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Pakistan is falling behind its regional peers in the digital trade sector due to fragmented regulations, inadequate infrastructure, and poor policy coordination, the Asian Development Bank (ADB) warned in a report released on September 19.
The ADB's study, Digitally Connected Central Asia Regional Economic Cooperation (CAREC): Digital Trade, Emerging Regulatory Challenges, and Solutions, highlighted that despite Pakistan's strategic location linking South and Central Asia, the country has been slow to implement reforms needed for cross-border e-commerce and digitally delivered services, as reported by The Express Tribune. According to The Express Tribune, the report revealed that Pakistan's digitally delivered trade in 2024 reached only USD 7.93 billion, significantly lower than ASEAN countries such as Malaysia (USD 39.04 billion), the Philippines (USD 38.57 billion), and Thailand (USD 50.57 billion). Intra-CAREC trade, excluding China, accounts for just 7 per cent of total trade compared with ASEAN's 24 per cent, reflecting weak regional integration. Several CAREC member countries, including Pakistan, have not ratified the UNESCAP Framework Agreement on Facilitation of Cross-Border Paperless Trade, which aims to streamline digital trade and simplify regulatory processes across borders. Banking and financial analyst Ibrahim Amin stated that one of Pakistan's biggest challenges is the lack of consolidated data systems across government and private organisations. "Each department maintains its own separate files, and there is almost no integration," Amin explained. "Until these systems are synchronised internally, it is impossible to compete in digital exports or advanced technologies." The ADB cited underdeveloped digital infrastructure, limited data centres, poor internet connectivity, and weak payment interoperability as major hurdles. Regulatory misalignment, delays in adopting the UNESCAP framework, and an absence of a unified digital regulatory framework further impede growth. Weak consumer protection and fragmented trade facilitation mechanisms also leave Pakistan behind ASEAN economies, which have strong e-commerce laws and digital standards, as highlighted by The Express Tribune. ADB urged Pakistan to adopt a long-term digital trade policy, establish a regional digital single window, invest in smart ports, and enhance digital skills among women and youth. Amin stressed that sector-wide internal consolidation is a necessary first step before Pakistan can integrate with regional and global digital supply chains. "The consolidation of data and internal systems is the baby step. "Only by knowing our own system can we innovate and grow in digital trade," as reported by The Express Tribune. (ANI)
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