Internet Shutdowns Result in Rs 1.3 Billion Direct Loss for Pakistan

A recent study conducted by the Pakistan Institute of Development Economics (PIDE), titled "The Economic Cost of Internet Closure," has shed light on the severe consequences of internet shutdowns in Pakistan. The research reveals that a 24-hour internet shutdown leads to a direct financial loss of Rs 1.3 billion, equivalent to 0.57% of the country's daily GDP average.

The study emphasizes that the internet has become an essential utility in the modern world, yet Pakistan's internet infrastructure lags behind in terms of quality and coverage. The recent spate of internet closures across various regions of the country has resulted in significant financial losses and operational challenges across multiple sectors.

Online cab services, online food delivery services, freelancers, transport companies, and postal services have all borne the brunt of these disruptions. Here are some of the key findings from the PIDE study:

1. Online Cab Services: The study indicates that online cab services experienced a staggering 97% reduction in the number of rides on days when internet services were shut down. This drastic decline translates to a daily loss ranging from Rs 29 to 32 million for the industry.

2. Online Food Delivery Services: Similarly, online food delivery services saw a 75% reduction in the number of orders, resulting in a substantial daily loss of Rs 135 million.

3. Freelance Community: Pakistan's freelance community, a significant contributor to the national economy, also suffered due to internet disruptions. Denial of orders to Pakistani freelance workers led to a loss of over $1.3 million in revenue, which equals approximately Rs 390 million. This not only impacted the livelihoods of many freelancers but also had a broader effect on the national economy.

4. Telecommunication Sector: The suspension of 3G/4G services for a single day caused a loss of PKR 450 million to the telecommunication sector alone.

Furthermore, PIDE had previously estimated that economic costs resulting from protests amounted to approximately 2.0% of the GDP. The closure of economic activity, whether due to protests or internet shutdowns, significantly contributes to economic losses in the country.

Vice Chancellor of PIDE, Dr. Nadeem ul Haque, highlighted the importance of access to high-quality internet, especially for the youth, particularly in remote areas. He noted that high-speed internet not only opens up opportunities for young people but also plays a crucial role in bridging the gap between the privileged and the general public. Leveraging online tools for education and professional purposes can empower rural youth to compete at national and international levels.