Pakistan Has Become a Hot Spot for IT Outsourcing

BEST OF ECT NEWS:Pakistan Has Become a Hot Spot for IT Outsourcing

By Anthony MitchellE-Commerce Times 12/24/04 5:00 AM PT
The biggest boost to Pakistan's efforts to break into the global IT marketplace came on September 28, when India's finance ministry announced an income tax of more than 36 percent on foreign firms with software, R&D and customer service operations in India. This tax proposal had been in the works since the beginning of the year and is expected to prompt U.S. firms to follow GE's lead in selling off assets in India.

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Why is Pakistan the hot new offshore information technology (IT) destination? This is because of a combination of favorable economic circumstances. Just when many Western managers are finally becoming comfortable with the idea of working closely with Indian IT firms, along comes Pakistan.

Pakistan is shaking off decades of "also ran" status. Funds invested into building educational institutions in Pakistan (when there were not enough jobs to absorb all the graduates from those institutions) are paying off as Pakistan begins to field a modern, highly productive labor force that is the envy of more prosperous but less tech savvy nations elsewhere in the region.

Why Care?

Why should the average Western IT professional, businessperson or IT consumer care? Because we are all going to be buying and using more IT outputs from Pakistan. To be a smarter buyer and user of IT products calls for a familiarity with Pakistan, even for those who do not initially intend to do business with Pakistani firms. We are all part of a global economy and Pakistan is an increasingly important part of that global economy.

The issues that Pakistan faces as it gears up for the global high-tech marketplace are many of the same issues that both advanced and developing economies face elsewhere in the world, as both service providers and service consumers. Pakistan is making no effort to gloss over its challenges, which makes those challenges easier to address.

With a population of 160 million and a land area almost twice the size of California, Pakistan is a smaller and more unified country than most of its neighbors, which increases that nation's chances of solving its own problems and avoiding the mistakes that have plagued neighboring economies.

India Helps Pakistan

The biggest boost to Pakistan's efforts to break into the global IT marketplace came on September 28, when India's finance ministry announced an income tax of more than 36 percent on foreign firms with software, R&D and customer service operations in India. This tax proposal had been in the works since the beginning of the year and is expected to prompt U.S. firms to follow GE's lead in selling off assets in India.

Any Western business manager who initiated or approved the establishment of an IT production or R&D subsidiary in India in 2004 could find that decision to be a career-ending move unless they have built in financial reserves to accommodate both the tax scheme of September 28 and upcoming taxes still on the drawing board.

A proposal is under consideration in New Delhi to tax activities conducted over international private leased connections (IPLCs) that carry most of India's voice and data traffic to and from the outside world. There is also a proposal to replace state-to-state customs duties (octroi) with a national value added tax. Both those tax proposals could be combined into a single scheme.
U.S. IT brokerage firms, their U.S. clients and domestic Indian IT operations will be largely untouched by the September 28 tax scheme. But the traditional offshore migration path of outsourcing to an offshore location first -- before setting up captive operations there -- has been disrupted in India until economic reforms reduce the role of the Indian government in the economy and consequently reduce that nation's revenue requirements.

For Westerners with long-standing personal ties to India, that country's September 28 tax scheme could have both personal and financial consequences. For new Indian workers who hoped for a position with a Western firm based in India, that country's revenue policy will alter careers, lifestyles and futures. Westerners can pack up and look for other another country to set up operations. However, what country?

Pakistan's Advantages

Pakistan is the primary beneficiary of India's decision to tax foreign firms with captive IT operations in India. No other economy can match Pakistan's labor pool of educated English-speaking workers. No other economy can match Pakistan's scalability , reliability and low-cost environment.

Pakistan offers five advantages over India:

1. Western experience: Executives at IT firms in Pakistan often have worked and gone to school in the U.S., which is Pakistan's largest export market. Indian IT firms whose managers have worked in the West are generally more expensive than similarly positioned Indian firms, without always providing noticeable differences in program implementation capabilities. The willingness of Pakistanis to return home from the West stands in marked contrast to most Indians who arrive for school or work in the West and never look back.

