Special Technology Zones to double Pakistan’s IT industry to $6b

Pakistan is setting up 12 special technology zones across the country within one year to double the IT industry.

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Pakistan with an aim to boost its IT exports is setting up special technology zones across the country. The government set up a Special Technology Zones Authority (STZA) in January to push this task. The body will set up special technology zones in major cities of the country.

STZA has been mandated to double the industry from $3billion to $6billion in two years. Prime Minister Imran Khan launched the STZA in January 2021. STZA is the brainchild of the sub-task force on IT.

Unfortunately, the previous governments did not pay attention to the IT industry which has the potential to turn around the economy of Pakistan.

The Philippines, Vietnam, India and Bangladesh all provided incentives to the foreign investors to set up their tech-related businesses in what is called the special technology zones. It helped created fertile ground for the IT revolution. These zones provided what is called the island of regulation which creates the most favorable conditions for investors to set up their units in a certain area.

These zones give tax breaks, exemption on import of machinery and special incentives to the IT sector. Ease of doing business is promoted in these zones through one window and easy provision of basic necessities such as electricity, communication and telecommunication infrastructure.

Pakistan is trying to replicate this model in the country as the South Asian nation has the right conditions to unlock its ‘IT’ potential. It is the world’s fifth-most nation with 60 percent of its population below the age of 30 who are tech-savvy. No wonder, it is the third-largest contributor of freelancing services.

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STZA wants to unlock the potential of this country in the field of IT. It seeks to create a space for foreign investors, indigenous companies and educational and training institutes. It will help collaborate for Information Technology-driven industrial revolution in Pakistan. The country has also witnessed a boost in tech-based start-ups during the pandemic as investors started to realize the business opportunities in the IT sector.

Through the tech zones, the government will offer a 10-year waiver on corporate tax and imports of any equipment or building material needed for the tech parks.

The Prime Minister said at the launching ceremony of the STZA that collaborative efforts and the correct course of comprehensive national development through these STZs will lead to the utilization of the immense potential of the youth of Pakistan.

150 acres of land has been transferred to the STZA for setting up a special tech zone in Islamabad.

STZA Chairman Amer Hashmi told Bloomberg that Pakistan aims to open a dozen such zones by next year.

“How do you get a Google or Microsoft or Amazon? You attract them and for that, you have to give special incentives, which well I think we would have probably been the last in the region to give,” he said in an interview.

Hashmi previously said that the zones will foster skills development, job creation, technology transfer and new economic value generation.

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If the government is able to formulate and implement policies in the right direction as envisioned under the STZA Ordinance 2020, Pakistan’s IT exports would increase to $5 billion by 2023.