The digitization of the global economy has transformed data into the 21st century’s most strategic resource, rivaling oil and gas in its significance for productivity, innovation, and geopolitical influence.
Unlike oil, however, data is infinitely replicable, borderless, and gains more value the more it is aggregated. This is why global technology giants such as Alphabet, Amazon, Meta, and ByteDance have built empires by monopolizing flows of behavioral data, refining algorithms at scale, and locking in billions of users worldwide.
Unprecedentedly, artificial intelligence has deepened this dependency; the sophistication of AI models rests on the breadth and depth of training datasets, making data the critical input for future technological hierarchies.
For Pakistan, a country at the cusp of digital transformation but constrained by structural weaknesses, the rise of data as a strategic substrate raises both opportunities and vulnerabilities. The economy of Pakistan remains largely analog, yet fintech, e-commerce, and digital services are expanding rapidly.
With broadband penetration now around 61% and 147-150 million broadband subscriptions as of mid-2025, Pakistan generates enormous streams of data daily from banking transactions and digital consultations to ride-hailing apps and digital classrooms.
Yet most of this data is not harnessed within national frameworks; it flows outward through multinational platforms whose servers are housed abroad. The absence of robust data governance means that Pakistan’s citizens are effectively raw material providers in the global data economy, while the real value extraction happens elsewhere.
Correspondingly, The State Bank of Pakistan reports that retail digital payments reached 2.41 billion transactions in the third quarter of Q3-FY25, a 12% quarterly increase, with a total value of PKR 164 trillion. The instant-payment system Raast alone processed hundreds of millions of transfers in early 2025, reflecting Pakistan’s growing shift toward a cashless economy.
Yet, without clear frameworks for data ownership, sharing, and protection, the digital economy’s expansion is outpacing its security capacity. Cyberattacks, data leaks, and online frauds have become Pakistan’s new frontier of economic risk. Recent events underscore the urgency; in 2025 alone, several major data breaches and online fraud cases have revealed the fragility of Pakistan’s cyber ecosystem.
The SIMs data leak, where mobile location and call records were reportedly sold on the black market for as little as Rs. 500, exposed the commercial vulnerability of citizens’ private information. NADRA insider leak led to arrests for selling sensitive identity data, while the data of 350,000 Hajj applicants was found circulating on the dark web. Earlier reports also indicated that 2.7 million NADRA records were compromised between 2019 and 2023, some ending up as far as Argentina and Romania.
Exponentially, cybercrime and e-frauds are accelerating in parallel. Over the past five years, Pakistan has recorded nearly 2.7 million digital crime complaints, with 1.8 million filed by women, highlighting the gendered dimension of online insecurity. In Multan alone, authorities reported over 1,500 online fraud cases in 2024, including shopping scams, bank account hacks, and fake investment schemes, one of which involved a staggering Rs. 20 billion fraud.
Ubiquitous connectivity adds another layer of risk. Pakistan still has no commercial 5G network, and the long-delayed spectrum auction, which has been postponed to early 2026, means that the country remains the most spectrum-starved in South Asia. Every month of delay widens the gap in AI-enabled logistics, real-time telemedicine, and industrial IoT – all of which depend on high-speed, low-latency networks and secure data architecture.
As states recognize that control over data distribution determines both economic capacity and national security, the governance of information is shifting from a technical concern to a matter of high strategy. Once states accept data as a strategic resource, they often move toward data localization laws mandating that certain categories of data be stored or processed within national borders.
Yet what might appear as a compliance issue can dismantle the global cloud’s operational model, which thrives on distributed workloads across jurisdictions. Localization, without infrastructure and regulatory sophistication, risks isolating economies rather than securing them.
For Pakistan, the challenge is to avoid a false binary of “everything local” versus “anything goes.” A balanced data sovereignty strategy should rest on three pillars. First, build domestic data infrastructure – regional clouds, trusted data centers, and sovereign compute through public-private partnerships and incentives for green data storage.
Second, legislate a modern data protection regime; Pakistan’s draft Personal Data Protection Bill must be finalized and aligned with global standards, ensuring citizen rights such as access, portability, and erasure, while defining clear categories of sensitive, critical, and open data.
Third, invest in people and research ecosystems so that data generated in Pakistan contributes to domestic AI models, particularly in Urdu and regional languages, and drives innovation in healthcare, agriculture, climate, and governance.
Data localization, on its own, is not a silver bullet. Forcing all data to remain within borders without building cloud capacity, cybersecurity systems, and local AI research creates bottlenecks rather than resilience. Duplication of systems can burden businesses and isolate Pakistan from global supply chains.
What Pakistan needs is not isolation but strategic integration – frameworks that protect national security and citizen privacy while enabling cross-border data flows for trade, innovation, and science. The choice is clear. If Pakistan continues to export its digital raw material without mechanisms for value capture, it will remain on the periphery – reliant on others’ algorithms, platforms, and priorities.
But if Pakistan acts now – auctioning spectrum on time, codifying privacy rights, building sovereign compute, and opening secure data corridors – Pakistan can turn its fast-growing digital rails into a refined strategic asset.
Author: Mirza Abdul Aleem Baig – President of Strategic Science Advisory Council (SSAC) – Pakistan. He is an independent observer of global dynamics, with a deep interest in the intricate working of techno-geopolitics, exploring how science & technology, international relations, foreign policy and strategic alliances shape the emerging world order.
(The views expressed in this article belong only to the author and do not necessarily reflect the views of World Geostrategic Insights).
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