Staff Report
ISLAMABAD: Prominent economic commentator and former President of the Islamabad Chamber of Commerce Shahid Rasheed Butt on Monday described Microsoft’s recent closure of its direct operations in Pakistan as a warning sign for the country’s entire digital economy, urging the government to take immediate corrective measures before the damage spreads to other sectors.
The respected business leader said the tech giant’s decision to shut down its office after 25 years reflects mounting frustration with an unstable economic environment, inconsistent regulatory frameworks, and chronic policy discontinuity.
Shahid Rasheed Butt noted that Microsoft’s withdrawal is officially part of a global restructuring effort in which the company has laid off over 9,100 employees and shifted many regions to a partner-led model. However, Microsoft’s decision to retain stronger footprints in countries like Vietnam and Egypt and new investment of three billion dollars in India—while excluding Pakistan from its long-term strategy—highlights growing concerns about Pakistan’s investment climate.
“Pakistan is no longer seen as a strategic destination by global tech leaders,” he warned. “This is not just a business decision. It is a reputational downgrade for our entire digital sector.”
Speaking to the business community, he said the absence of Microsoft’s direct office will impact more than just customer engagement. The loss includes diminished access to knowledge transfer, enterprise-grade solutions, and certified training programs that have historically helped build local IT capacity.
He revealed that Microsoft had previously explored deeper engagement with Pakistan. “Bill Gates personally met Pakistani leadership in 2022 to explore tech collaboration, but politics and institutional disinterest stalled the process. The same year, Microsoft chose to expand in Vietnam,” he added.
The business leader pointed out that Pakistan’s deteriorating economic indicators have contributed to this strategic shift. “Our trade deficit stood at $24.4 billion in FY 2024, foreign exchange reserves barely exceed $11.5 billion, and IT exports have stagnated despite global growth. Who would risk expansion in such an environment?” he asked.
Butt said that Microsoft’s departure could trigger a broader retreat from global players, who may now choose to serve Pakistan remotely via UAE or Singapore. “If immediate reforms are not made, Pakistan’s digital economy may be reduced to a buyer, not a builder,” he warned.
The closure of even a symbolic operation by a company signals that Pakistan is not ready for sustained digital engagement, he said.
Butt called for a stable, long-term tax regime for IT and cloud services, as well as regulatory clarity and immediate re-engagement with global tech leaders.
He further recommended expanding domestic cloud infrastructure, supporting indigenous IT firms, and enabling Microsoft’s local partners to continue service delivery without disruption.
This is a moment to reset the technology narrative, not surrender it. Delay will only invite more exits and more profound isolation from the global digital economy, he concluded.
