Muhammad Umar Waqqas
KARACHI: As geopolitical tensions escalate across multiple fronts, countries around the world are once again confronting how quickly war reshapes economic realities. Conflicts no longer remain confined to battlefields; they disrupt energy routes, strain national budgets, destabilize currencies, and test the resilience of global supply chains. From rising oil prices to rerouted shipping lanes and tightening credit markets, the ripple effects are felt far beyond the immediate zones of conflict. Countries like Pakistan are situated at the crossroads of several regional flashpoints where the consequences are immediate and tangible, turning distant geopolitical rivalries into everyday economic pressures for businesses and citizens alike.
“As I write this, long queues have formed at petrol stations across Pakistan. The government has announced a Rs55 per litre immediate hike in fuel prices. Crude oil reserves stand at roughly ten days. Ships are being rerouted through Yanbu because the Strait of Hormuz is effectively shut. And this is just one of three active crises. We are fighting an open war with Afghanistan on our northwest border, navigating the aftermath of last year’s military confrontation with India that left the Indus Water Treaty suspended, and watching the US-Iran conflict unfold barely a hundred kilometres from Balochistan, with real spillover risk across our 900-kilometre Iranian border. This is not a theoretical discussion. This is Pakistan’s reality, today.” Shahzad Arif tells The Financial Daily.
Shahzad Arif is the CEO of AKSiQ and a veteran of Pakistan’s technology sector with over two decades of experience in IT and digital innovation. He has led the creation of high-performance tech teams, delivered enterprise-scale solutions, and actively championed stronger industry-academia collaboration to boost Pakistan’s global IT export potential. A frequent voice in policy and industry forums, he contributes to national dialogue on technology growth, digital transformation, and workforce development.
Shahzad Arif says “The economic pressure is immediate. Brent crude has crossed $90 and forecasts place it above $100 if hostilities stretch past April. Every ten-dollar rise adds roughly $3 billion to our annual import bill. The rupee is under pressure. Credit is tightening. For businesses that depend on physical supply chains, whether through Torkham, Chaman, or the Gulf shipping lanes, all three routes are now compromised at the same time.”
He added “Yet even now, one part of our economy continues to grow. Pakistan’s IT exports hit a record $437 million in December 2025, a 26 per cent jump year on year. In seven months of FY2026, cumulative ICT exports crossed $2.61 billion, up nearly 20 per cent. The sector now makes up 10.8 per cent of total exports. Uraan Pakistan targets $10 billion by FY2029. These numbers matter because they represent the one export engine we have that does not depend on open borders, stable shipping lanes, or friendly neighbours. Our software moves over fibre-optic cables. It does not queue at Torkham or wait for Hormuz to reopen. Since the conflict began, global enterprises running a Gulf-plus-one strategy have accelerated their search for alternatives, and Pakistan is on shortlists it was never on before. But we need to be honest about the gaps. When Amazon’s Bahrain cloud zone went offline after a drone strike, Pakistani firms on Gulf infrastructure felt it within minutes. Our undersea cable redundancy is inadequate. Power is under fresh strain as fuel costs climb. A weakening rupee helps dollar margins briefly, but prolonged instability kills the client confidence needed to convert pilots into multi-year contracts. We cannot build a $10 billion sector on freelance gigs alone. The move from Upwork to SAP-scale engagements requires predictability. On our side, IT firms should be accelerating multi-cloud strategies outside the Gulf, locking in long-term contracts while our cost advantage holds, and pursuing SOC2 and ISO certifications that open doors to Western buyers.”
As tensions in the Middle East threaten global energy routes and trade flows, governments are moving quickly to cushion their economies from immediate shocks. Many countries are releasing strategic oil reserves, securing alternative shipping routes, and renegotiating supply contracts to maintain fuel availability. At the same time, policymakers are adjusting fuel prices or offering temporary subsidies to manage inflation while protecting public finances. Central banks are closely monitoring currency pressures and inflation risks, with some preparing tighter monetary policies to stabilize markets. In parallel, governments are promoting short-term energy conservation measures and strengthening supply-chain resilience to ensure that essential imports and exports continue despite regional disruptions.
Shahzad Arif says “On the policy side, there is reason for cautious optimism. The SIFC has made welcome strides and the Uraan Pakistan framework shows the right ambition. What this moment calls for is acceleration, not reinvention. It would help if IT exports were treated as a national security priority, with the kind of coordination that comes from the Prime Minister’s direct attention. The $750 million in signed MOUs need to convert into operating FDI with quarterly milestones. Digital infrastructure, a second submarine cable, cloud zones on Pakistani soil, ring-fenced power for IT parks, deserves the urgency. The talent pipeline needs attention too: a $10 billion target requires roughly 500,000 additional skilled workers by 2029, and that is also a jobs story worth telling. Our universities have the talent but need curricula aligned with an industry moving fast toward AI and cloud. Vietnam added $2 billion in IT exports in three years through this kind of focused investment. India’s STPI scheme built the foundation for a $150 billion industry. We do not need to invent a model. We need to execute one.”
Industry experts say Pakistan’s technology sector has emerged as one of the few export segments less vulnerable to regional conflict and supply-chain disruptions. Unlike traditional exports that rely on physical trade routes and shipping lanes, IT services are delivered digitally, allowing companies to continue operations even during geopolitical tensions. However, businesses have long raised concerns about delays in accessing or retaining foreign-currency earnings and about tax uncertainties affecting exporters. Analysts note that smoother foreign-exchange handling by the central bank and a stable tax framework from revenue authorities could help the sector sustain its growth momentum and position it as a resilient source of export revenue for Pakistan’s economy.
Shahzad Arif stresses the immediate reforms, he says “The State Bank can help by ensuring IT dollar earnings move without repatriation bottlenecks. The FBR can play a constructive role by holding the line on withholding taxes for a sector delivering real results. Pakistan faces security challenges on every border, and nobody minimizes that. But the same turbulence threatening our traditional economy is creating unprecedented demand for what our technology sector offers. With coordinated effort from government, industry, and our universities, this can be the moment we build an export engine that no border closure, no oil shock, and no regional conflict can shut down.”
