Digital Silk Road: Challenges for Sino-Pak Cooperation

Five years after its announcement by China, the ambitious project of Digital Silk Road (DSR) is struggling to find a foothold in Pakistan. During the Belt and Road Initiative (BRI) international cooperation summit forum in 2017, Chinese President Xi Jinping had proposed to enhance cooperation with Pakistan in vast areas of digital economy, artificial intelligence, nanotechnology and quantum computing.

One of the earliest takeaways for Pakistan was the laying of a cross-border fiber optic cable which would further connect to a submarine cable in the Arabian Sea to provide service to countries participating in BRI and Europe. Pakistan sees this as a strategic move to circumvent telecommunication apparatus which involves Indian companies. In 2017, the Special Communications Organization (SCO) which is the telecommunications branch of the Pakistan Army, had told Pak parliamentary committee on Information Technology that much of country’s internet traffic was routed through India. This raised fears that sensitive data was vulnerable to hacking which prompted Pakistan to look for an alternative network to service Gwadar.

For China, building a quick and safe route for internet traffic to Europe through a dedicated line managed by the Chinese is vital. DSR also promises support to Chinese technology exporters currently facing heat from governments worldwide in form of sanctions or exclusions from their network building projects. The project is thus a business opportunity for many well-known Chinese technology companies who will get sure access to build telecommunications networks in BRI participant countries.

          Nevertheless, with all the noise around DSR, several roadblocks in Pak economy and digital society are bound to prevent early implementation of DSR’s components in the country. The impediments include low base of Pakistan’s digital economy, the shortage of digital talent and lack of matching economic activities. Moreover, there is a wide gap in Pakistan’s digital progress in terms of gender, region, urban and rural areas, cultural barriers and terrorism, etc. Against the dreams sold to Pakistan under DSR, stand some hard facts which prove that the plan is farfetched, if not impossible. With overall GDP of $280 billion and per capita GDP of less than $1,400 (World Bank: 2021), Pakistan’s level of economic base is relatively low. Moreover, as a country, Pakistan is very different from China in terms of its level of economic development, digital infrastructure, internet penetration and the size of online commerce.

The digital gender gap in Pakistan’s society is particularly striking. It is mainly attributed to low level of female literacy, insufficient ICT skills and low affordability. In 2021, Pakistan had more than 100 million mobile broadband subscribers of which only 21 million were females. For various reasons, including perceived safety and security, households do not approve of the use of the internet by females making women’s participation in digital activities quite limited. There are about 46 million social media users in the country, with male facebook users being five times more than female ones; indicating a 70 % gender gap here.

Females lag behind in financial inclusion as well. According to State Bank of Pakistan (SBP) data, only 29% of adult women have a bank account, 25% have a cell phone. Only 18% of the women have a corresponding digital bank account and the gender gap indigital finance stands at 64%. Despite the official efforts to advance digital economy, cash remains the primary mode of payment in Pakistan, still dominating economic activity, with virtually all retailers and suppliers perceiving it as safe. Most wages and salaries are still being paid in cash, creating significant obstacles to boosting the digital economy.

The present lack of digital talent is further expected to plague Pakistan’s digital growth and cooperation with China offers no immediate fix for it. The problem can only be addressed through training of professionals at a large scale which would take years. Various institutions and citizens alike are subjects of frequent cyber attacks which reveal the state of IT system robustness in Pakistan. Recent years have witnessed instances of government websites being hacked and sensitive data stolen by foreign actors.

Lately Pakistan is seen emphasizing a lot on the use of digital technology in promoting health, education and development of the economy. However, the movement from physical processes to digital ones would require investments and active interventions from various institutions on a long terms basis. Relying on Chinese aid as short term solution to the problem can only deflect the process. There are already concerns that China may deploy DSR to impose its model of technology-enabled authoritarianism on its un-equal BRI partners. The little Iron brother can only pray to be an exception in this !