By: Mian Wasif Ali
The federal budget for 2025-26 lands at a make-or-break moment. With Pakistan’s economy fragile, investor trust shaken, and unemployment rising—especially among the youth—the tech sector still stands as a rare, resilient lifeline. Yet, even this flicker of hope risks being extinguished under the weight of half-hearted policymaking and shallow slogans.
For years, we’ve heard catchphrases like Digital Pakistan, Startup Pakistan, and IT Export Revolution ring across podiums and press releases. But beyond the headlines, the numbers—and the policies—don’t follow through. The latest budget is no exception. While there are nods to startups and digitisation, they feel more like marginal footnotes than strategic priorities.
There is no real investment in expanding fibre broadband, no serious effort to fix our woefully outdated licensing systems, and no cohesive cloud procurement strategy. The Universal Service Fund remains critically underutilized. Emerging technologies like AI, cybersecurity, and cloud computing—the very tools shaping tomorrow’s economies—barely earn a mention. These are not futuristic luxuries; they are present-day necessities.
The glaring omission of public cloud infrastructure investment is particularly alarming. Around the world, countries are developing sovereign cloud frameworks to ensure data privacy, digital sovereignty, and efficient public service delivery. Yet Pakistan continues to spend extravagantly on foreign software licenses while ignoring the foundational reforms needed to localise global cloud providers like AWS, Microsoft, or Oracle. It’s not about prestige—it’s about control, security, and economic logic.
Contrast this with Gulf nations like Qatar and Saudi Arabia, which have successfully attracted global cloud investments. Pakistan, with a far larger youth base and digital potential, has failed to do the same—not for lack of talent, but for lack of political coherence and regulatory vision.
Fixing this requires more than just tax breaks. We need a structural reboot—overhauled licensing processes, a transparent cloud procurement policy, and enforceable, internationally-aligned data protection laws. Only then will serious global players consider investing here.
And then there’s the stagnation in IT exports. Despite our global diaspora and technical talent, Pakistan’s tech exports remain stuck at around $3 billion—a number that hasn’t moved meaningfully in years. Trade delegations fly out to global expos under the guise of promotion, but without strategic follow-ups, market insights, or embassy alignment, it’s all smoke and no fire.
A real export strategy would mean identifying high-demand regions using data, mobilising diaspora commercial networks, and aligning visa, trade, and digital marketing policies. Forex retention cards and a robust Digital Export Facilitation Portal would go a long way in reducing friction for exporters—but the budget offers little clarity or commitment on these fronts.
Startups—often heralded as the engine of tech growth—remain heavily under-served. Seed funding is scarce, innovation is throttled by regulatory inconsistencies, and public innovation agencies like Ignite remain underfunded. The promise of an inclusive tech ecosystem is little more than symbolic when women-led ventures and regional entrepreneurs are left to fend for themselves.
To change this, we need a Tech Growth Fund underwritten by the state, tax holidays for early-stage startups, and regulatory sandboxes that allow safe experimentation in fintech, healthtech, agritech, and edtech. This isn’t a wishlist—it’s a minimum viable step if we want to avoid brain drain and unlock domestic innovation.
Taxation is another killer. With overlapping provincial levies, ambiguous compliance procedures, and advance income taxes, digital businesses are boxed in from the start. Freelancers and software exporters still struggle to remit their earnings. It’s disheartening that the FY26 budget ignores these friction points entirely.
We urgently need unified, digital-first taxation—zero-rating in-house developed software, reintroducing long-term exemptions for exporters, and establishing a single window for all digital tax compliance. Without this, we’ll continue to lose talent to more welcoming economies.
Behind all of this dysfunction is a fundamental governance gap. There is no central digital transformation authority. Ministries operate in silos, with redundant platforms, duplicated projects, and no accountability. A Central Digital Governance Authority is not optional anymore—it’s a national imperative. This body should have legal authority, a cross-ministerial mandate, and performance tracking capabilities to enforce consistency and results.
And then there’s the elephant in the room: talent development. While the budget makes passing references to skills, it offers no vision for aligning education with the future of work. Pakistan has a massive youth population but lacks a coherent national digital skills strategy.
We need a National Digital Skills Fund, backed by global tech leaders like Microsoft, AWS, and Cisco, and a complete overhaul of the school curriculum to embed computational thinking and STEM literacy. Training should be outcome-based and industry-led, not just another NGO-driven checkbox.
Ultimately, the FY26 budget seems more like an exercise in fiscal compliance than a roadmap for transformation. It may check the IMF’s boxes, but it doesn’t address the urgency of economic reinvention. While other countries roll out AI strategies, cloud parks, and targeted tech investment campaigns, we’re still debating whether digital transformation is worth the effort.
Here’s the truth: it’s not just viable—it’s vital. Our youth can’t wait. Our economy can’t wait. And the world certainly won’t wait for Pakistan to catch up.
The technology economy could be the engine that propels us out of this crisis. But that engine needs fuel—infrastructure, incentives, and intent. It needs direction—clear policy, governance, and reform. And above all, it needs commitment.
The time for symbolic announcements is over. We must now deliver systemic change, or risk being left behind for good.
Disclaimer: The views expressed here are the writer’s own and do not necessarily reflect those of this publication.
