Role of Information & Communication Technology in Economic Development

By: Raja Taimur Hassan

More open ICT policies contribute to higher GDP.  ILLUSTRATION: Raja Taimur Hassan

More open ICT policies contribute to higher GDP. ILLUSTRATION: Raja Taimur Hassan

Islamabad: 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 only. 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.

The writer is a public policy analyst and works at Sustainable Development Policy Institute, Islamabad.

Note: The article first published in monthly Economic Affairs.

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