An answer to the energy crisis

Pakistan is presently passing through an unprecedented energy crisis. The demand exceeds supply and hence load-shedding is a common phenomenon through frequent power shutdowns. Pakistan needs about 18,000 MW per day. Presently, it can produce about 13,000 MW per day and thus there is a shortfall of about 5000MW per day. This shortage is badly affecting industry, commerce and daily life of people.
The demand for natural gas and oil has increased manifold, likely to burden the economy further as a result of the growing Middle East crisis. The government has planned major initiatives including three gas import pipelines, Gwadar port as energy hub and LNG import to meet energy shortage. Pakistan’s economic growth is heavily reliant on its textile industry, contributing over $10 billion annually in terms of foreign exchange by consuming the total cotton crop. During last fiscal year, textile industry exports contributed $14 billion in country’s total exports of $25 billion. But it is also true that textile industry is losing 30 per cent of the production due to prevailing energy shortage. Installation of Captive Power Plants (CPPs) by the spinning industry has also failed to deliver desired results, as availability of gas as a cheap fuel for these CPPs is becoming a question mark with every passing day. The textile industry was already denied gas for over 100 days during the last fiscal. It is also for the first time in the history that the SNGPL has cut the supply to the textile industry during summer this year. Textile industry has yet to witness the worst in coming winter. The government is fully attentive to the fact and trying its level best to ensure uninterrupted electricity and gas to the industry.
Unlike India, Pakistan’s IT sector consists of a web of small firms and many of the entrepreneurs started from very low levels to make entry in the business. The industry revenues are exceeding $2 billion a year and are projected to reach $11 billion by 2016, according to Pakistan Software Houses Association (P@SHA). Many firms are seeing their sales grow at an annual rate of over 30 per cent. This target can be achieved much earlier than 2016 provided the government is supportive the growth of IT industry. Pakistan has been able to achieve these growth rates despite ranking 120th on the infrastructure and logistics components of the World Bank’s Logistics Performance Index.
The Pakistan Software Export Board (PSEB) has recently been quoted in the press that Pakistan is producing around 25,000 IT professionals every year to meet growing requirement of domestic and international markets. Out of total number of such professionals, approximately 50 per cent enter the job market, according to the data. At present, an estimated 150,000 IT professionals are available in Pakistan against around three million IT engineers in India. However, the current pool of IT experts and engineers available in the country is not sufficient to meet domestic requirements. To achieve targeted results, the government needs to take several steps to increase the number of IT experts and engineers with a focus on the growth of skilled human resource pool for the country’s IT industry. India’s software and services exports have been rising rapidly. The annual growth rate is around 45 per cent in IT services and nearly 55 per cent in IT-enabled services (ITES), such as call centres, Business Process outsourcing (BPO) and other administrative support operations. Together they are grown to 25 per cent per annum. Despite the fact that Indian share in the world market for information technology services is yet very negligible, this sector has been growing at a scorching pace, helped by a large pool of English speaking workers, nearly three million engineers and the increasing tribe of tech-savvy entrepreneurs in the country. The information Technology industry currently account for seven per cent of India’s GDP. Software service exports in India increased from US$0.50 million in 1990 to $5.9 billion in 2000-01 to 23.6 billion dollars in 2005-06 recording a 34 per cent growth with a compound annual growth of over 25 per cent per annum until 2010. The impact of software and IT enabled service exports of around $60 billion on the economy is likely to be profound. Having a strong Pakistan IT industry is very much possible with concerted efforts on the part of the government, and host of other factors like private initiatives, emergence of software technology parks, clustering and public private partnerships. India formulated the national vision to promote software industry in India in the early 1980s and took its IT industry exports to $60 billion in 20 years. Pakistan IT industry has a potential higher than Indian IT industry and earn more foreign exchange in next 20 years provided the required focus of the government is there.

The writer is Chairman and CEO NetSol Technologies and Honourary Consul of Australia for the province of Punjab