Peshawar:
A mere 24-hour shutdown of internet services results in a direct loss of Rs 1.3 billion, a staggering figure which is approximately 0.57% of the country’s average daily GDP.
A recent eye-opening study conducted by the Pakistan Institute of Development Economics (PIDE) – “The Economic Cost of Internet Shutdowns” – highlighted the dire consequences of Internet shutdowns on the Pakistani economy.
According to PIDE Vice-Chancellor Dr. Nadeem Ul Haq and PIDE Researcher Mohammad Shaf Najeeb, Internet has become a basic necessity in modern times. However, Pakistan’s internet infrastructure lags behind in terms of both quality and coverage.
The recent internet shutdown in various parts of Pakistan has deeply impacted many sectors, causing substantial financial losses and operational challenges. Online cab services, online food delivery services, freelancers, transport companies and postal services have all been severely affected due to the prolonged disruption of internet services.
The PIDE infographic shows that online cab services, which are the cornerstone of modern transportation, saw a massive 97% drop in ridership on days when the internet was shut down. This significant slowdown is equivalent to a loss of Rs 29 to 32 million per day for the industry.
Similarly, online food delivery services faced a 75% drop in the number of orders, leading to a daily loss of Rs 135 million.
Meanwhile, the freelance community, which contributes significantly to Pakistan’s economy, has also suffered the brunt of the internet disruption.
The refusal to place orders to Pakistan-based freelance workers resulted in a loss of revenue of over $1.3 million, equivalent to Rs 390 million, affecting the livelihood of many people and the national economy as a whole.
Moreover, suspension of 3G/4G services for a day causes a loss of Rs 450 million to the telecom sector alone.
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Furthermore, PIDE had previously estimated that the economic cost of the protests would be approximately 2.0% of GDP. Shutdown of economic activities through protests or due to shutdown of internet services causes significant loss to economic activities in the country.
Dr Nadeem Ul Haq said in a statement that access to high quality internet not only enhances opportunities for youth, especially in remote areas, but also plays a vital role in bridging the divide between the privileged and the masses . The use of online tools for education and business purposes can empower youth from rural areas to compete at the national and international levels.
PIDE has consistently advocated for “Internet for all” and believes the government should immediately prioritize nationwide Internet coverage. Additionally, regulatory measures should be introduced to encourage telecommunications companies to expand Internet access across the country. The spectrum auction should be focused towards ensuring universal internet coverage rather than merely a means of generating revenue.
The Internet is an important tool to facilitate economic transactions and business operations. It is disappointing to note that Internet shutdowns in Pakistan, often for arbitrary reasons, disrupt essential economic activities.
PIDE is committed to fostering a digital landscape that not only empowers individuals but also positively contributes to the economic development of Pakistan. The research findings underline the urgency to address the challenges in Pakistan’s internet infrastructure to ensure a prosperous and connected future for all.
