A recent and enlightening study conducted by the Pakistan Institute of Development Economics (PIDE) titled “The Economic Cost of Internet Closure” has shed light on the profound consequences of internet shutdowns on the Pakistani economy.
According to Dr. Nadeem ul Haque, the Vice Chancellor of PIDE, and Mohammad Shaaf Najib, a Research Fellow at PIDE, the internet has evolved into an essential necessity in modern society. However, Pakistan’s internet infrastructure currently lags behind in terms of both quality and coverage.
The recent instances of internet shutdowns in various parts of Pakistan have had far-reaching impacts across multiple sectors, resulting in significant financial losses and operational challenges. Online ride-hailing services, food delivery platforms, freelancers, transport companies, and postal services have all borne the brunt of prolonged internet disruptions.
The findings from the PIDE study reveal startling statistics. Online ride-hailing services, a cornerstone of modern transportation, witnessed a staggering 97% reduction in daily rides when the internet was unavailable. This substantial decline translates to a daily industry loss ranging from Rs29 to 32 million.
Similarly, online food delivery services suffered a 75% reduction in daily orders, leading to substantial daily losses amounting to Rs135 million.
The freelance community, a vital contributor to Pakistan’s economy, also faced severe consequences due to internet disruptions. Denial of orders to Pakistan-based freelance workers resulted in a loss of over $1.3 million in revenue, equivalent to Rs390 million. This has not only affected the livelihoods of many but also had a notable impact on the national economy.
Additionally, the suspension of 3G/4G services for just one day causes a loss of Rs450 million to the telecommunications sector alone.
Furthermore, earlier estimations by PIDE indicated that economic costs related to protests amount to approximately 2.0% of the GDP. The closure of economic activity, whether due to protests or internet shutdowns, contributes significantly to the loss of economic productivity in the country.
Dr. Nadeem ul Haque emphasized that access to high-quality internet not only provides opportunities for the youth, particularly in remote areas but also plays a crucial role in bridging the gap between privileged and common citizens. Leveraging online tools for education and professional purposes can empower rural youth to compete on both national and international stages.
PIDE has consistently advocated for “internet for all” and stresses that the government should prioritize immediate nationwide internet coverage. Furthermore, regulatory measures should be introduced to incentivize telecommunication companies to expand internet access across the country. Spectrum auctions should be geared towards ensuring universal internet coverage rather than solely for revenue generation.
The internet is a critical tool for facilitating economic transactions and business operations. It is disheartening to observe that internet shutdowns in Pakistan, often for arbitrary reasons, disrupt essential economic activities.
PIDE remains committed to fostering a digital landscape that not only empowers individuals but also contributes positively to Pakistan’s economic growth. The research findings underscore the urgency of addressing the challenges in Pakistan’s internet infrastructure to ensure a prosperous and connected future for all.