from technology to politics or culture, whereas politics will obviously be an engine of reform in non-political sectors. Put differently, are these technological advances accidents which have happened in spite of or independent of government policies and political structure, or are they a result of government policies/political structure? If the latter, this would tell us something more meaningful about Pakistan's prospects.

UPDATE: Tech Lahore responds:

The youngest Microsoft Certified Professional in the world being a Pakistan can, perhaps, be an “accident”, as you put it. Having a fibre network spread across a country the size of Pakistan can not. Having the largest WiMAX network in the world can not. etc. etc.

I won’t get into a detailed analysis of all the 15 points mentioned in my original blog post, or even a re-cap of why Pakistan might be one of the world’s best locations for an IT company, but let me take a crack at one item from that list of 15.

Why is it that Pakistan has the world’s largest WiMAX network? Was this truly an accident or can this be seen in a larger political/developmental context? And, what does a WiMAX network really even mean for a country like Pakistan?

Read the rest of his post here. You'll learn more about WiMAX networks than you ever imagined.

UPDATE II: I'm lifting Riaz Haq's response from the comments section:

Without going into the specific accomplishments in Pakistan during Musharraf-Aziz regime, I believe it can be safely said that the communications revolution (accompanied by dramatic growth in vociferous electronic and new media) as well as a significant enlargement of the middle class in Pakistan helped sow the seeds of the end of arbitrary actions by President Musharraf. In other words, Musharraf pulled a Gorbachev ( a la perestroika that unleashed uncontrolled energies) by enabling powerful resistance to arbitrary rule. Some of these changes are durable and I hope will make our rulers more accountable. There will still be abuse of power but the sunlight will shine brightly on it to the detriment of the abusers. Eventually there will be real participatory democracy with appropriate checks and balance imposed by a much larger and more powerful and aware middle class essential for true democratic governance in Pakistan.

Comments

[shuja ahmed]

As far as the case of fiber optics case is concerned the Government policy on the same was the reason for its rapid development. Ofcourse, that Government is no more!

[TechLahore]

The youngest Microsoft Certified Professional in the world being a Pakistan can, perhaps, be an "accident", as you put it. Having a fibre network spread across a country the size of Pakistan can not. Having the largest WiMAX network in the world can not. etc. etc.

I won't get into a detailed analysis of all the 15 points mentioned in my original blog post, or even a re-cap of why Pakistan might be one of the world's best locations for an IT company (http://techlahore.wordpress.com/2008/08/16/is-pakistan-the-best-place-on-earth-to-launch-a-web-20-company/), but let me take a crack at one item from that list of 15.

Why is it that Pakistan has the world's largest WiMAX network? Was this truly an accident or can this be seen in a larger political/developmental context? And, what does a WiMAX network really even mean for a country like Pakistan?

First off, both companies that have competing WiMAX installs in Pakistan (Wateen and Mobilink) are head quartered in the Middle East. Wateen, which is a UAE "Sheikh owned" company, has invested billions of dollars in Pakistan. This investment did not accidentally make its way into Pakistan. It is, in fact, the result of a deliberate political decision made in many cash-rich countries of the Middle East, post 9-11. The Arab Sheikhs no longer look upon the West as a very safe place to park their capital, and as such, they have diversified. Hundreds of billions of dollars of their money have been invested in developing Muslim countries like Pakistan and Egypt. I won't bore you with details of the close-to-$75BN investment UAE real-estate developers have committed to Pakistan. For me to make my point, it is enough to say that the money that fueled the world's largest WiMAX network came to Pakistan because 1) Pakistan deregulated the Telecom, IT and other sectors, which were attractive to foreign investors given Pakistan's demographics 2) Post 9-11. trillions of dollars of Arab money seek a safer refuge than what the west offers 3) Pakistan in particular attracts a lot of Arab money because the returns and growth in sectors as diverse as telecom, pharma, real estate and household goods - have been spectacular and 4) Pakistan's government has some of the most attractive terms for foreign investment of any country, globally. For instance, an 18 year 100% tax holiday on IT companies, 100% repatriation of profits, 100% foreign ownership etc. etc.

The WiMAX story is, then, as much about post 9-11 politics and official Pakistan Government policy as it is about technology.

Now on to another aspect - are these just numbers quoted in articles or are these developments impacting real people, on the ground in Pakistan? We've got this WiMAX network now, but what does it mean for Pakistanis? Well, a lot. A parallel can be drawn to the cellular revolution in Pakistan which has empowered thousands of businesses that would otherwise never have been possible. I won't cite the usual, direct beneficiaries such as cell phone franchises, repair stores etc. Let me give you a couple of off-the-wall examples.

Several companies in Pakistan have developed GPS tracking technology for both security as well as asset/inventory control and fleet efficiency. None of these companies would be able to produce their innovative hardware in places such as Hall Road, Lahore, without access to cheap SMS (text messaging) capabilities delivered by networks such as Wateen's Warid, Mobilink or Telenor. The economics of a proprietary system simply would not have worked. Without the kind of country wide, redundant coverage Pakistan offers, the system would be useless. Only because you have all the necessary ingredients can you build these companies and create hundreds or thousands of well-paying jobs.

