A recent study by the Pakistan Institute of Development Economics (PIDE) underscored the profound economic implications of internet shutdowns in Pakistan. The research, aptly titled “The Economic Cost of Internet Closure,” quantified a loss of Rs1.3 billion, or 0.57% of the nation’s daily GDP average, for every 24-hour internet blackout. Beyond just numbers, the study emphasized the modern-day indispensability of the Internet.
While its significance has grown, Pakistan’s internet infrastructure struggles with quality and coverage issues. The repercussions of these service interruptions ripple through various sectors, presenting operational and fiscal challenges. Online transport, food delivery, and freelancing are most heavily impacted. For instance, internet blackouts triggered a staggering 97% drop in online cab rides, costing the industry Rs 29 to 32 million daily.
The online food delivery sector experienced a 75% decrease in orders, translating into a daily loss of Rs 135 million. The freelancing community, a considerable contributor to Pakistan’s economy, also faced severe setbacks, resulting in a revenue loss of over $1.3 million or Rs 390 million.
PIDE’s Recommendations and Insights
Highlighting the broader economic context, PIDE noted that protests, another form of economic disruption, have previously been estimated to cost around 2.0% of the GDP. Therefore, any hindrance to economic activities, whether due to demonstrations or internet shutdowns, culminates in significant financial setbacks for the nation. Additionally, a day’s suspension of 3G/4G services inflicts a PKR 450 million loss on the telecommunication sector alone.
Commenting on the findings, Vice Chancellor PIDE, Dr. Nadeem ul Haque, emphasized the transformative potential of high-quality internet access. He pointed out its role in bridging societal divides, offering the youth a level playing field, especially from remote areas. Leveraging the Internet for education and professional pursuits can position these individuals to compete nationally and globally.
