On Friday, the Pakistan Business Council (PBC) issued a warning that several multinational companies are either planning to relocate their back offices from Pakistan or have already done so, citing widespread internet disruptions caused by recent firewall implementations.
This caution comes in the wake of a Dubai Chamber of Commerce report indicating that between January and June 2024, 3,968 Pakistani companies registered in Dubai. This figure places Pakistan as the second-highest on the list and represents a 17% increase from the 3,395 firms registered during the same period in 2023. In total, the Dubai Chamber of Commerce registered 8,036 new Pakistani businesses last year.
The rise in Pakistani businesses based in Dubai underscores a growing exodus from Pakistan, which is already struggling with high unemployment and sluggish economic growth. With hundreds of thousands of workers having left the country and millions more seeking opportunities abroad, the situation is becoming increasingly dire.
The PBC’s statement highlighted that many multinational companies are moving their operations due to severe internet disruptions caused by recent firewall implementations. This trend reflects a deeper loss of confidence in the government’s economic policies, exacerbated by factors such as high business costs, political instability, soaring electricity prices, and deteriorating law and order.
The PBC also criticized the government’s handling of the firewall, noting that it not only affects power generation but also threatens the nascent software sector by impacting employment and exports. The tech industry has warned that these disruptions could cost Pakistan up to $300 million, urging authorities to correct the implementation of the firewall to avoid further damage to employment and exports.
Additionally, the Overseas Investors Chamber of Commerce and Industry (OICCI) cautioned that frequent internet disruptions could hinder Pakistan’s economic progress. The Pakistan Software Houses Association echoed these concerns, describing the disruptions as a serious threat to the industry’s viability and estimating financial losses that could reach $300 million or more.
