Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA), has issued a stark warning regarding the potential impacts of internet slowdowns and the blocking of virtual private network (VPN) services in Pakistan. He cautioned that such measures could pose an existential threat to the country’s IT and IT-enabled Services (ITeS) sector, leading to significant financial losses, service disruptions, and reputational damage.
Highlighting the importance of the IT industry, which recorded exports of $3.2 billion in FY24, Sajjad emphasized that even conservative estimates suggest the industry could face losses in the tens of millions of dollars in the short term. The long-term reputational and intangible losses could be devastating, especially as the global competitive landscape continues to evolve.
The potential restrictions would deliver a severe blow to one of Pakistan’s fastest-growing industries, with a ripple effect on other sectors of the economy, Sajjad noted. He warned that both domestic and international IT companies might be forced to close or significantly reduce their operations in Pakistan, which would harm the country’s export capabilities, skills development, and employment generation.
Sajjad expressed concern that these measures would undermine the initiatives driven by P@SHA in collaboration with the Ministry of IT & Telecom (MoITT), the Special Investment Facilitation Council (SIFC), and the Prime Minister’s Office (PMO). He stressed that such actions would demoralize and discourage IT companies, their workforce, start-up entrepreneurs, and freelancers who are striving to position Pakistan as a leading global technology destination.
While affirming the IT industry’s support for the government’s fight against all forms of terrorism, Sajjad argued that economic well-being and export growth are crucial for addressing Pakistan’s balance of payments issues, current account deficit, and socio-economic challenges. He noted that Pakistan’s IT and ITeS exports, which rely heavily on internet and VPN usage, have been growing at an average rate of 30% per year and are projected to reach over $15 billion in the next five years, provided there is policy continuity.
Sajjad warned that blocking VPNs would result in the loss of major clients, including Fortune 500 companies, for IT companies, call centers, and BPO organizations in Pakistan. He explained that data protection and cybersecurity are critical to clients, and VPN connectivity is a global standard. Any intrusion into security protocols by private or public institutions is unacceptable to international companies.
He also highlighted the potential impact on remote workers and freelancers, who could face significant challenges in sustaining their businesses. The increased operational costs for the IT industry due to VPN blockages could range from $100 to $150 million annually.
In conclusion, Sajjad urged the government to adopt a strategic approach rather than implementing an unplanned blanket ban on VPNs. He called for engagement with P@SHA, industry leaders, and relevant stakeholders to develop a balanced framework that ensures national security while meeting the operational needs of Pakistan’s IT and economic sectors.
