Technological weaponry: Pakistan needs local solutions – Perspectives
Amidst the Fourth Industrial Revolution, the world became digitally interconnected and people’s lives became easier thanks to the digital revolution that was witnessed at the turn of the century. Global change and the smooth adoption of digital solutions have triggered a transformation in all segments of the economy as the financial sector, entertainment industry, retail and other segments all depend on it.
Although it has given people access to a wider range of options for almost everything, the digital revolution also poses a threat because it can also be used as a weapon. Just as the Organization of the Petroleum Exporting Countries (OPEC) weaponized oil during the Yom Kippur War and suspended its supply to Western countries, global tech giants are weaponizing technology to pressure Russia to to call off its war in Ukraine.
Days after Russia invaded Ukraine, which the Kremlin said was a military operation in its neighboring country, several tech giants announced the suspension of services in Russia in order to pressure Moscow to it withdraws its forces in Ukraine. It’s a great example of how technology can be used as a tactic in the modern world.
Among the top tech companies that have pulled out of Russia are PayPal, Visa, Mastercard, Swift, Uber, Bolt, PayPal, Airbnb and Apple.
Russia is the 10th largest country in the world and its relatively large population (145 million) relies heavily on foreign technological solutions for its daily needs.
Following the suspension of international technology platforms, payments, logistics, travel and accommodation for an average Russian have become much more different. An ordinary Russian citizen residing in the country cannot even withdraw money from an ATM because the two main providers of payment solutions, Visa and Mastercard, no longer do business in the country.
Immediately after the two companies suspended their services, Russian citizens struggled to find money for their daily needs. The suspension of both platforms meant that all bank cards and payments through them were impossible. Even Russians in foreign countries were unable to transact with Visa and Mastercard products issued by Russian banks.
Likewise, a Russian citizen now has to rely on local taxi services as Uber and Bolt have also shut down. This gap is now filled by the Chinese Didi, which continues to operate in the country, as well as the Russian public transport platform Yandex Taxi.
In addition, major banks in Russia have been prevented from using the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system, which is a messaging system that allows banks to communicate payment instructions with each other. Speaking of digital communication, WhatsApp and Telegram are the only two apps that work in Russia. The others withdrew.
Although these measures have not deterred Vladimir Putin from expanding his “military operation”, they have hit ordinary Russians hard. These measures triggered an immediate liquidity crunch in the economy and people struggled to find money to pay bills and buy essentials.
At the same time, freelancers have not been able to withdraw their income or get new work because all transactions with Russian bank accounts from abroad have been banned. They have been deprived of access to their money, which also threatens their livelihoods.
At the same time, YouTube suspended payments to Russian content creators and ended ads across the country. This has put many freelance jobs at risk.
This episode is a wake-up call for import-dependent economies like Pakistan and can serve as a case study for the nation.
With a population of over 220 million, Pakistan is so heavily dependent on imports that the government recently banned domestic shipments of non-essential goods to support foreign exchange reserves and contain the current account deficit.
Its reliance on foreign technology is even higher as many businesses operate on WhatsApp, Instagram and Facebook while payments are received via Mastercard and Visa respectively. Moreover, the ride sharing industry is also dominated by foreign companies, as well as PayPal, which has been a long-standing demand of young people and expatriates in Pakistan.
For payments, Pakistan mainly depends on Visa, Mastercard and 1LINK. Similarly, the ridesharing ecosystem is dominated by Careem and Uber. The main platforms for content creators are YouTube, Facebook, TikTok and Instagram. It’s not hard to deduce that two of these four companies belong to the same big tech that pressured Russia to withdraw its forces from Ukraine.
Our food delivery industry is dominated by Foodpanda and Careem, two international companies.
Let us now turn to neighboring India. Indian tech experts and developers created a platform to compete with Paypal and imposed such fierce competition on it that it had to stop domestic payments in the country in order to limit losses. On the payments front, India has Rupay to oppose services like Mastercard and Visa.
Similarly, New Delhi is countering the dominance of international food delivery platforms through its local Zomato and Swiggy, while the ride-sharing space has a local alternative, Ola.
Similarly, China has WeChat (social media), Didi (Ride-hailing), Alibaba (e-commerce), JD.com (e-commerce), Unionpay (payment), baidu (internet), Huawei (mobile phones) , tencent (fintech) and Meituan Waimai (food delivery) to counter foreign dominance in the tech space.
Therefore, in an event where the weaponization of technology takes place in India or China, they are likely to emerge stronger than Pakistan which has no local alternatives of advanced technology platforms.
Pakistan should struggle the day technology is weaponized against it.
In fact, Pakistani tech entrepreneurs are focusing on e-commerce and q-commerce. Now that the space seems to have taken off, the competition is massive. It is essential that Pakistan focuses on creating local alternatives to international technology services so that they cannot be weaponized against it.
Dependence on foreign tech companies can also be seen as a sign of strategic weakness and there is a need to work quickly on a plan to promote local champions as de facto alternatives.
The weaponization of technology is a massive threat to sovereignty and leaders should focus on fighting it.
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