In a recent study conducted by the Pakistan Institute of Development Economics (PIDE), alarming findings have surfaced, shedding light on the profound economic consequences of internet shutdowns in Pakistan.

The study, titled “The Economic Cost of Internet Closure,” reveals the toll such disruptions take on the nation’s economy.

PIDE estimates indicate that a 24-hour closure of internet services results in a direct loss of Rs1.3 billion, equivalent to a 0.57 per cent of the daily GDP average for the country.

According to Dr Nadeemul Haque, Vice Chancellor of PIDE and Mohammad Shaaf Najib, Research Fellow at PIDE, the internet has become 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 need for substantial improvements.

Key findings of the study

Online cab services, a cornerstone of modern transportation, experience a staggering 97 per cent reduction in the number of rides on days when the internet is shut down. This downturn translates into a substantial daily loss of Rs29 to 32 million for the industry.

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Online food delivery services suffer a 75 per cent reduction in the number of orders during internet shutdowns, resulting in a significant daily loss of Rs135 million.

The freelance community, a vital contributor to the nation’s economy, bears the 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 as a whole.

The suspension of 3G/4G services for a single day causes a loss of Rs450 million to the telecommunication sector alone.

Dr Nadeemul Haque, Vice Chancellor of PIDE, emphasises 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, he added.

Internet shutdowns not only disrupt daily life but also have severe economic repercussions, affecting various sectors and the livelihoods of individuals.