Pakistan’s Technology Business Development Office near Silicon Valley is being shut down after less than six months of operation, the country’s IT envoy there confirmed Thursday.

The office was set up in July in Los Altos, California, to help U.S. companies seeking IT services or products from Pakistan and for Pakistani companies that wanted to drum up business in the United States, said Ambassador Toheed Ahmad, the outgoing consul general of Pakistan for IT development. It was to have been the first of several such offices around the world.

Ahmad is now winding down the operation and will shut it down by the end of this month. He said Pakistan’s central government in Islamabad ordered the closure, but the decision probably was driven by economic woes and declining tax revenue in that country. Since the Sept. 11 terrorist attacks in the United States, Pakistan has lost US$2 billion to $3 billion in exports overall, he estimated. Suspended airline service, higher shipping insurance premiums and wariness about upheaval from the U.S.-led war on neighbouring Afghanistan and protests against it are largely to blame, Ahmad said.

“The perception was that it’s in a war zone and therefore perhaps unpredictable in being able to carry out commitments,” Ahmad said. “Some people … were put off by things they saw on the TV screen,” such as the protests.

However, on the ground in Pakistan, businesses have been able to operate as usual, apart from the travel constraints, which are beginning to be lifted, he said.

Pakistan’s IT industry, which brings in roughly $200 million per year in revenue, currently is focused on software development, Ahmad said. The country is trying to build up its IT service industries, such as data entry, call centres and system integration.

Ahmad, a career diplomat, will return to Islamabad for a new assignment.

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