By Tariq Malik and Prerna Saxena

Digital public infrastructure initiatives in Pakistan are enabling financial inclusion and empowering citizens, especially in underserved areas.

Pakistan’s National Database and Registration Authority is responsible for a digital identity system, which facilitates transactions for citizens.

Maintaining the safe and responsible deployment of digital public infrastructure requires political commitment, robust legal frameworks and ethical principles.

History teaches us that even the simplest technological innovations can have the most profound consequences for society. From the railways to the internet, technologies have reshaped our lives. Today, digital public infrastructure represents such a determining investment. In the case of Pakistan, the country has demonstrated its commitment towards digital transformation, marked by interventions in 2022.

On a scorching day, with temperatures soaring to 42ºC, Manzoora, a mother from the flood-stricken district of Shaheed Benazirabad, rural Sindh, Pakistan, made a significant leap: she withdrew cash from her own bank account for the first time. The milestone was made possible through a mobile cash transfer programme initiated by the Sindh government, which partnered with digital service providers to empower citizens like Manzoora. This is just one example of how digital public infrastructure is changing the lives of millions of Pakistanis.

Pakistan’s digital transformation

At the heart of Pakistan’s digital transformation is the National Database and Registration Authority (Nadra), established to overhaul the country’s identity systems. This was a foundational change, positioning Pakistan among a select group of nations equipped to manage comprehensive digital identities for more than 240 million citizens.

The Nadra-issued Computerised National Identity Card (CNIC) has become a standard feature in every adult Pakistani’s life, facilitating a range of routine tasks such as opening bank accounts, purchasing airline tickets, acquiring driver’s licences and qualifying for social protection, thereby ensuring seamless identity authentication for every citizen.

Within four years of launching the Benazir Income Support Programme – a social protection initiative to alleviate poverty – CNIC issuance to adults increased by 72%. Despite its head-start to similar digital identity (ID) initiatives in other countries, optimal use of Nadra’s digital database remains limited to only a few ministries, department, agencies and regulated businesses.

The crucial role of political support and legislation

The success of digital public infrastructure hinges on enduring political commitment and robust legal frameworks that transcend electoral cycles. While the concept of citizen registration was embedded in Pakistan’s 1973 constitution, the integration of various national databases through the Nadra Ordinance 2000 and subsequent legislative enhancements in 2012 have been critical.

Pakistan’s digital initiatives

Pakistan’s journey toward effective digital public infrastructure is characterised by the rollout of significant digital initiatives, such as, Contactless Biometric Verification App, Nishan Pakistan and Pakistan Digital Census. While these prioritise long-term benefits, it is essential to achieve short-term wins to maintain engagement and support, preventing loss of momentum due to shifts in leadership or political will.

For instance, by integrating digital IDs with banking and telco services, the Asaan Mobile Account scheme launched in December 2021, within the span of two years secured more than 10 million mobile accounts, with around 40% being women-owned.

Likewise, Nadra’s role in the Raast payment system – a State Bank of Pakistan initiative – highlights how digital public infrastructure can transform financial transactions. Raast, an interoperable instant payment system, uses Nadra’s identity authentication processes to offer secure, swift KYC-compliant financial transactions across various platforms, thereby democratising access to digital payments for millions.

Additionally, Pakistan’s digital public infrastructure framework has also proven instrumental in managing crises, such as the Covid-19 pandemic. Within days of initiating the lockdown, Pakistan’s federal authorities announced unconditional cash transfers. The government provided approximately $75 (R1 355) per household, sufficient to purchase three months’ of food staples to 12 million vulnerable households.

The targeted response, facilitated by the robust digital ID infrastructure provided by Nafra, resonates strongly with the UN Better Than Cash Alliance’s 10-point action plan. The plan urges digitising social benefits and providing women with digital IDs, cellphones and internet access to advance financial equality.

The same approach is endorsed by a recent report on the Benazir Income Support Programme, which highlights significant advancements in Pakistan’s digital delivery system.

The significant opportunities need to be informed and designed with guardrails to ensure that the deployment of digital public infrastructure is safe, responsible, and leveraged for inclusive societies. The Universal Safeguards for the digital public infrastructure initiative and the UN Principles for Responsible Digital Payments aim to create a practical framework for countries implementing such initiatives. The initiative identifies potential risks in global digital public infrastructure deployments, providing valuable insights to inform the design and implementation of future safeguards.

For instance, in Pakistan, Nadra’s data sharing follows strict parliamentary processes. In national security cases, the crisis management cell within the Ministry of the Interior responsible for evaluation and requests of specific data fields. The standard operating procedures ensure case-by-case data sharing, a clear paper trail and accountability to Nadra’s board.

The future of Pakistan’s digital economy

The potential of digital public infrastructure to transform Pakistan’s economy and society is immense. With projections suggesting that wholesale adoption of digital payments could boost gross domestic product by up to 7%.

Pakistan is set to launch several ambitious digital public infrastructure initiatives, including expanding the Rast payment system, implementing a nationwide digital health records system and launching a blockchain-based land registry. The projects promise to drive efficiency and transparency across multiple sectors, positioning Pakistan as a pioneer in the global digital landscape.

Tariq Malik is a technical adviser in digital public infrastructure, digital ID, World Bank, and Prerna Saxena is the head of Asia Pacific, UN-based Better Than Cash Alliance.Contributing author: Raza Matin, Pakistan Lead, UN-based Better Than Cash Alliance.

*This article was published on the World Economic Forum website (https://www.weforum.org/agenda/2024/07/digital-public-infrastructure-is-transforming-lives-in-pakistan/).

* The views expressed in this article are those of the authors alone and not the World Economic Forum.

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