Table of Content

2

Source: Waverman, L, Dasgupta, K., (2010), LECG, Connectivity Scorecard 2010

Infrastructure

Usage & Skills

Infrastructure Infrastructure

Usage & Skills

Usage & Skills

Government

Consumer

Business

Current Situation [ICT] 1.a

Countries E-readiness(out of 70)*

Prioritization of ICT

Staff training Training services

Pakistan 66 74 112 99

China 56 17 50 47

India 58 19 34 32

Indonesia 65 71 33 48

Malaysia 38 14 16 26

Singapore 7 1 2 1

Why is e-commerce still at an infant stage?

Current Situation [ICT]

Lower number is higher in ranking; 133 is the lowest rank

Source: The Global Information Technology Report 2009-10*The 2009 e-readiness rankings, Economist Intelligence Unit

1.a

Current Situation [Transport]

Source: Doing Business in Pakistan 2010, World Bank

1.b

Current Situation [Transport] 1.b

Source: Doing Business in Pakistan 2010, World Bank

Improving Productivity through better Connectivity

7

• Industrial Information Network (IIN) to enhance productivity through:

– Online product catalogue and other marketing tools

– Up to date business information and market analysis(source: SMEDA)

• An additional broadband line for 100 people increases productivity by approximately 0.1%(source: Economic Impact of Broadband: An Empirical Study, 2009)

• If road and rail network expand from 2.4 meters/acre to12.1 meters/acre, growth in GDP will be higher by 1.4 % (Calderon and Serven, 2004)

2.a

Integrated Management of Cities

8

ICT-enabled connected

governance

Source: UN E-Government Survey 2008

2.b

Promoting Domestic Commerce

9

• 3% loss in trade of perishable goods if there is a delay of one day (Doing Business in Pakistan 2010)

• ICT-based back and front office to promote businesses via:– reduced transaction costs– enhanced transparency and hence promote trust between businesses– greater innovation in service delivery

(source: UN E-Government Survey 2008)

• Infrastructure development in poor regions reduces production and transactions costs (Gannon and Liu, 1997), which serves as a stimulus for domestic commerce

2.c

Inspiring Youth

10

• Better internet access opens the whole world of ideas to users thus promoting entrepreneurship e.g. ‘www.ted.com’

• Improves information flow in job market through university dedicated job portals like ‘qau.rozee.com.pk’

• ‘Shell Tameer’ program provides free information, advice and support to youth for developing their entrepreneurial skills

2.d

Invigorating Community Development

11

• Broadens the platform where one could interact with the online community, e.g. pakwatan.com and facebook.com

• Internet access leads to community development (Mason, 2003)

• Poor households of rural communities in Viet Nam with paved roads - 67% higher probability of escaping poverty (Glewwe et. al, 2000)

2.d

Poor connectivity and constraints on springboards of NDA

12

Productivity losses• More than 30% of agricultural output is currently wasted (Planning

Commission) due to inadequate farm to market roads, lack of cold storage facilities and obsolete and underpowered trucking fleet.

Fragmented internal markets• Significant price differentials in markets due to trucking speed of half of

that in EU and

(World Bank, 2010)

Unfriendly Cities: Public transport• Unorganized and infrequent public transport with no safety and quality

control has forced people to resort to some sort of private transport.

Ill informed youth• Poor university-industry nexus in Pakistan is exposed youth to high risk

of acquiring irrelevant skills. Pakistan is ranked 92 out of 133 countries.

Rail Freight Productivity 1/3rd of India 1/8th of China

ICT

• Limited coverage and fewer local applications

• Old copper transmission lines

• No legal cover for electronic signatures

Road and Rail

• Rail spending- Rs.40bn• Road spending - Rs.141bn

• Poor rail freight & higher trucking charges

• Long clearing times & higher costs at dry ports

• Excessive burden on National Highways

ICT

• Provision of online services e.g. Paying taxes

• Training institutes and rural internet access

• Electronic Signature Act should be passed

Road and Rail

• Independent regulatory body for Railways

• Pakistan Railway (PR) should be privatized

• Good practices -Sialkot Dry Port Trust model

• Electronic customs declaration form

• Pakistan’s Customs Computerized system

ISSUES AND REFORMS FOR CONNECTIVITY 3

2004-09

Aviation

• Long delays on local flights

• Few direct flights to US, China and EU

• No direct flights to South East Asia and Africa

•18 hour journey to US can take up to 26 hours

Aviation

• Routes should be auctioned

• All airports should be privatized

• PIA should also be privatized

• Sixth freedom right should be introduced

ISSUES AND REFORMS FOR CONNECTIVITY 3

Regulators• Are also market participants

• Preferential treatment towards government Owned Organizations

• Weak implementation of quality control

• Too many restrictive conditions

• Lengthy documentation period

Regulators• Should only be umpires

• Instead of subsidizing service providers, a competitive environment must be provided

• Must ensure minimum quality controls

• No compulsory operational requirements • Time limit for responding to applications

• Fiscal incentives should be replaced with deregulated competitive market environment

• Training institutes should be established in rural areas and ICT access must be provided to government schools

• An independent regulatory body should be created for Transport sector (Railways and Trucking) to promote unbiased policies

Conclusion