Pakistan is at risk of being left behind in the rapidly expanding global digital trade market valued at over $500 billion, the Asian Development Bank (ADB) warned in its latest report released on September 19. The findings underscore the country’s struggle to keep pace with regional peers due to weak infrastructure, fragmented regulations, and delays in policy reforms.
The study, titled “Digitally Connected Central Asia Regional Economic Cooperation (CAREC): Digital Trade, Emerging Regulatory Challenges, and Solutions,” outlined how Pakistan’s progress in digital trade lags behind despite its strategic location at the crossroads of South and Central Asia. While ASEAN economies have rapidly expanded digital commerce by adopting unified frameworks and investing in modern infrastructure, Pakistan’s regulatory and institutional hurdles continue to hold back its growth.
ADB estimated that Pakistan’s digitally delivered trade in 2024 amounted to only $7.93 billion. In stark contrast, Malaysia recorded $39.04 billion, the Philippines $38.57 billion, and Thailand $50.57 billion in the same period. The gap highlights Pakistan’s inability to leverage its large consumer base and geographical advantages. At the regional level, intra-CAREC trade excluding China makes up just 7 percent of total trade, far below ASEAN’s 24 percent, reflecting limited integration and deep structural weaknesses across the bloc.
The report highlighted that Pakistan, along with Georgia and Kazakhstan, has not ratified the UNESCAP Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific. This pact is seen as a key instrument for accelerating digital trade by harmonizing regulations and adopting paperless processes across borders.
ADB pointed out several barriers that continue to hinder Pakistan’s digital trade potential. These include underdeveloped infrastructure, patchy internet connectivity, limited data storage facilities, and the absence of payment interoperability systems. Regulatory fragmentation, weak enforcement of consumer protection, and the lack of comprehensive data privacy and cybercrime laws also put Pakistan behind economies that have already aligned with global best practices.
The report emphasized that digital transformation is no longer a matter of choice but of survival in the evolving global economy. ASEAN’s success, built on regulatory harmonization, large-scale investment in smart infrastructure, and robust e-commerce laws, provides a model that Pakistan has yet to emulate. Without urgent reforms, the country risks being excluded from global digital supply chains that are driving trade and investment flows.
To address these challenges, ADB recommended that Pakistan establish a long-term digital trade policy framework. This should be supported by investments in smart ports, modern trade corridors, and interoperable payment systems. The report also called for the development of a regional digital single window to streamline cross-border transactions, alongside capacity-building programs to strengthen digital skills, particularly for women and youth.
With digital trade now a defining factor for global competitiveness, Pakistan’s ability to implement these reforms will determine whether it can secure its place in the global digital economy or risk falling further behind.
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