KARACHI, November 19 2024: Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA), has issued a strong warning regarding the severe impact that an internet slowdown and the blocking of Virtual Private Network (VPN) services could have on Pakistan’s burgeoning IT industry. According to Sajjad, such a move would pose an existential threat, leading to massive financial losses, service disruptions, and reputational damage in the export of IT and IT-enabled Services (ITeS). The IT industry’s exports, which reached a significant $3.2 billion in FY24, are at risk, he stated.
Sajjad emphasized that even conservative estimates show the IT sector could suffer losses amounting to tens of millions of dollars in the short term. However, the longer-term impact, including reputational damage, would be far more devastating. He highlighted the competitive global landscape for IT and ITeS, noting that such measures would deal a crushing blow to one of Pakistan’s fastest-growing industries. The repercussions would not be confined to the IT sector alone, Sajjad warned, as the sector has become integral to virtually all industries.
In his address, the P@SHA Chairman explained that domestic and international IT companies would be forced to shut down or scale back their operations significantly, which would have disastrous consequences for export revenues, employment generation, and skills development in Pakistan. This would also undermine P@SHA’s ongoing initiatives, which are being supported by the Ministry of IT & Telecom (MoITT), the Special Investment Facilitation Council (SIFC), and the Prime Minister’s Office (PMO).
“We are wholeheartedly aligned with the government’s fight against terrorism in all forms – physical, psychological, financial, or cyber terrorism – which might misuse the internet,” Sajjad clarified. “However, we believe the economic well-being of the country, including IT exports, is critical to overcoming the persistent crises of balance of payments, the current account deficit, and the socio-economic issues arising from unemployment, poverty, and lack of skills development.”
He further emphasized that Pakistan’s IT and ITeS exports, which have been growing at an average of 30% annually, are projected to reach over $15 billion in the next five years, provided the government ensures the continuity of favorable policies in export, fiscal, SME, infrastructure, and IT sectors.
Sajjad explained that if VPNs are blocked, most IT companies, call centers, and BPO organizations in Pakistan could lose major Fortune 500 clients, as global companies view VPN connections as a security and privacy essential. “Data protection and cyber security are paramount for our clients,” he stated, stressing that no international organization tolerates security breaches.
The P@SHA Chairman also pointed out the indirect effects of the VPN ban, including the loss of livelihoods for remote workers and freelancers, who could face significant business interruptions or the collapse of their ventures. IT companies and freelancers might even be forced to establish operations overseas, leading to a dramatic increase in operational costs, which could reach between $100-150 million annually.
In conclusion, Sajjad called for a strategic, well-thought-out approach to the situation, urging the government to avoid a blanket VPN ban. Such a decision would have long-lasting and irreparable damage on Pakistan’s IT industry, which could take years to recover from. He strongly urged the government to collaborate with P@SHA, industry leaders, and other stakeholders to develop a balanced framework that protects national security without compromising the operational needs of the IT industry. P@SHA is ready to offer its full support and expertise in organizing an immediate roundtable discussion to craft effective measures that ensure both security and the growth of Pakistan’s IT exports.
