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Pakistan IT Firms Facing Difficulties in Middle East

Pakistan-based IT and BPOs companies in Middle East have been facing severe problems to run their businesses and operation in the countries where massesí uprising destabilized the governance and commercial activities, sources in the IT industry said.

There are nearly 10 Pakistani IT companies, mostly based in Dubai having business contracts directly or indirectly in Egypt, Libya, Yemen and Syria, which have been incurring losses owing to disruption in business activities and non-payments of their amounts by public and private companies of these countries.

These companies mostly work as joint-ventures with different firms, while others work independently for public and private sector of Middle Eastern countries. They are specialist of software programming, business applications and Business Processing Outsource (BPO).

Besides, there are IT companies based in Pakistan, providing different services to Middle Eastern countries, are also facing relatively similar issues of business loss and non-payments by service availing companies.

In 2008, the credit crunch and financial recession in developed economies had bankrupt big industries in USA and European states, which hit hard the financial position of Pakistani IT companies and forced them to settle in the Middle Eastern countries as vibrant alternative markets for lucrative business opportunities.

In the last six months, the mass movements in these countries have caused them losses as these IT firms have not received the millions of dollars against their services. They have scrapped their future business contracts temporarily in these countries and are looking for alternate markets in order to resume their businesses.

Industry analysts opine that Pakistani IT firms should move again towards US and EU, which are now sound and lucrative market witnessing recovery in economies. They should penetrate again in the financial, manufacturing and retail sectors of US and EU states to get their share in global emerging business.

Pakistanís IT exports have increased to Middle East countries by 15 percent. United States of America is the largest buyer of Pakistan IT-enabled services followed by UK besides Australia, Canada, and Thailand.

State Bank of Pakistan statistics show that the remitted amount on the account of IT and IT-enabled service exports stood at US $179 million in the three quarter of current fiscal year 2010-11. The IT exports of the country have increased to US$716 million in the same period in accordance with WTO formula.

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