Liberalization in CRS The Pakistani Experience Pakistan Software
Liberalization in CRS – The Pakistani Experience Pakistan Software Export Board www. pseb. org. pk
Outline 1. 2. 3. 4. Pakistan’s Economic Growth The IT & Telecom Sector Pakistan’s Commitment to GATS Experience with Liberalization
Pakistan’s Economic Growth
Pakistan – Some Statistics Population = 150 million + n GDP = $96. 1 bn (2004); Growth = 8. 4% n Industrial Growth (2004 -05) = 15. 6% n Total Exports = $14. 4 bn; Growth = 17% n Imports = $20. 62 bn; Growth = 32% n FDI (2004 -05) = $1. 67 bn+; Growth = 61% n
Leading Sectors for FDI- Last 2 Years (2003 -05) Sector Million $ % age Telecom 517. 6 (2004 -05) 221. 9 (2003 -04) 34. 0 (2004 -05) 23. 4 (2003 -04) Financial Services 269. 4 (2004 -05) 242. 1 (2003 -04) 17. 7 (2004 -05) 25. 5 (2003 -04) Oil & Gas 217. 5 (2004 -05) 273. 3 (2003 -04) 14. 3 (2004 -05) 28. 8 (2003 -04) ALL HEAVILY DEPENDENT ON IT
The IT & Telecom Sector
Pakistan’s IT and Telecom Sector n n n Annual IT Market > $ 800 m with growth rate = 30% Increase in Software Exports > 40% (year on year) for last three years. By July 2005, total cellular subscribers reached 14. 1 million showing a growth rate of 156% in one year. Nearly 700 companies ICT Firms; about half are in CRS specifically Total employment = 95, 000 Annual IT graduates = 5, 500+
Whom Do Pakistani Software Companies Sell To Exports vs. Domestic Export-Products Export-Services Domestic-Products 22. 56% 38. 52% 23. 37% Domestic-Services 16. 53% Public vs. Private Sectors Public Sector (Govt. )— Domestic Public Sector (Govt. )— Foreign Private Sector – Domestic Private Sector – Foreign 8. 51% 5. 90% 30. 79% 54. 77%
Main Incentives for IT & IT Enabled Services Industry (in place since 2000) n n n n Tax holiday on IT export earnings until 2016 100% Foreign Ownership allowed 100% repatriation of earnings allowed 5% percent customs duty on import of IT related machinery and equipment 33% annual depreciation of equipment allowed Availability of Export Refinance Presence of technology parks - a one-stop shop for all services
Exports of IT & ITe. S Fiscal Year from July to June
Major IT Companies In Pakistan n n n IBM Microsoft Oracle NCR Siemens Nortel Nokia n n n n ZTE Huawei Motorola Bearing Point Cisco Hyundai Ericsson HP
GATS & Pakistan
Pakistan’s GATS Offer 841 842 843 844 1 -3 ● 4◒ 4◒ ● Full commitment ◒ Horizontal commitment
Experience with Liberalization
n n n Support for Rapid Industrial Growth Public Sector Automation Possibility to export services to other countries e. g. ZTE, Bearing Point, NCR, Oracle, Halliburton Increase in software exports > 40% in the last 3 years Increase in no. of firms registered 1300 % since 1996 Establishment of regional/international service centers
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