Pakistan would be hard-pressed to make anyone’s list of best places to do business. But John Armbruster is betting that Pakistan’s attributes—including a large, low-cost pool of English speakers—point to a brighter future. He’s aiming to help the country carve out a piece of the lucrative outsourcing business dominated by its neighbor and longtime rival, India. So far, the bet by Armbruster’s company, TRG Pakistan Ltd, is paying off. It recently branched beyond its main office in Lahore and opened a second office in Karachi. By year-end, TRG hopes to expand to 500 employees from 300 now. ‘‘We blow India away as far as quality is concerned,’’ said Armbruster, the company’s director of operations. ‘‘The problem India has gotten into is that it has grown too fast.’’ Throughout the developing world, call centers are old news. But Pakistan is just getting into the game after years of economic stagnation. The Pakistani government, aided by the Bush administration, has launched an aggressive effort to get its economic house in order by reducing debts and privatising state-owned utilities. Interest rates have fallen, along with electrical and telephone rates. The economy grew an impressive 6.4 per cent last year. Pakistan now hopes to capitalise on some of the qualities that propelled its much larger neighbor to the top of the outsourcing class. Like India, Pakistan has a large number of educated English speakers willing to work for a fraction of US wages. Operating costs are low, in line with other parts of South Asia. To boost its appeal as a high-tech hub, the Pakistani government has provided a 15-year tax exemption on software exports, eliminated duties on technology imports and streamlined the investment process. Last year, investors sank $1.5 billion into the IT sector, boosting software exports to $50 million, said Tariq Ikram, chairman of Pakistan’s Export Promotion Bureau. ‘‘Pakistan,’’ he boasted, ‘‘has some of the cheapest IT costs in the region.’’ For all that, though, muscling into the outsourcing business won’t be easy for Pakistan. Rival nations are also eager to grab a piece of the multibillion-dollar sector. ‘‘Because of the digitisation of data, low-cost telephone services can be provided virtually anywhere. You can shop around, going from Chile to Finland just on your computer screen,’’ says Paul Laudicina, an outsourcing expert at consulting company AT Kearney. Pakistan still lags far behind many other countries on global rankings of three significant criteria: math and science skills, business environment and costs. Indeed, Pakistan’s outsourcing efforts were nearly derailed by the 2001 terrorist attacks. When planes hit the World Trade Center, Armbruster was in Pakistan to set up a back-office operation for Align Technology Inc, a producer of plastic braces based in California’s Silicon Valley. Within days, Align’s share price plummeted because investors were worried that the company’s Pakistan branch would get caught up in the escalating battle against terrorism. When Align announced it was closing its Lahore office, Armbruster and other company executives decided to take over the operation. It eventually became TRG. He was convinced he could make a go of it. Rather than persuade US companies to shift their work to Pakistan, TRG decided to invest in or buy small North American call centers and help them outsource their business overseas. The company began by buying a minority interest in Alert Communications, a South Pasadena company that had been in the telephone-answering business for 50 years. Alert President Gary Blasiar said the payoff is the skill level he gets in Pakistan, where TRG hires college graduates to handle the telephones for about $6,000 a year. At least 40 per cent of the firm’s employees have lived abroad, making it easier for them to pick up accents and vernacular speech. —LAT-WP
