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Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA), said that the slowing down of the internet and blocking of virtual private network (VPN) services will definitely become an existential threat because they will cause irreparable financial loss, service interruptions, and damage to the export of IT and IT-enabled Services (ITeS).
He also mentioned that the IT industry’s exports in FY24 were $3.2 billion, which is a significant figure. With the global competitive landscape changing in this space, Sajjad went on to say that the IT industry will lose tens of millions of dollars in the short term, and huge amounts of money in reputational and intangible damages in the long run.
He went on to say that this would hit one of Pakistan’s fastest-growing businesses particularly hard and that other parts of the economy would feel the effects of this as well, given that information technology is now essential to every business. It was made clear by Sajjad that both local and foreign IT companies will have to shut down or greatly limit their operations in Pakistan. This will hurt Pakistan’s most successful industry in terms of exports, skill development, and job creation.
With the help of the MoITT, SIFC, and PMO, P@SHA is spearheading several helpful projects, but this setback will be devastating to their progress. Furthermore, it will be incredibly disappointing and demoralizing for our IT firms, their employees, start-up entrepreneurs, freelancers, and everyone else engaged in the industry. These individuals are making tremendous efforts to position Pakistan as a leading destination for global technology.
VPN Access Crucial for IT Exports and Economic Stability
He elaborated by saying that the IT sector fully supports the government’s efforts to combat terrorism in all its manifestations, including cyber terrorism as a result of abuse of the internet. Still, he went on to say that the country’s exports and economic health are crucial to solving the country’s ongoing balance of payments (BoP) and current account deficit (CAD) problems as well as other socioeconomic challenges like poverty, unemployment, and a lack of training and education.
The chairman of P@SHA informed the members that exports of information technology (IT) and information technology enabled services (ITeS), which rely largely on virtual private networks (VPNs), have been increasing at a rate of 30 percent annually and are projected to reach $15 billion USD in the next five years, given that the government maintains consistency in its policies regarding exports, finances, small and medium enterprises (SMEs), infrastructure, and IT.
He elaborated by saying that if VPNs were to be blocked, many Pakistani IT firms, call centers, and BPOs would lose clients from Fortune 500 companies and beyond. This is because protecting client data and cyber assets is a top priority for these companies, and connecting to client systems through VPN is a typical practice, basic expectation, and standard worldwide. Also, no foreign business, no matter how big or small, will let any private or public institution mess with its security protocols.
VPN Ban Could Devastate IT Sector and Freelancer Businesses
Sajjad emphasized that the projected monetary losses do not account for the unavoidable demise of remote workers’ and freelancers’ means of survival and advancement, since they may see a complete shutdown of their businesses or substantial setbacks.
He insisted that Pakistan’s thriving IT industry and its young, energetic freelancers will face excessive operational costs when they set up shop abroad. He went on to say that the IT industry could see an annual rise in operational expenses of $100 million to $150 million due to VPN blocks.
Finally, he stressed the critical importance of planning strategically about the situation ahead of time, not reacting hastily, and avoiding a blanket ban on VPNs, which would have a devastating effect on the IT sector and exports, from which they would take years to recover.
He urged the government to consult P@SHA, business moguls, and other interested parties in order to craft a safe and sound framework that would protect Pakistan’s economy and its citizens from loss without compromising the IT industry’s ability to function.
