A 24-hour internet shutdown in Pakistan costs the economy Rs1.3 billion, or about 0.57% of the country’s daily GDP. This is a significant loss, especially for a developing country like Pakistan, the study of the Pakistan Institute of Development Economics (PIDE) revealed.
Furthermore, the research sheds light on the crucial role of the internet as a modern necessity. However, Pakistan’s internet infrastructure is shown to lag behind in both quality and coverage, creating vulnerabilities that are exploited during shutdowns.
Several sectors in Pakistan bear the brunt of these internet disruptions, including online cab services, online food delivery services, freelancers, transport companies, and postal services. Online cab services, a cornerstone of modern transportation, experience a crippling 97% reduction in the number of rides during internet shutdowns, resulting in a daily financial setback ranging from Rs29 to 32 million. Similarly, online food delivery services witness a 75% drop in the number of orders, translating into a substantial daily loss of Rs135 million.
The freelance community, a significant contributor to Pakistan’s economy, also faces substantial setbacks. Orders to Pakistan-based freelance workers are denied during these disruptions, leading to a loss of over $1.3 million in revenue, equivalent to Rs390 million. Additionally, the suspension of 3G/4G services for a single day causes a loss of Rs450 million to the telecommunication sector alone.
The study further reveals that internet shutdowns, whether due to protests or arbitrary reasons, have a significant impact on economic activity in the country, estimated to be around 2.0% of the GDP. This highlights the urgency of addressing this issue.
Dr. Nadeem ul Haque, the Vice Chancellor of PIDE, emphasizes that access to high-quality internet not only empowers the youth, particularly in remote areas but also plays a crucial role in bridging the gap between the privileged and the common public. Online tools for education and professional purposes enable rural youth to compete on national and international levels.
To mitigate the economic losses and ensure equitable access to the internet, PIDE advocates for “internet for all.” The government’s role in prioritizing immediate nationwide internet coverage is stressed, along with the introduction of regulatory measures that encourage telecommunication companies to expand internet access across the country. Spectrum auctions should be geared towards ensuring universal internet coverage rather than merely generating revenue.
In conclusion, the internet is a critical tool for facilitating economic transactions and business operations. The alarming economic costs of internet shutdowns in Pakistan highlight the urgent need for improvements in the country’s internet infrastructure. PIDE remains committed to fostering a digital landscape that empowers individuals and contributes positively to Pakistan’s economic growth. The research findings underscore the necessity of addressing these challenges to ensure a prosperous and connected future for all.