Pakistan Plans Internet Safe Zones for IT Sector

Pakistan’s Ministry of Information Technology and Telecommunication is developing a policy to exempt Special Technology Zones (STZs) and incubation centers from future internet shutdowns, responding to mounting pressure from the country’s vital IT sector.

The initiative comes as the industry grapples with significant economic challenges, with immediate losses estimated at $420 million due to internet restrictions and VPN limitations. Industry experts warn that long-term damages could exceed $1 billion, following a 30% decline in order bookings.

Pakistan’s IT and ITeS exports, currently valued at $3.2 billion and growing at a 22.6% compound annual growth rate, represent one of the economy’s fastest-growing sectors. The industry employs over 600,000 skilled workers and 2.37 million freelancers, supporting approximately 3 million households. With stable policies and infrastructure, exports could reach $15 billion by 2030.

However, the sector’s growth faces serious challenges. Pakistan scores just 27 out of 100 in Internet Freedom, significantly lower than competitors like India (50) and the Philippines (61). Daily losses from internet disruptions amount to Rs1.3 billion, with hourly losses reaching $1 million during outages.

The proposed exemptions aim to protect STZs and incubation centers from future disruptions, ensuring business continuity for IT companies. The current impact includes $320 million in direct revenue loss, $20 million in compliance costs, and $126 million in freelancer productivity decline.

This policy shift could mark a crucial turning point for Pakistan’s digital economy, as the government balances national security concerns with the IT sector’s economic potential.