A recent study conducted by the Pakistan Institute of Development Economics (PIDE) has come up with alarming findings, highlighting the profound economic consequences of internet shutdowns in Pakistan.
The study, titled “The Economic Cost of Internet Outages,” shows the toll such disruptions have on a country’s economy.
PIDE estimates show that a 24-hour shutdown of internet services results in a direct loss of Rs 1.3 billion, which is equivalent to 0.57 percent of the country’s daily GDP average.
According to PIDE Vice Chancellor Dr. Nadeemul Haq and PIDE Research Fellow Mohammad Shaf Najeeb, Internet has become a basic necessity in modern times. However, despite its growing importance, Pakistan’s internet infrastructure lags in terms of both quality and coverage, highlighting the need for substantial improvement.
Key findings of the study
Online cab services, a cornerstone of modern transportation, experience a staggering 97 percent drop in ridership on days when the internet is down. This downturn translates into a substantial daily loss of Rs 29 to 32 million to the industry.
Online food delivery services face a 75% drop in orders during internet shutdowns, resulting in a daily loss of Rs 135 million.
The freelance community, which is a major contributor to the country’s economy, suffers significant losses due to internet bottlenecks. Freelance workers lost more than $1.3 million, equivalent to Rs 390 million, due to non-delivery of orders. These constraints affect both individual livelihoods and the national economy as a whole.
The suspension of 3G/4G services for one day has caused a loss of Rs 450 million to the telecommunication sector alone.
PIDE Vice-Chancellor Dr Nadeemul Haque emphasizes that access to high-quality internet not only opens up opportunities for the youth, especially in remote areas, but also bridges the gap between the privileged and the common people. It also plays an important role.
He added that the use of online tools for educational and professional purposes empowers the youth of rural areas to compete at the national and international level.
Internet shutdowns not only affect daily life but also have severe economic impacts, affecting various sectors and the livelihood of individuals.