The World Economic Forum (WEF) recently published a report narrating how digital public infrastructure (DPI) is making waves across Pakistan and reshaping lives as well as futures. It talks about how the DPI has been catalyzing change. From increasing financial inclusion to improving social protection systems, the DPI is there at work in the background. But is the outlook really that bright, and aren’t we ignoring the ugly side of this progress? The digital public infrastructure indeed has brought significant benefits to Pakistan, but what most quarters ignore is that it has also inadvertently paved the way for new forms of crime, particularly identity theft.
The World Economic Forum’s piece begins by narrating the story of a middle-aged woman in the flood-stricken district of Sindh’s Shaheed Benazirabad, highlighting her withdrawal of cash from her bank account for the first time as a success story. It credited the Sindh government’s mobile cash transfer program titled the Benazir Income Support Program (BISP) for this milestone. It also talks about the National Database and Registration Authority (NADRA) playing a critical rule in Pakistan’s digital revolution, as it manages the digital identities for more than 240 million people ensuring seamless identity authentication.
Clubbing the two, it says the BISP significantly boosted the Computerized National Identity Card (CNIC) issuance to adults by 72 percent within a short span of four years. Another milestone achieved was the integration of those digital identities with the banking and telecommunication services, which resulted in the launch of Asaan Mobile Account (AMA) scheme. That scheme alone prompted the registration of more than 10 million mobile accounts within two years, with around 40 percent owned by women. More recently, the RAAST payment system has also transformed financial transactions, making them more secure and efficient.
These steps have not just provided convenience but also empowered people and driven economic growth. However, the report didn’t take into account NADRA facing allegations of data mishandling and corruption. The integrity of a digital system is only as strong as the institutions that uphold it, so there is a need for greater integration and transparency across various government departments/services to enhance the effectiveness of the digital public infrastructure. The World Economic Forum also discussed digital payments and identity verification systems that have streamlined transactions, reduced corruption, and improved transparency, as a result of which we now have a healthier business environment.
The World Economic Forum analyzed the projections and suggested that the country’s GDP could go up to seven percent with the wholesale adoption of digital payments. However, Pakistan still faces several challenges in its quest for comprehensive digital transformation. One of the most major obstacles is the digital divide. Internet is available in almost ‘every’ nook and corner of the country, and mobile internet service continue to ensure that no urban or rural area is without this facility. Despite all that, one of the major things contributing to the divide is digital literacy, because of which people – even in urban areas – are unable to reap the benefits of digitization. To claim that the horizon is promising when so many are left behind is to ignore the very real and pressing disparities that exist in the country.
A lucrative target for cybercriminals
Another major challenge is ensuring data security and privacy. We know that almost all sectors rely on digital systems. The widespread digitalization of personal data makes it a lucrative target for cybercriminals, who exploit vulnerabilities in the system. Identity theft has become a pressing issue over the years, in which individuals’ personal information is stolen and misused for fraudulent activities. To make things worse, the rise of artificial intelligence (AI) has introduced sophisticated methods for committing financial frauds.
One can find thousands of stories on news websites as well as on social media platforms, with victims narrating how criminals used AI-based tools to create convincing phishing scams, deepfake videos and automated attacks, duping individuals into sharing sensitive information or making unauthorized transactions. The authorities have taken several measures in responding to these threats in order to protect the public. From introducing advanced encryption and multi-factor authentication implemented by NADRA, strict regulations by the State Bank of Pakistan (SBP) for financial institutions to enhance security protocols and monitor suspicious activities, to the establishment of a dedicated cybercrime wing by the Federal Investigation Agency (FIA) to investigate and combat digital fraud; all institutions are making every possible effort to protect the people in Pakistan.
Despite these measures, incidents of digital financial frauds continue to be reported every now and then, mainly because the authorities’ counter-fraud efforts are often reactive rather than proactive. We must realize that the cybersecurity infrastructure in Pakistan is still in its nascent stages. Many believe that the current infrastructure is not that well-equipped to handle the sophisticated nature of modern cyber threats. Therefore, there is a need for robust cybersecurity measures and clear regulations not only to protect citizens’ data but also maintain trust in digital systems.
Political instability
Additionally, political stability and sustained commitment are also critical because digital transformation initiatives require long-term planning and investment. But in a country like Pakistan, political landscape is often volatile, with frequent changes in leadership and policy direction. This instability disrupts the continuity needed for effective implementation and scaling of digital projects. We have already seen in the last two decades how progress was hampered because of successive governments prioritizing different agendas.
The idea of Pakistan’s digital transformation presenting promising horizons is appealing, as highlighted by the World Economic Forum report, but it overlooked the major obstacles that undermine this potential. Whether it is the digital divide, institutional inefficiencies, security concerns or economic disruptions; all pose serious challenges that cannot be ignored. Therefore, a more critical and realistic assessment is required to understand the true impact of digital transformation on Pakistan’s future.