2. Professionalism and integrity: The personal integrity of Pakistani managers is easy to identify and appreciate, especially by Westerners with business experience elsewhere in the region. However, the relatively open and trusting nature of Pakistanis has made them easy prey for Indian business brokers who have managed to cheat several Pakistani IT firms by offering to provide them with outsourcing contracts in exchange for up-front fees. The Pakistanis assumed that these Indians were open minded and charitable for coming to help less experienced firms in Pakistan gain access to international contracts, until the Indians took their money and disappeared.

3. Higher labor availability: Fewer holidays in Pakistan means less slippage in staff availability compared to India. IT firms in India are advised to hire a diverse workforce so that members of one community can enjoy important festivals while members of other communities cover the phones and keep production going.

4. Good accents: Pakistan's official language is English. Only Kolkata (formerly Calcutta) and the Punjabi areas of India can come close to competing with accents in Pakistan, where many families speak English at home and where accent neutralization for non-native speakers of English is substantially easier than in India. Language skills and accents provide Pakistan with a major advantage over all other Asian outsourcing destinations.

5. Low cost talent pool: India's top-tier labor force for IT work has been stretched thin in many areas, especially Bangalore, where escalating wage rates, turnover and higher outsourcing prices are reaching critical mass at the same time that the urban infrastructure has exceeded its carrying capacity. Annual turnover rates reported to InternationalStaff.net for most merchant call center facilities in India at the beginning of November are approaching 100 percent. High turnover rates are causing a shift to second tier Indian cities and to Kolkata. Escalating turnover rates are one of the Indian outsourcing industry's dirty secrets. In comparison, Pakistan's top-tier talent pool is largely untapped and turnover rates are less than 20 percent.
Safety and Security

Pakistan is not without challenges, some of which are real (improving the telecommunications infrastructure) and some are exaggerated, especially in terms of the security situation. Once you have lived through a few riots in India, once you have taught yourself how to quickly turn the lights out and lay down on the floor because you are afraid of what might come through the window, then Pakistan doesn't seem so scary anymore.

The biggest danger that Westerners face in South Asia is from automobile accidents, particularly at night. India has over 8 times the number of highway fatalities per passenger mile than the U.S.

If you go looking for trouble, you will find it, whether in the back alleys of Karachi or the parking lots of many suburban U.S. shopping malls. Americans who have worked in both Karachi and Mumbai report that there is no discernable difference in the safety and security situation in both cities. The lack of reporting in the U.S. media on the occurrence of violent disturbances and general strikes in India, versus the close coverage often afforded to Pakistan, has created the illusion that Pakistani cities are somehow more dangerous than cities elsewhere in the region, especially for Americans.

The U.S. Department of State does not maintain accurate statistics on economically or personally motivated attacks against their own personnel in foreign countries. Nor does it collect accurate information on crimes committed against U.S. nationals in foreign countries. This leads U.S. citizens to avoid safe areas (for example, Islamabad) and to incur excessive risks in areas where Americans are routinely victimized (for example, Mexico City).
The U.S. government is not doing a good job at providing assistance for Americans who have been assaulted, robbed or otherwise victimized in foreign countries. If it did, there would likely be some accounting of those efforts, accounting that would demonstrate that Pakistan's major cities have been and continue to be a generally safe place for U.S. businesspeople and their families.

Shared Roles

Pakistan and the U.S. have similar roles when it comes to human rights. Both countries are a beacon of safety and a haven for refugees. The government of Pakistan has not been advertising this fact. The people who have fled to Pakistan from surrounding countries in the region have, on a one-to-one personal basis. They are Pakistan's best ambassadors.
Before making up your mind about Pakistan, talk to people who have left there or have passed through there. Their origins might be different but their stories are often tragically similar. Too often, it seems as if they are all reading from the same script: family members (or themselves) in neighboring countries who have been victimized, jailed, possibly tortured, relatives killed, and all survivors traumatized and dispossessed. Pakistan welcomes them and serves as a place of safety and security.

