Pakistan Pushes Digital Economy Ambitions Amid Investment and Reform Challenges

Pakistan's ambitions to build a modern digital economy are gathering momentum, with policymakers, foreign investors and industry leaders converging around a vision that places emerging technologies at the centre of future growth. Yet alongside rising investment and technological optimism, concerns remain over infrastructure weaknesses and the slow pace of reform.

The latest signal of that ambition emerged at the 10th anniversary of the World Drone Congress in Shenzhen, where Pakistan was designated as the Country of Honour. Addressing delegates from more than 120 countries and regions, Bilal Bin Saqib, Minister of State and Chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA), argued that the convergence of drones, blockchain, digital assets and machine-to-machine technologies would form the foundation of the next industrial era.

In his remarks, he highlighted the potential of integrating drone technology with digitalisation and blockchain across logistics, supply chains, smart cities, data governance, industrial monitoring and emergency response systems. He maintained that blockchain could improve safety, transparency and operational efficiency while strengthening trust and compliance within drone ecosystems.

The minister also underscored Pakistan's efforts to advance its digital economy through a forward-looking virtual assets regulatory framework aimed at supporting innovation and emerging technologies. He said the combination of blockchain and drone technologies could create opportunities for international cooperation and scalable models for future autonomous systems.

Those aspirations are being reinforced by growing interest from Chinese investors. The Prime Minister's Office announced that IBI Beijing United Technology, a leading Chinese technology company, plans to establish its Digital Economy headquarters in Pakistan.

The decision follows a meeting between Prime Minister Shehbaz Sharif and an 11-member delegation led by the company's founder, president and controlling shareholder, Qian Xiaojun. The visit came after the Pakistan-China B2B Investment Conference held in Beijing in September 2025.

Welcoming the delegation, the prime minister described Pakistan and China as 'all-weather strategic cooperative partners' and expressed optimism about the company's plans to promote digital economy cooperation, attract investment and deepen industrial collaboration between the two countries. While official enthusiasm remains strong, a new report by the Overseas Investors Chamber of Commerce and Industry (OICCI) suggests that Pakistan's digital future will depend heavily on addressing persistent structural shortcomings.

The report, titled 'Recommendations for Pakistan's Digital Future', estimates that the digital economy could account for between 5% and 7% of gross domestic product by 2030 if reforms are accelerated and key bottlenecks removed. It describes digitalisation as an increasingly important source of productivity, exports and financial inclusion.

According to the report, information technology and IT-enabled services exports have reached $3.8 billion, while freelancers generated $779 million in earnings. Broadband subscriptions have surpassed 150 million and telecom connections exceed 200 million. The mobile ecosystem alone contributes an estimated $17 billion to the economy.

However, the study warns that infrastructure constraints could limit future expansion. Only around 18% of Pakistan's cellular towers are connected through fibre optic networks, significantly below the global average of roughly 40%, reducing network capacity and readiness for next-generation technologies.

OICCI President Yousaf Hussain pointed to the rapid adoption of digital financial services, noting that the Raast instant payment system processed Rs18 trillion in peer-to-peer transactions during FY26. Nevertheless, he cautioned that regulatory delays and infrastructure deficiencies continue to constrain the sector's broader development.

OICCI Secretary General M Abdul Aleem highlighted another challenge: implementation. He noted that only about a quarter of the recommendations contained in the chamber's 2022 digital report have been executed, emphasising the need for quicker policy action.

To unlock greater economic potential, the report recommends lowering taxes on broadband services and digital devices, expanding fibre optic deployment, improving regulatory certainty around data protection and cybersecurity, and strengthening cooperation between government and industry.

Together, the announcements from Shenzhen, the planned Chinese investment and the OICCI's projections illustrate a country attempting to position itself within a rapidly evolving technological landscape. Whether Pakistan can translate ambition into sustained digital growth may ultimately depend less on vision than on the speed with which it addresses the infrastructure and policy gaps that still stand in its way.