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Pakistan embraces digitalization in 2020 – more people turned to remote working, digital payments, and online shopping

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Pakistan embraces digitalization in 2020 - more people turned to remote working, digital payments and online shopping
Pakistan embraces digitalization in 2020 - more people turned to remote working, digital payments and online shopping

Although 2020 can be called a dangerous year for most sectors of the economy however in 2020, Pakistan embraces digitalization, and boosting e-commerce in Pakistan has been tremendous. Many companies started introducing work-from-home models following the Covid-19 outbreak in Pakistan in late February and a majority considered it a viable choice.

The government declared a full-fledged lockdown across the country around mid-March, which forced companies to either work from home or temporarily shut down before the restrictions were lifted. It was this turning point when the country’s digitalization registered a steep increase.

An industry source, headed by an e-commerce-based start-up, named 2020 the year in which digitalization accelerated and individuals skewed more to Pakistan’s adoption of digital solutions.

In 2020 Pakistanis have changed their mindset and ways of doing any work using digital mediums,” he said. People never took digital media serious like this before and also working from home became top priority in almost every business.

He added that it was not considered respectable to work from home for any career before 2020, but it all changed during the year.

Pakistan embraces digitalization and people understood that digitalization was the only way to sustain economic activity from March 2020 onwards and it had become an integral part of their lives, he said. The official anticipated that more companies will move towards digitalization in 2021.

The State Bank of Pakistan (SBP) outlined in the State of Pakistan’s Economy Report 2019-20 that the move towards electronic channels was unavoidable for government agencies, businesses and households in the light of the lockdown imposed in March.

It added that a sharp growth in internet use across the nation was observed during that period as traffic increased by 15 percent immediately as soon as lockdown was implemented.

In the fourth quarter (89 percent), the highest growth in the use of internet data was reported in FY20, with government agencies, and in particular the central bank, actively encouraging and promoting citizens to use digital communications and payment methods.  After spread of virus, households started using online solutions for buying basics (groceries) and other products.

Since Pakistan’s digital infrastructure was still under construction at the beginning of 2020, the swift digitalization process has faced countless challenges.

Hurdles faced by Pakistanis:

Prime Minister’s Task Force on IT member Parvez Iftikhar mentioned that from other problems one of the main issues for Pakistan’s digital infrastructure is fiber optic penetration is very low due to which digitalization remained slow in 2020.

He also mentioned that many cities of the county had modest penetration of optic fiber whereas small towns etc. don’t have even 4G services and mobile towers.

On the other hand, mobile phone operators have low spectrum which is additional problem, He stressed that as far as ICT was concerned, taxes in Pakistan were still high, which prevented the country from digitalizing itself.

Suggestions:

Iftikhar said that government department must digitalize first and then boost overall digitalization in the country. He said if the leader continues focusing on digitalization, ICT equipment costs are expected to decline, making it easier to enforce the model nationally and attracting more investment by telecommunications and internet firms.

He regretted that, rather than being digital, almost all resources available to people are currently paper-based.

Outlook for 2021:

It remains promising for all stakeholders that digitalization will increase steeply in 2021. Shaffi said that next year e-commerce is expected to rise multiple and even those who remained unfriendly to e-commerce in 2020 will turn to it in 2021.

On the other hand, he said local businesses in Pakistan would continue to observe work from home, but its implementation after the virus was uncertain as it would rely on a lot of factors.

At present, he said, several local businesses have increased work from their home model until June 2021.

Rauf added that digital payments in 2021 will continue well, but the increase seen during the first wave of the pandemic would not be seen because many people had no choice but to make digital payments during the first lockdown.

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