From Iran, Afghanistan, India and elsewhere they come, seeking the same things that immigrants to the U.S. have always sought: opportunity, liberty, freedom of religion and respect for personal beliefs.

Americans naturally identify with the underdogs, the runners up, the people who are trying harder than anyone else to succeed. This is why many Americans find it easy to identify with Pakistanis.

It is not necessary for Americans to take sides in disputes between India and Pakistan. Taking sides is not required. Long-term peaceful solutions are required.

Increased trade and joint projects between Pakistan and India will pull those two countries together and create incentives for peace. American firms doing business in one or both countries can contribute to peace through responsible business practices and the moderating effects that employment and prosperity provide. This can and should be accomplished when American firms are allowed to operate on an equal footing with local firms, which for now only appears possible in Pakistan.
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STUDENTS CONFERENCE ON ENGINEERING SCIENCES AND TECHNOLOGY(SCONEST 2004)

REGISTRATION FOR SCONEST 2004

VENUE FOR DAY 1:JINNNAH UNIVERSITY FOR WOMENVENUE FOR DAY 2:PAF KIET

STUDENTS CONFERENCE ON ENGINEERING SCIENCES AND TECHNOLOGY(SCONEST 2004) is an annual event, which was held for the first time in 2002.SCONEST2004 covers all disciplines under IEEE domain.This event is being jointly organised by IEEE student branches at Grad School Of Engineering Sciences and Information Technology,Jinnah University For Women,NED university Of Engineering And Technology,PAF KIET in association with IEEE Karachi section. The basic conference theme of this year is "Technologies for Human Prosperity"

PROGRAMS FOR DAY1
TECHNICAL SESSION 1: NEXT GENERATION NETWORKSTECHNICAL SESSION 2: HIGH PERFORMANCE COMPUTINGWORKSHOP: SAPPANEL DISCUSSION 1:INTERNET BANKING
PROGRAMS FOR DAY 2
TECHNICAL SESSION 3:CELLULAR COMMUNICATIONTECHNICAL SESSION 4:BROADBAND COMMUNICATIONPANEL DISCUSSION II:PROSPECTS OF CALL CENTRES IN PAKISTAN.
For more info visit http://www.ieee.org/sconest/2004/For registration please contact :6620857-58-59 6619902

Below are the important dates regarding SCONEST 2004. Please note that these dates are subject to change without notice. Therefore, keep visiting this page to stay updated.

Full Paper Submission November 25, 2004.
Confirmation of Acceptance by Technical Committee December 13, 2004.
Final Camera Ready manuscript due December 18 2004.
SCONEST 2004 Day 1: Jinnah University for Women December 29, 2004.
SCONEST 2004 Day 2: PAF Karachi Institue of Economics & Technology December 30, 2004.


SCONEST 2004 is being organized by the IEEE Karachi Section and IEEE Student Branch members at JUW, PAF-KIET, NEDUET and GSESIT-HU.

Conference Chair
Nadia Naz
(JUW)
Co-Chair
Shahbaz Shiekh
(PAF-KIET)
Vice Chairs
Saboohi NaeemSyed Asim Ali
(JUW)(PAF-KIET)
Secretary
Azam Hashmi
(PAF-KIET)
Joint Secretary
Anum Ansari
(JUW)
Treasurers
Farah HussainFahad Farzand Shah
(JUW)(PAF-KIET)


Our postal addresses are:

SCONEST 2004 Conference Secretariat,Department of Computer Science & IT,Jinnah University for Women 5-C Nazimabad, Karachi - 74600Tel: (92-21) 6620857-59, (92-21) 6619902 Fax: (92-21) 6620614http://www.juw.edu.pk/

SCONEST 2004 Conference Secretariat,Department of Engineering,PAF-KIET Main Campus,PAF Base Korangi Creek, Karachi - 75190Tel: (92-21) 5091114-7 Fax: (92-21) 5091118http://www.pafkiet.edu.pk/

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HONETCON Optical Network Confrence 2004

National University of Sciences and Technology, NUST and University ofNorth Carolina Charlotte, UNCC, USA, have collaboratively organized a4-day workshop on “High Capacity Optical Networks & Enabling Technologies”from Dec 28 – Dec 31, 2004 in Marriot Islamabad.Twelve experts from USA will deliver talks on the state of the arttechnologies. So don’t miss this first of its kind event. Avail thediscounted rates (till Dec 16, 2004) and get registered today.

