Abuse/non-use of Pakistan universal service funds

Posted on January 13, 2015  /  2 Comments

I did not know how bad things were in Pakistan until I read this essay by my friend Parvez Iftikhar, the greatest universal service fund evangelist there is.

Coming to home, the level of utilization of USF funds in Pakistan, at this time, is actually worse. According to a careful estimate, since 2006 an equivalent of US$ One Billion has been collected (including the interest earned on the collections) – excluding those millions that were collected by PTA in the initial years and deposited directly with the government. Out of this One Billion, US$ 160 Million has been disbursed to the telcos. Another US$ 110 Million is committed in signed contracts of on-going projects, and is lying with the Government of Pakistan. The balance, equivalent to US$ 730 Million, is also lying somewhere – unutilized, uncommitted.

This is not a small amount. It is equal to 0.3% of Pakistan’s 2013 GDP (which was US$ 232.3 Bln, as per World Bank data)! Since the USF collections are now being diverted to the Government (Federal Consolidated Fund), instead of helping the unserved areas, these are merely serving to fill the fiscal gap. Does that raise questions if the USF levy in Pakistan (a very reasonable 1.5%) should also be brought down further? Perhaps even discontinued for the time being?

– See more at: http://www.piftikhar.com/2015/01/utilization-of-universal-service-funds/#sthash.HZ9hENMe.dpuf

This shows incredible honesty because he is making the case for people like me who believe that there are structural reasons for the abuse or non-use of universal service funds and that if they are used at all, they should be sunsetted and carefully controlled.

But then comes the disappointment:

So we have to somehow accelerate USF development projects and deploy ICT connectivity and services (real ICT services) in rural areas at a much faster pace – as was/is demonstrated by USFs in some of the developing countries. There are several international organisations trying to work on this – among them ITU, World Bank, USAID/GBI, CTO, etc. I work with all of them at one place or the other, and almost every time the question pops up if there is a better way of achieving the objectives. So far an answer could not be found. Till such time as we try to find that illusive answer, I think it is obligatory upon all of us to do our best to improve utilization of these funds as this still gives us the best chance to bridge that ever increasing digital divide – at least to an extent, if not fully.

Instead of reaching the logical conclusion from the evidence, the evangelist wants more of the same, just better. This reminds me of Einstein’s definition of insanity: “doing the same thing over and over again and expecting different results.”


  1. Dear Parvez, Please demonstrate your remedy in Pakistan. Then I will publicly renounce my opposition to universal service taxes.