But these are larger companies that provide services to other large companies, or individuals who can afford the extra expense. How have cell phone networks impacted the ordinary man, beyond the city-to-village connectivity, or the PCO small businesses? Here's an interesting little case study to consider. There is a small startup in Lahore that is in the movie rental business, except they have a unique spin on the concept. They deliver movies to the customer's home, typically within 30 minutes of receiving an order on the phone or via their website. The business works because their motorcycle-riding delivery folks carry a few dozen of the most popular titles with them at all times... and they have a cell phone. When a new order comes in, they are simply SMS'd a delivery address and the name of a title. When they make a delivery they SMS a code back that allows the "HQ" to determine which delivery person has what movie remaining in their mobile "canvas bag" inventory. Without cell phones, this business would not exist. If SMS/calling rates in Pakistan where what they are in the US, it probably wouldn't be able to make money. It is only because Pakistan has excellent cell services at cheap rates, that this 10-20 person company exists and thrives.

As was the case with cell networks, WiMAX will breed its own eco-system of companies and create thousands of jobs. Whether it's businesses focused on video surveillance, automated ticketing at traffic lights, video conferencing, or telemetry applications in rural areas (output of a tube well) etc. etc.

When you create new jobs, it undeniably has political implications. When you give college graduates with technical degrees an ability to productively apply their minds, in an economy that can capture the benefits of their labour, that too has political implications. When you allow political messages to spread via SMS to 90 million Pakistanis... hmm... now that's pretty interesting.

Could any of this have happened without the government deregulating the Telecom industry? Not at all. Without the government liberalizing foreign direct investment? Probably not.

Sorry for the long comment, but I hope I've clarified the original article sufficiently.

[Riaz Haq]

Without going into the specific accomplishments in Pakistan during Musharraf-Aziz regime, I believe it can be safely said that the communications revolution (accompanied by dramatic growth in vociferous electronic and new media) as well as a significant enlargement of the middle class in Pakistan helped sow the seeds of the end of arbitrary actions by President Musharraf. In other words, Musharraf pulled a Gorbachev ( a la perestroika that unleashed uncontrolled energies) by enabling powerful resistance to arbitrary rule. Some of these changes are durable and I hope will make our rulers more accountable. There will still be abuse of power but the sunlight will shine brightly on it to the detriment of the abusers. Eventually there will be real participatory democracy with appropriate checks and balance imposed by a much larger and more powerful and aware middle class essential for true democratic governance in Pakistan.

[Saif]

When I was back in college eight years ago, I recall similar claims being made about what a great country Pakistan was. One obvious issue with such claims -- why then do Pakistanis crawl to the United States in droves? Even children of wealthy Pakistanis did anything they could to somehow get a work visa here in the US. Why leave such a great country?

[Tech Lahore]

Saif, that's a preposterous notion. By that coin, every country that contributes immigrants to the US must not amount to very much... which would include China, Japan, India, UK, Australia, Germany and pretty much every other country on the planet. I do not know enough about you to say whether or not you crawled from one place to another or whether you were accompanied by droves when you did so, but your generalized insinuation, nonetheless, is ridiculously flawed.

[Anjum]

Even though there has been development in Musharraf era, but I consider it consumer based market development, not industrial development. This consumer based market has put a lot of pressure on imports, making export-import a deficit, rather a surplus.

[Riaz Haq]

According to oDesk, Pakistan experienced 328% growth in its outsourcing business in 2007-8, second only to the Philippines (789%) on a list of seven top locations that include US (260%), Canada (121%), India (113%), the Ukraine (77%) and Russia (43%).

Pakistan ranks number one in value for money for developers and data entry and number two overall behind the Philippines where the cost of answering calls is about half of the cost in Pakistan. Pakistan is well ahead of India and just behind the number 1 ranked United States in customer satisfaction.

[Riaz Haq]

Anjum,
You say, "I consider it consumer based market development, not industrial development."

I think you have a basic misunderstanding of how economies work. Without growing consumer demand, there would be no investment, no development, no manufacturing and no services growth.

In spite of the election-related political turmoil, Pakistan’s economy maintained its momentum in 2007, growing by 7%, slightly more than the 6.6% for 2006. Agricultural sector growth recovered sharply, from 1.6% in 2006 to 5% in 2007, while the manufacturing sector growth continued at 8.4% in 2007, slightly more moderate than the 10% for 2006. Services grew at 8% in 2007, down from 9.6% in 2006.

Please read more at http://www.riazhaq.com/2008/08/musharrafs-economic-legacy.html

[Riaz Haq]

Former Pakistani President Pervez Musharraf faced a hostile audience when he addressed Stanford University students last week in Silicon Valley. Based on reports from The Stanford Daily, the session was characterized by catcalls and vicious attacks on Musharraf when "enraged Indian nationalists and other emotionally charged students questioned everything from the legitimacy of Musharraf’s rule to the inherent corruption of the Pakistani government". The response was "equally defiant" from "finger-wagging" Musharraf. In the end, the session "contributed little to the debate" and created "an intellectually stifling atmosphere for those hoping to foster authentic debate", according to Stanford Daily's editorial.

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I believe it can be safely said that the communications revolution as well as a significant enlargement of the middle class in Pakistan helped sow the seeds of the end of arbitrary actions by President Musharraf. In other words, Musharraf pulled a Gorbachev by enabling powerful resistance to arbitrary rule. Some of these changes are durable and I hope will make our rulers more accountable.

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