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Raja Taimur Hassan

Monthly Economic Affairs Islamabad

Published Date: Aug 12, 2014

Role of Information & Communication Technology in Economic Development

This age of information and knowledge has emerged as a means to
address economic growth and development around the world. Information
and Communication Technology (ICT) has enabled countries to be more
productive, most efficient, and spur their economic growth. Numerous
studies indicate a strong link between ICT and economic growth which
means that open ICT policies contribute to higher GDP. During the past
many years, due to much delay in spectrum auction for next generation,
investors remained reluctant to take any bold decision with regard to
investment in ICT.

The statistics of past 6 years (2007-2012) reveal the sharp declining
trend in investment of telecom sector. According to Economic Survey of
Pakistan 2013-14, only in one fiscal year 2011-12, total investments in
the telecom sector stood around US $240.3 million, as compared to US
$493.25 million in fiscal 2010-11. These statistics show that total
investments in the telecom sector fell by 51.28 percent in 2011-12. But
in the very next two years 2012-13 and 2013-14 (July-March), there is
increase in investments by 96.42 percent and 11.55 percent, where total
investments stood at US $472 million and US $526.5 million respectively.

Apart from that, the telecom sector has contributed a record amount
of Rs. 133 billion and Rs. 124 billion to the national exchequer in FY
2012 and FY 2013 respectively.

Currently, Pakistan has joined the race of 159 countries that have
already adopted 3G/4G technologies. Now after this auction, it is
expected that the telecom sector would revive again and huge investment
would come in the next couple of months, which in turn will enhance
socio-economic development, and increase employment in Pakistan.

Pakistan has a chance to gear up its struggle to make up for the lost
time and transform its economy into value-added information and
knowledge based economy. Any further delay will adversely affect the
poor and the rich alike.

Linking ICT with Agriculture

ICT and knowledge are critical inputs for agricultural development in
the world over. Many studies show that the induction of 3G/4G
technologies and the proliferation of mobile phones across the globe
have raised productivity and income of small farmers. It is true for
poor farmers living in rural areas in Asia and Africa. Updated and
speedy information through mobile applications allows the farmers to
cope with and even benefit from change in weather patterns, soil
conditions and epidemics of pests and diseases.

Pakistan is an agrarian country and the agriculture sector has
undergone tremendous changes over the past few decades. High illiteracy,
weak linkage with research, poor reach to far-off farmers and lack of
awareness are some critical constraint to agriculture development in
Pakistan. Farmers have little information about market prices in urban
areas of their own country. The result of this information asymmetry is
price dispersion. And the same goods sell for widely different prices in
markets merely a few kilometers apart.

Through mobile phones and an integrated ICT approach, which includes
digitization of information and village information kiosks, this problem
can be overcome by informing both producers and consumers of the prices
offered for agricultural products in various locations. This in turn
would significantly contribute to development in agriculture.

Linking ICT with Public Service Delivery

After the adoption of next generation mobile broadband, government at
provincial, district, tehsil and even at union council level can govern
better, teachers can teach and inform better and doctors can diagnose
and treat better. Because this high speed broadband and ICT services,
such as e-education, e-governance, and e-commerce etc., allow government
services to be delivered to the people at their doorsteps. It does not
only help inclusive economic development but also has far reaching
impacts on diverse fields such as prevention of rural-to-urban
migration, women empowerment and even climate change.

Now Pakistan, without any delay, should formulate its own national
broadband plan and framework and create an environment so that
information and communication technologies (ICTs) can reach their full
potential. Moreover, government needs to review tax imposed on telecom
industry in order to encourage investments.