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Internet and Social Media Blackouts Are Hurting Businesses in Pakistan

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The Pulse | Economy | Politics | South Asia

Internet and Social Media Blackouts Are Hurting Businesses in Pakistan

The internet offers Pakistan a path for sustainable economic growth. Government “security” policies must not get in its way.

Internet and Social Media Blackouts Are Hurting Businesses in Pakistan
Credit: Flickr/BrickinNick

Waqas Ahmed, a Rawalpindi-based online cloth seller at Kite Cloths, lost a good amount of his earnings on April 16 when, without any prior notice, Pakistan decided to shut down social media across the country. Mobile services and Internet were also interrupted in major cities.

The action was taken amid fears that activists belonging to the Islamist group Tehreek-e-Labaik (TLP) might use the technology to perpetuate violent protests, to press their demand for the expulsion of France’s ambassador to Pakistan.

The issue of violent protests was resolved after intense negotiations between the government and TLP. But small and medium online businesses had to bear irremediable damages due to the lack of social media connectivity.

“I lost almost 50,000 Pakistani rupees on that day, as Ramadan is the month in which we invest 70 percent more on social media ads to attract consumers for Eid shopping,” Waqas laments. “Apart from directly losing money, the biggest loss is the disruption of our social media marketing strategy, which is fueled by internet connectivity and activity algorithms. If a social media marketing campaign lost its consistency for any reason it has a huge impact on the overall reach of ads and sales.”

Despite lack of infrastructure and cyber policies, Pakistan is one of Asia’s fastest-growing internet market, with more than 87 million citizens with access to the internet. Despite economic slowdown and coronavirus pandemic, Pakistan’s gig economy continued its prolific growth as the country became the eighth fastest-growing freelancing nation with annual revenue growth of 69 percent.

However, consumers are losing millions due to regular blackouts of the internet for “security reasons.” Lack of cyber laws and implementing mechanisms in such scenarios destabilizes the internet and gig economy environment, and has serious implications for Pakistan’s economic growth and, consequently, its stability. No policies or mechanisms are in place to compensate those who lose money in such scenarios.

The bigger the business, the bigger the loss. Ashfaq Rafiq, a tech and e-commerce entrepreneur who provides online marketing services to Pakistan-based businesses, says that whenever the government decides to close or restrict internet and social media, mostly without any prior notice, his business and clients lose millions.

Social media – or complete internet – blackouts are not a new phenomenon in Pakistan. The state has been practicing it since 2005. The strategy is mostly implemented on occasions like Eid, Muharram, and other events of political and religious significance for the sake of “security measurements.” Internet and social media blackouts are also used by governments for their political goals which makes this whole phenomenon unpredictable and damaging.

Based on data from media and individual reports collected in Pakistan, a recent article analyzed 41 internet shutdowns between 2012 and 2017. The findings from the data estimated more than two million dollars of loss in revenue for small and medium businesses alone.

Fahad Aziz, a cybersecurity expert at online marketing agency Goflare says, “we understand that we have security issues, but we can opt for other option instead of blocking internet or social media. The government always choose a blackout of the internet, which is the easiest option for them, even knowing its impact on businesses.”

“For a country which is already is in economic turmoil, information technology has been a sign of relief and has immense potential for economic growth but only if the blackout strategy is revised and other options are opted,” he adds.

Despite all the challenges, the information technology sector has shown promising results for Pakistan’s economy. According to the latest report published by Arif Habib Limited, the country’s IT exports touched $213 million in March, which was 58 percent higher when compared to the corresponding period the previous year.

According to the Economist Intelligence Unit’s “Inclusive Internet Index,” Pakistan dropped to 90th rank among 120 countries in 2021, the lowest in the region.

Pakistan’s social media blackout strategy sends negative signals to investors, who feel reluctant to invest in the information technology sector as they are not sure about government policies and implementation mechanisms. The government should at the very least start considering other options – as alternatives to social media or complete internet blackout – to minimize revenue loss and earn investor confidence. It should also revise its laws and policies related to social media and e-commerce making business easy for information technology entrepreneurs and for sustainable economic growth.