Piracy in Pakistan
Published 13th August, 2009, Dawn, Scitech.

Living With The Pirate’s Cutlass

Over the last 25 years, Pakistan has risen to become a global hub of audio, video and software piracy. International piracy watchdogs currently rank the country in the world’s top 10 pirate nations. Pakistan causes USD 2.7 BN loss to the international firms esp. since the majority of CDs / DVDs worldwide are exported via Pakistan.

According to BSA, currently the piracy Rate in Pakistan in software alone hovers around 86%, increasing 2% from previous year with the resulting losses of USD 159 Million to the Pakistani economy. There are a few caveats in this report, since it automatically assumes that everyone who buys a Rs. 25 CD will buy the original software at 100 times the pirated price. This also doesn’t account for the fact that piracy generates around USD 27 million for the domestic markets and creates new jobs. However the report’s findings cannot be taken lightly. This is because piracy in Pakistan is becoming instrumental in destroying local industries. If piracy before was a MNC problem, now it’s turning into a local problem.

Originally uploaded by Will Lion

Aarrrrrrrrghhhhhhhh!!!!

In an environment which is highly prone to counterfeit or pirated software & content, the local companies esp. software based are unable to compete on a level playing field. This lack of opportunity prevents them from competing locally and also in the international arena, attracting much needed investments in our country. Content firms also refuse to invest money in productions, citing fear of piracy. Piracy also results in huge losses not only to legitimate businesses but also to the national exchequer in terms of lost taxes and duties.

The IT Competitiveness Study by Economist Intelligence Unit in 2008 (sponsored by BSA), ‘How Technology Sectors Grow; Benchmarking IT Industry Competitiveness 2008’, Pakistan ranked 62nd in competitiveness, down 2 points from 60 and lower than Bangladesh, Srilanka and India. Amongst other factors, the study looked at the overall business environment, Research & Development, Support for IT, Legal Environment & Infrastructure. Pakistan scored lowest on critical growth areas such as IT Infrastructure, the RND Environment and Legal Environment. Given that the new world is increasingly about knowledge workers, we are slowly being left behind in the race.

Come Aboard Mate’y



Originally uploaded by ONT Design

The seeds for pirate (cheap) content were sown during the mid-1970s. This was the time when Pakistani expat workers in the Gulf states were sending back VCRs by the thousands. Within a few years, VCRs had made their way into every imaginable place – homes, eateries and even intra-city buses. For years Pakistanis had not been able to see Indian movies at the cinema because of the hostile relations between the two countries in the aftermath of their 1965 war. Now they suddenly found the latest Indian movies available at corner shops for overnight rentals.

So why didn’t the authorities clamp down on the pirated Indian video tapes? Zia’s cultural policy and the resulting political connotations have been cited for this. General Zia ul Haq’s regime was an extremely oppressive one and one of its key policy objectives was to keep people indoors. In Gen Zia’s orthodox outlook, any form of entertainment in a public place – especially where genders could mix – was against Islam. Thus the VCR came as an ideal magnet that would hold people at home in the evenings. Also, since most of the content was Indian, it was felt this would be damaging to their industry. Over the years, this mindset and the resultant addiction to cheap content evolved into other media such as software and it is this mindset that copyright enforcers will have to fight if they want to stop Pakistan in its steady climb up the world’s piracy charts.

Make Em Walk The Plank

To date, efforts have been made to combat this growing phenomenon. There has been progress such as in the government sector which has taken some steps over the years to legalize government use of software and software procurement rules are in place to ensure that legitimate software prices are quoted with tender offers to supply hardware. It is also heartening that the Punjab govt. has taken up initiatives of setting up school labs at the primary school level. Yet more can be done.

For starters, despite the near eradication of factory produced discs in Pakistan after 2005’s enforcement activities, now the chief optical disc piracy problem in Pakistan involves the burning of pirate content onto recordable CD-Rs and DVD-Rs, which have taken over in equal amounts and harder to stop.

Copyright cases are also marred by procedural hurdles such as excessive documentary requirements and delays. The minimal number of criminal prosecutions and the low level of fines when cases do proceed to conclusion results in non-deterrence in the Pakistani market. It is telling that cases against optical disc manufacturing pirates who were arrested years ago remain pending. The plant owners filed a Constitutional Petition (CP) in the Pakistani High Court challenging the legislation under which they were arrested back in 2006. Whilst the maximum fine a pirate has received from a prosecution for piracy was PKR 15,000 (US$189) in 2004.

Whilst legal and enforcement issues, do remain, international firms can do a lot more by improving their own workings in this matter.

It is a known fact that acquiring licensed software in Pakistan is a headache. There are no official channels (esp. in retail) through which the people in Pakistan can acquire genuine software and there is no proper support by major international firms (beyond liaison firms) to help those users who do acquire them (activating a licensed key requires calling an international number). Increasingly, though many shops in Karachi are selling original software, the retailers buy them from Dubai and Singapore in bulk and resell them here. This is illegal under the EULA. So going legit is almost impossible.

Resource problems also occur. Checking piracy by raiding DVD shops would take the battle to every nook and cranny of the country. No government can be expected to provide the resources or have the will for such a crackdown nor are firms providing impetus for this undertaking.

Another interesting aspect is the rise of second hand PCs in Pakistan. The majority of the people buy second-hand machines which have been disposed of in the west. Most of these machines come with the OS Pre-installed (usually Windows), along with a sticker of the original product key. They sometimes even have the cubicle number and the company they were in. So when the machine running a pirated version of an operating system already has a license, the piracy issue is no longer so clear cut. Microsoft Pakistan claims that such licenses are ‘Expired’ and have offered original licenses for these ‘secondary PCs’ for around Rs. 1200.

Cost to consumer however continues to dominate the reason why piracy exists. Not that the OEMs haven’t tried giving alternatives. Trade discounts exist on virtually every licensed software in Pakistan. Some are actually huge (Rs. 990 for a popular legit antivirus software retailing for Rs. 4200 on the official site). On the consumer side, a Starter Edition of Windows comes for Rs. 2,800, whilst a Students and Home Users version of Office (three installations) costs about Rs. 8000. This is still high compared to like markets like Thailand where both Microsoft Windows and Office together are available for40 USD. However it is a step in the right direction.

Microsoft has also started its MSDN:AA program in Pakistan where all schools and universities registered with Microsoft Developer’s Network Academic Alliance can get all version of Windows and other Microsoft software for free. Any school or university can register with them and the cost to the academy is USD 500 yearly. The approved universities come under STEM (Science, Technology, Engineering, Medical) classification and should be HSE recognized.

Bizspark is also another Microsoft’s initiative that provides technology startups with free software through MSDN subscriptions. This program is for companies that can’t afford paid software and want to use Microsoft technologies legally.

Subscription based licenses (also called Multi-user licensing) which can provide shared access and decrease the price to the consumer by a huge gap also exist however have yet to be explored by commercial entities and via education of the consumer.

IDC, an international research company, reported that the economic benefits of lowering piracy in Pakistan by 10 points will deliver 11700 new jobs, 23 million USD in tax revenue, and 160 Million USD in economic growth through software alone.

Piracy is a growing threat to our nation and it is high time that people need to be educated that it is a crime and that it threatening us on multiple levels. Unless the mindset changes, cheap is going to prove very expensive in the long run.

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