A recent study conducted by the Pakistan Institute of Development Economics (PIDE) has shed light on the significant economic impact of internet shutdowns in the country. The study, titled “The Economic Cost of Internet Closure,” underscores that a 24-hour internet shutdown results in a direct loss of Rs1.3 billion, which accounts for 0.57% of the nation’s daily GDP average.
The study emphasizes the critical role the internet plays in modern life, yet it highlights that Pakistan’s internet infrastructure lags behind in terms of both quality and coverage. Recent internet shutdowns in various parts of the country have affected multiple sectors, leading to substantial financial losses and operational challenges.
Online cab services, a fundamental part of modern transportation, experienced a staggering 97% reduction in the number of rides on days when the internet was shut down. This translates to a daily industry loss of Rs29 to 32 million.
Online food delivery services suffered a 75% reduction in the number of orders, resulting in a significant daily loss of Rs135 million.
Pakistan’s thriving freelance community, a crucial contributor to the economy, faced significant setbacks due to internet disruptions. Denial of orders to Pakistan-based freelance workers led to a loss of over $1.3 million in revenue, equivalent to Rs390 million.
The suspension of 3G/4G services for a single day causes a loss of PKR 450 million to the telecommunication sector alone.
Moreover, PIDE had earlier estimated that economic costs associated with protests amount to approximately 2.0% of the GDP. The closure of economic activity due to protests or internet shutdowns significantly impacts the country’s economic activity.
Dr. Nadeem ul Haque, Vice Chancellor of PIDE, emphasized the importance of high-quality internet access. He highlighted that such access not only opens up opportunities for youth, especially in remote areas but also plays a vital role in bridging the gap between the privileged and the general public. Utilizing online tools for education and professional purposes empowers rural youth to compete nationally and internationally.
