Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA) – the apex representative body of the Information Technology industry – has warned that the ongoing internet slowdown and the blocking of virtual private network (VPN) services pose an existential threat to the sector. These disruptions are expected to result in unrecoverable financial losses, service interruptions, and reputational damage to Pakistan's IT and IT-enabled Services (ITeS) exports, which totaled $3.2 billion in FY24.
Sajjad further explained that, even by conservative estimates, the IT industry will face losses in the tens of millions of dollars in the short term. The longer-term impact, however, is likely to be even more devastating, with reputational and intangible losses threatening the industry's global competitiveness. This will deal a severe blow to one of Pakistan’s fastest-growing sectors, which has become an integral part of many other industries across the economy, he added.
He made it clear that both domestic and international IT companies operating in Pakistan would be forced to either shut down or significantly scale back their operations, which would have detrimental effects on the country’s export sector, skills development, and employment generation. This, he stated, would represent an irreparable setback to the initiatives P@SHA is championing, with the support of the Ministry of IT & Telecom (MoITT), the Special Investment Facilitation Council (SIFC), and the Prime Minister’s Office (PMO). Furthermore, it would be demoralizing for IT companies, their workforces, entrepreneurs, freelancers, and everyone involved in the sector who are working tirelessly to position Pakistan at the forefront of global technology destinations.
Sajjad reiterated that while the IT industry wholeheartedly supports the government’s efforts in combating all forms of terrorism – be it physical, psychological, financial, or cyber terrorism – the economic well-being of the country must not be overlooked. He emphasized that a thriving digital economy is essential for addressing the country's chronic balance of payments (BoP) crises, current account deficit (CAD), and socio-economic challenges such as unemployment, poverty, and lack of skills development.
The P@SHA Chairman also highlighted that Pakistan's IT and ITeS exports, which have been growing at an average rate of 30% annually, are projected to exceed $15 billion in the next five years – provided the government ensures continuity in export, fiscal, financial, SME, infrastructure, and IT policies.
He explained that the blockage of VPNs would result in the loss of major Fortune 500 clients, as well as other international clients. Data protection and cybersecurity are paramount to these clients, and VPNs are an industry-standard for secure connections to client systems. No international company of any size tolerates security protocol intrusions by private or public institutions. As such, blocking VPNs would effectively cut Pakistani IT companies off from their global clients.
Sajjad also stressed that the financial losses from VPN blockages would not include the potential loss of livelihoods for remote workers and freelancers. Many may lose their entire businesses or see their operations severely hampered, leading to an untenable situation for a significant portion of Pakistan's workforce.
He further noted that, in response to the VPN blocks, IT companies and freelancers may be forced to establish offices and infrastructure abroad. This would result in substantial operational cost increases, with cautious estimates suggesting that such costs could rise by between $100 million to $150 million annually.
In conclusion, Sajjad emphasized the urgent need for strategic foresight in addressing the situation, warning that an unplanned, blanket ban on VPNs would irreparably damage the IT industry and its export potential, with recovery potentially taking years. He urged the government to engage with P@SHA, industry leaders, and relevant stakeholders to develop a balanced and secure framework that protects national security while safeguarding the operational needs of the IT sector and other key economic industries. P@SHA has offered its full support and expertise in organizing an immediate roundtable discussion to devise actionable and effective measures that ensure both the security interests of Pakistan and the continued growth of its IT exports.