Dawn Editorial with topic background, Vocabulary (April 21, 2021)
The digital divide
IN the Economist Intelligence Unit’s annual Inclusive Internet Index report, measuring internet inclusion in terms of availability, affordability, relevance and readiness, Pakistan’s overall ranking has dropped to 90th place among 120 nations; the second lowest ranking country in Asia and the lowest in South Asia. In the midst of a global pandemic that has made the need for internet access even more evident, the report warns that failure to improve conditions may widen inequalities between on- and offline populations. Though there are several improvements that Pakistan has made to improve internet access — chiefly in affordability due to market competition and lowering mobile phone costs — one of the most troubling figures is that of the digital gender parity.
Despite an improvement of six percentage points since the previous year, the report highlights that Pakistan still ranks the highest in the world when it comes to the gender gap. The gap in internet access between men and women is 65pc, and 51pc in access to mobile phones. This massive disparity has been noted in several other reports over the years, including the recent Mobile Gender Gap Report 2020 measuring mobile ownership and data usage in 15 low- and middle-income countries. In a study released in January, the non-profit Media Matters for Democracy found that six out of 10 women it surveyed faced restrictions at home when using the internet. Inequalities across income, geography and gender must be addressed holistically in Pakistan. Access to information is a fundamental right, yet the fact that there are still areas in this country without internet services despite the government’s promises lays bare our commitment to this constitutional guarantee. Digital policies seem to lack ownership; rather, successive governments as well as state institutions have been more intent on policing the internet than enabling access and promoting its use to improve human development. The cost of this failure to imagine the economic possibilities and social empowerment that the internet opens up is ultimately being paid by the most disenfranchised among us.
THE sharp decline in FDI in recent months is worrisome. New State Bank data shows that FDI has plummeted by a hefty 35pc to $1.4bn year-on-year from July to March and by 40pc to 167.6m month-on-month in March. Although Covid-19 has led to a significant decrease in investment across the world during the last one year as investors wait for the crisis to subside, the plunge in FDI flows is not a one-off event in Pakistan. We have seen investment tumble from 2017 as foreign investors, including Chinese companies, do not appear inclined to consider Pakistan as their favourite destination. That is not all. Many foreign firms have sold their businesses and exited Pakistan for good. The Italian oil and gas major, ENI, is the most recent example. Historically, FDI flows have constituted less than 1pc of the nation’s GDP while comparable economies have attracted foreign investments equal to or over 3pc. The only time Pakistan saw an FDI ‘boom’ was during the mid-2000s when foreign investors brought their capital here to invest in the power, financial, oil & gas exploration and telecom sectors, and during the mid-2010s when China bankrolled expensive power and transport projects under the multibillion-dollar CPEC initiative. There were numerous reasons, such as energy shortages and poor security conditions, for the lacklustre response of foreign investors to attractive policy packages that successive governments announced in the last decade and a half to woo them.
Now, with the energy shortages taken care of and improved security conditions, the continuous decline in FDI flows underscores policy issues that the government must address to make this country attractive for foreign capital. This needs to be done urgently as the world is expected to return to normalcy before the end of 2022 as most people across the continents get inoculated against the coronavirus, and companies reconsider their investment plans for markets like Pakistan. With China becoming less attractive for global capital because of an aging population and increasing labour wages, both Chinese and Western firms are looking for new destinations. Luckily for Pakistan, Vietnam and Bangladesh have also lost some of their lustre for international investors. This leaves us with large room to market Pakistan’s potential to foreign companies and influence their investment decisions. But for that to happen, the government will need to draw up a proper strategy and reform its policies to make them predictable and bring consistency to them.