Pakistan’s Digitalization Journey Faces Roadblocks Despite China’s Help

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China has promised to enhance its cooperation for the ambitious Digital Silk Road (DSR) project but Pakistan’s low digital economy and shortage of digital talent are putting major roadblocks in the realization of the project. During the Belt and Road Initiative (BRI) international cooperation summit forum in 2017, Chinese President Xi Jinping proposed to enhance cooperation with Pakistan in vast areas of the digital economy, artificial intelligence, nanotechnology, and quantum computing, reported Islam Khabar. There were a few attractive takeaways for Pakistan in China’s DSR pitch. However, Pakistan needs to look into its broken digital architecture which is not in alignment with China’s Digital Silk Road hopes.

There is a wide gap in Pakistan’s digital progress in terms of gender. There are cultural barriers and terrorism. All of this is a setback for Pakistan. Though China has sold dreams to Pakistan under DSR there are hard facts that prove that the plan is farfetched.

Pakistan’s overall GDP is USD 280 billion and the per capita GDP of less than USD 1,400, according to World Bank data 2021. With this low level of economic base, the situation is wary for Pakistan to be able to play a similar kind of role as China in the DSR project.

President Xi announced the initiative during official visits to Kazakhstan and Indonesia in 2013. The plan was two-pronged: the overland Silk Road Economic Belt and the Maritime Silk Road. The two were collectively referred to first as the One Belt, One Road initiative but eventually became the Belt and Road Initiative.

Pakistan and China may target for same goals but the ground reality continues to be in stark contrast. Be it economic development, digital infrastructure, internet penetration, and the size of online commerce– all of these parameters are very different for each of the countries. The digital gender gap in Pakistan’s society is particularly striking. It is mainly attributed to low levels of female literacy, insufficient ICT skills, and low affordability. In 2021, Pakistan had more than 100 million mobile broadband subscribers of which only 21 million were females, reported Islam Khabar.

Female usage of digital services is not the same as that of the male counterpart. There is perceived safety and security and households do not approve of the use of the internet by females. This makes women’s participation in digital activities small.

Leaders of many developing countries, as well as some developed ones such as South Korea, have signed DSR agreements. Although these MOUs are not legally binding, they show the scope of global interest in the DSR. Countries in Africa, the Middle East, and parts of Eastern Europe, Latin America, and Southeast Asia desperately need inexpensive, high-quality technology to expand wireless phone networks and broadband internet coverage. Overall, the world’s infrastructure financing gap is projected to reach nearly $15 trillion by 2040.

DSR-related investments can help fill that gap and spark growth by providing or helping finance this critical infrastructure. Chinese firms are bringing additional benefits to developing countries by establishing training centers and research and development programs to boost cooperation between scientists and engineers in these countries and their Chinese counterparts, and to transfer technical knowledge in areas such as smart cities, artificial intelligence, and robotics, and clean energy, among others. There are about 46 million social media users in the country, with male facebook users being five times more than female ones; indicating a 70 PC gender gap here, according to the data quoted by the media portal.

According to State Bank of Pakistan (SBP) data, only 29 percent of adult women have a bank account, and 25 percent have a cell phone. Only 18 percent of the women have a corresponding digital bank account and the gender gap in digital finance stands at 64 percent. Even though Pakistan is trying to move towards a digital economy, cash remains the primary mode of payment. Almost all retailers and suppliers feel that cash transactions are safer than online ones. Most wages and salaries are still being paid in cash. This is created a significant hurdle in giving an impetus to the digital economy.

With this poor state of affairs of Pakistan’s digital economy and activities, cooperation with China offers no immediate fix for it. If one really wants to resolve these key issues, there is an immediate need for the training of professionals at a large scale. However, this too will take years. Cyber attacks in Pakistan are also rampant. Various institutions and citizens become frequent victims of cyber attacks. This exposes the poor state of the IT system. Not even government institutions are spared. Instances of government websites being hacked and sensitive data stolen by foreign actors are getting more common.

Despite concerns raised by developed states and some developing countries about aspects of DSR, Beijing will keep pushing forward. China has already spent an estimated $79 billion [PDF] on DSR-related projects, and its DSR assistance will likely grow substantially throughout the 2020s. At major China-sponsored international summits such as the World Internet Conference and the Belt and Road Forum, Beijing has promoted [PDF] DSR as a top Chinese priority. As the Digital Silk Road expands, the conflicts around it—between countries signing up for DSR and those concerned about its downsides and between groups within countries worried about its detrimental effects and some governments that stand to benefit—will only intensify.