KARACHI: The Pakistan Business Council (PBC) has warned that many multinational companies are considering relocating their back offices from Pakistan, with some having already made the move.
This development comes as the Dubai Chamber of Commerce reported that 3,968 Pakistani companies registered in Dubai between January and June 2024, making Pakistan the second-highest on the list. This number is 17% higher than the 3,395 firms registered during the same period in 2023. Last year, a total of 8,036 new Pakistani businesses were registered in Dubai.
The increase in Dubai-based Pakistani businesses signals a growing trend of businesses leaving Pakistan, a country already facing high unemployment and slow economic growth. As many skilled and unskilled workers have left Pakistan, millions more are reportedly seeking opportunities abroad.
High-Speed Connectivity Is Crucial
The PBC highlighted that multinational companies are either planning to move or have already moved their back offices out of Pakistan due to ongoing internet disruptions caused by the implementation of a firewall across the country.
This shift reflects a deepening lack of confidence in the government’s economic policies. Factors such as high business costs, political instability, soaring electricity prices, and worsening law and order are contributing to this trend.
“We are not only dealing with the costs of idle capacity in power generation, leading to unemployment and loss of exports and tax revenue, but now we face the threat of idle capacity in the growing software sector due to poor firewall management,” the PBC said.
The tech industry has voiced concerns over the recent internet slowdown, warning that it could cost Pakistan up to $300 million. The PBC urged authorities to either implement the right firewall or apply it correctly to avoid negative impacts on employment and exports.
The council also emphasized that sectors like IT, agriculture, and tourism offer valuable opportunities to achieve the Prime Minister’s export targets over the next three years. High-speed internet is crucial for both the domestic economy and these sectors.
The Overseas Investors Chamber of Commerce and Industry (OICCI) also warned that frequent internet disruptions could hinder Pakistan’s economic progress.
The Pakistan Software Houses Association stated that these disruptions are not just inconveniences but a direct threat to the industry, potentially causing financial losses estimated at $300 million, with the risk of even higher losses.