A recent study conducted by the Pakistan Institute of Development Economics (PIDE) has brought to light the profound economic consequences of internet shutdowns in Pakistan. Titled “The Economic Cost of Internet Closure,” the study sheds light on the toll these disruptions take on the nation’s economy.
The study’s estimates indicate that a 24-hour closure of internet services results in a direct loss of Rs1.3 billion, which is equivalent to 0.57 percent of the daily GDP average for the country.
Dr. Nadeemul Haque, Vice Chancellor of PIDE, and Mohammad Shaaf Najib, Research Fellow at PIDE, emphasized the critical role of the internet as a fundamental necessity in modern times. However, despite its growing importance, Pakistan’s internet infrastructure lags behind in terms of both quality and coverage, highlighting the urgent need for substantial improvements.
Key findings of the study include:
On days when the internet is shut down, online cab services experience a staggering 97 percent reduction in the number of rides. This downturn translates into a significant daily loss of Rs29 to 32 million for the industry. Internet shutdowns result in a 75 percent reduction in the number of orders for online food delivery services, leading to a daily loss of Rs135 million.
Freelance workers, a vital contributor to the nation’s economy, face significant losses due to internet disruptions. Denial of orders to freelance workers leads to over $1.3 million in lost revenue, equivalent to Rs390 million. These disruptions impact both individual livelihoods and the national economy. The suspension of 3G/4G services for a single day caused a loss of Rs450 million to the telecommunication sector alone.
Dr. Nadeemul Haque emphasized that access to high-quality internet not only opens up opportunities for the youth, particularly in remote areas but also plays a pivotal role in bridging the gap between the privileged and the common public. The use of online tools for education and professional purposes empowers youth from rural regions to compete on a national and international level.
In conclusion, internet shutdowns not only disrupt daily life but also have severe economic repercussions, affecting various sectors and the livelihoods of individuals. The study underscores the need for improving internet infrastructure and ensuring uninterrupted access to this essential resource.