Note: Profiles of speakers and abstract of invited talks can be viewed at
http://www.honetcon-nsf.uncc.edu

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KARACHI: Royal navy ship arrives

KARACHI, Dec 3: The British Royal Navy Ship, HMS ECHO, is paying an informal visit to Karachi from Dec 2 to 4. The vessel has been conducting military data gathering in the Northern Arabian Gulf since January this year as part of Britain's commitment to improve the safe navigation of both merchant and military vessels operating in an area that has not been surveyed to modern standards for many years, it was stated. Despite having been commissioned for less than two years, the ECHO has spent half her time to-date in the Middle East performing a myriad of planned and short notice survey operations. It was further pointed out that the time spent operating in the area had enabled the ship to demonstrate her versatility and value to the Royal Navy and coalition allies. The ECHO is equipped with modern sensors capable of collecting data from every element of the marine environment. The survey produced utilizing her state-of-the-art integrated survey suite delivers a product far superior than anything previously seen. The vessel has spent a couple of months out of the area participating in a joint five-powers exercise in the Far East. She is expected to return to the UK in late spring of 2005. -APP
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KARACHI: PEC issued notice on students' plea

KARACHI, Dec 3: The Pakistan Engineering Council, the Pakistan Telecommunication Company Limited and federal secretary education were put on notice by a division bench of Sindh High Court comprising Justice Saiyed Saeed Ashhad and Justice Maqbool Baqar. The bench was hearing a constitution petition filed by Muhammad Ali Shehzad, Dad Ali and other graduates of DCET, who moved the court against denial of their registration as engineer. According to the petitioners, they were admitted to Dawood College of Engineering and Technology after nomination by their respective provincial governments against provincial quota. They passed professional examination from Mehran Engineering University and applied for appointment in PTCL which sought their registration with the PEC. When the petitioners moved the PEC for the purpose, their request was rejected on the ground that the PEC had cancelled the accreditation of the DCET. Islam Hussain advocate appearing for the petitioners submitted that if the situation had been in the knowledge of provincial government, no nominations would have been made for the DCET. He maintained that petitioners had no nexus with the controversy between the DECT and the PEC. The bench after hearing the initial arguments issued notice to the respondents for a date to be fixed later by the office of the court. Meanwhile, the same bench issued notice to Sindh Secretary Health and Bahria Institute of Technology while hearing a petition filed by Saima Noor Shaikh, a candidate for admission to Chandka Medical College. Muhammad Nawaz Shaikh advocate appearing for the petitioner submitted that the petitioner appeared in the entry test conducted by the Bahria Institute of Technology. He said that the petitioner had attempted 90 objective questions while left 10 unanswered. When the result was announced, she was astonished to see that she was shown to have attempted 94 questions, four of which were wrong and therefore negative marking made her ineligible for admission. After initial arguments, the court issued notices to respondents for a date to be fixed later by the office of the court.
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Pakistan Science and Engineering Forum (R)
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KARACHI: Cold weather bad for asthmatics

KARACHI, Dec 3: Cold and dry weather may aggravate the condition of patients suffering from various respiratory ailments in general and asthma in particular. Asthmatic persons have been advised to take preventive medicines after consulting their doctors besides taking other precautionary measures to avoid acute attacks. The Head, Department of Chest Diseases, Jinnah Postgraduate Medical Centre, Dr Nadeem Rizvi, said, "Patients often stop medicines with the stabilization of weather and do not resume it with the change in weather. They should take preventive medicines regularly," he added. About 10 per cent of adults and 15-19 per cent of young children usually suffer from asthma. Such patients should avoid intake of dry fruits if allergic to them. They should also avoid excessive exposure to cold that could lead to flu and cough. The pressure of patients is seen increasing nowadays in chest wards and out patient departments in Karachi's hospitals, as many people suffer from various chest infections, including asthma, chronic bronchitis, pneumonia etc, due to the cold weather and burning of garbage in the city especially residential areas," he said. Asthmatic patients should use blankets after keeping them in daylight for two days, as it carries house dust mites that can worsen asthma. - PPI
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Pakistan Science and Engineering Forum (R)
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KARACHI: Contaminated water supply in Lyari

