Internet shutdowns cost Pakistan Rs 1.3 bn direct loss

ISLAMABAD: A study conducted by the Pakistan Institute of Development Economics (PIDE) revealed that the closure of internet services for 24 hours results in a direct loss of Rs1.3 billion, which equates to 0.57% of the daily GDP average for the nation.

According to a press release issued on Sunday, this study is part of PIDE’s research infographic titled “The Economic Cost of Internet Closure” and highlights the consequences of internet shutdowns in the country

It said that the internet has become a fundamental necessity in modern times, however, the internet infrastructure of the country lags behind in terms of both quality and coverage.

The recent internet closure in various parts of the country has had an impact on multiple sectors, leading to substantial financial losses and operational challenges.

Online cab services, online food delivery services, freelancers, transport companies, and postal services have all been affected by the disruption of internet services, it said.

The PIDE Infographic showed that online cab services, a cornerstone of modern transportation, saw a 97% reduction in the number of rides on days when the internet has been closed down. This significant downturn equates to a loss of Rs 29 to 32 million for the industry per day.

Similarly, online food delivery services suffered a 75% reduction in the number of orders, translating into a substantial daily loss of Rs 135 million.

Meanwhile, the freelance community, which contributes significantly to Pakistan’s economy, has also felt the brunt of internet disruptions.

Denial of orders to Pakistan-based freelance workers resulted in over $1.3 million loss of revenue, equaling Rs 390 million, impacting the livelihoods of many and the national economy as a whole too, it revealed.

Besides, the suspension of 3G/4G services for a single day causes a loss of PKR 450 million to the telecommunication sector alone.

Furthermore, PIDE had earlier estimated the economic costs of protests to be around 2.0% of the GDP. Closure of economic activity either through protests or due to the closure of internet services contributes to a significant loss of economic activity in the country.

Meanwhile,  Vice Chancellor PIDE Dr Nadeem ul Haque said that access to high-quality internet not only enhances opportunities for the youth, particularly in remote areas but also plays a pivotal role in bridging the divide between the privileged and the common public.

Utilizing online tools for education and professional purposes can empower youth from rural regions to compete on a national and international level, he added.