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$70 million — the loss to Pakistan’s economy from internet shutdowns

Internet blackouts across 19 countries cost at least $2.4 billion in GDP globally.
Updated Oct 07, 2016 04:42pm

Six internet shutdowns that occurred in Pakistan between July 1, 2015 and June 30, 2016 cost the country’s economy an astonishing $69.7 million, contributing to a total global cost of $2.4 billion, says Darrell West in a study published by Centre for Technology Innovation, Brookings Institution.

Citing the example of one such instance between March 12 and 23, 2015, West says Pakistan shut down mobile telecommunication services due to security reasons on the Pakistan Day parade.

“All mobile operators were told by national authorities to shutdown mobile communications within a 5km radius of the parade site. This move affected a major hospital, an airport, and businesses near Islamabad,” he writes.

In the study, West has examined 81 short-term shutdowns in 19 countries over the past year and estimated their impact on the economy of each nation.

He argues that if political authorities continue to disrupt internet activity, “it will be difficult for impacted nations to read the full benefits of the digital economy”.

“The growing scope of internet disruptions is creating significant detrimental impacts on economic activity in a number of nations around the world,” he says.

Based upon the analysis, West has derived that in the last fiscal year internet blackouts across the 19 countries cost at least $2.4 billion in Gross Domestic Product (GDP) globally.

“As the digital economy expands, it will become even more expensive for nations to shut down the internet,” West, who is also the founding director of Centre for Technology Innovation, writes.

“Without coordinated action by the international community, this damage is likely to accelerate in the future and further weaken global economic development.”

Economic losses include $968 million in India, $465 million in Saudi Arabia, $209 million in Iraq, $69 million in Bangladesh, $48 million in Syria, and $35 million in Turkey, among other places.

“These are conservative estimates that consider only reductions in economic activity and do not account for tax losses or drops in investor, business, and consumer confidence,” says West.