KARACHI, Dec 3: Houses, apartment buildings and commercial concerns on Lyari's Gul Mohammad Lane and Tannery Road's Street No 23 are getting contaminated for the last four days. Residents of the affected locality said sewage might be mixing with drinking water somewhere in the KWSB system as they had been receiving contaminated water. "It is for the second time during the last two months that we are facing such a problem and one will be surprised to know that when we discussed the issue with a KWSB engineer, he attributed the issue to non-availability of electricity at a pumping station in Chakiwara No 1," a resident of the locality said. Apprehending that diseases might break out in the locality owing to consumption of filthy water, residents of the affected locality demanded of the KWSB managing director to instruct the officials concerned to immediately rectify the fault as they cannot afford to buy private tankers for such a long period. SHORTAGE: Complaints of water shortage have also been received from Clifton's Block 2, Orangi Town's Ghausia Baloch Colony and Benazir Colony, parts of Saeedabad and Keamari. Residents of Clifton's Block 2 said although the root cause of water shortage in their locality was illegal connections given from their pipeline to some influential people, the KWSB officials were not taking action against such illegal connections. A UC councillor of Orangi claimed that he and the UC Nazim had apprised the KWSB officials about leaking pipelines, but no measures have been taken to plug them. Meanwhile, water gushing out from leaking pipelines is not only causing water shortage in different localities of UC-9, but was also damaging roads and streets where it often remains stagnant. A KWSB spokesman said on Friday that the KESC would carry out repair work at the Dhabeji Grid Station on Sunday, owing to which electricity would remain suspended at pumping stations in Phase Nos II and IV for seven hours. The spokesman further said that owing to power supply disruption, the city would experience a 50mgd water shortfall. However, supply from Dhabeji Pumping Station Phase No I and III would continue.
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Copyright C. 2002 - 2004
Pakistan Science and Engineering Forum (R)
"Kindling the Flame of Science in Pakistan (TM)"
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Enrichment resumption in 6 months, says Iran

TEHRAN, Dec 3: Iran will resume enriching uranium after a maximum of six months, powerful former president Akbar Hashemi Rafsanjani vowed on Friday, reaffirming that Tehran's freeze on nuclear fuel cycle work is only temporary. "The last word is after this period, which I do not assume will exceed six months ... we must seriously and firmly follow enrichment programmes and use the very important advantages of nuclear technology," he said. "So far, we have reached the point that we accept to suspend parts of our activities for a period that was not necessary at all. Our negotiators have tried to shorten this period and we interpret it to be about two, three months up to six months," the prominent cleric said at Friday prayers. Earlier this week the International Atomic Energy Agency (IAEA) spared Iran the fate of being referred to the UN Security Council for possible sanctions after Tehran agreed in a deal with Britain, France and Germany to suspend its uranium enrichment programme. Rafsanjani also had sharp words for the positions of the IAEA and Western countries during negotiations over the nuclear programme. "We should be dissatisfied with them. They owe to us and have done injustice to us. Iran's activities are (allowed) under legal rights given to all countries to use nuclear technology for non-military purposes." Referring to the US objection towards Iran's access to the fuel cycle, Rafsanjani said: "They are after the free home, oil reserves and this important geographical region, which have been taken from them after the Iran's Islamic revolution." -AFP
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Copyright C. 2002 - 2004
Pakistan Science and Engineering Forum (R)
"Kindling the Flame of Science in Pakistan (TM)"
PakSEF (TM) Daily Science News Update
=====================================================