Any Pakistani regularly interacting with foreigners has probably learned the art of navigating difficult questions, be they about the state of our democracy, human rights, or security. It’s far from a comfortable conversation with lots of context and occasional whataboutery. But for the most part, it’s all small talk with nothing of actual consequence.
Or at least it was until recently. Over the last few years, those working with foreign clients have seen a major shift as questions about Pakistan transcend small talk and directly relate to the ability to deliver tasks. It’s no longer the theoretical “Is it safe to visit there?” but rather the upfront “Would you be able to guarantee the project given the internet situation?”
This is a sobering reality check for Pakistan’s digital economy, which already had its fair share of challenges including macro uncertainty, dearth of capital and talent scarcity. Now, there’s another solid and needless contender to the list — one that shakes up the most fundamental building block.
According to Top10VPN, which collects and aggregates data on internet disruptions around the globe, Pakistan ranked second by the duration of shutdowns in 2024 at 1,861 hours behind only Myanmar — which is hardly the country we should aspire to. This cost us an estimated $351 million, again second only to our South Asian peer. Where we really outshined everyone was the scale: at almost 83m users, the magnitude of our ‘shenanigans’ had no parallel and alone accounted for over 40 per cent of the top 15 most vulnerable countries.
Not only that, but we also significantly upped our own performance with the duration of internet shutdowns surging 619pc from 259 hours in 2023 — rising up five notches from seventh place globally. As a result, accompanying costs also shot up by an additional $114m. Other trade bodies and organisations have presented their own numbers, with the Pakistan Software House Association claiming a loss of $1m for each hour of internet outage. Amidst the recurring balance of payments crisis Pakistan faced, the information and communication sector has emerged as a strong source of dollars. In 11MCY24, it has contributed $3.3 billion — behind only the textile and food group. Particularly within services, it’s the only category consistently registering a surplus. Do internet shutdowns wipe this off? Obviously not, but they raise the cost of operations for local tech companies, which always stings.
More importantly, it discourages them from bringing back any more forex than absolutely needed. This further exacerbates the problem of undocumented exports, which by some estimates equal the officially recorded figure. As long as the latter is showing healthy growth, those in power don’t really give much regard to the former since it can’t be measured anyway.
However, what can be measured is the slowdown in the usage of the internet in Pakistan. According to Cloudflare, the country has seen an annual decline in web traffic for most of 2024. In fact, during the first 11 months, there were a total of 30 odd days where the percentage change was not in the red. Over this period, our peak growth was 3pc, compared to the global 17pc — despite the significant differences in respective bases.
Keep in mind that when we get the internet, the quality is not exactly great. The average download speed in Pakistan was just around 22MBps, lagging well behind peers like the Philippines (97MBps), Bangladesh (37MBps) and Indonesia (31MBps).
Secondly, such episodes do irreparable damage to the confidence of young, talented Pakistanis. Other than family, what incentive do they have to stay behind? After all, the value of their hard-earned money has plunged to less than half over the last few years while every good has become dearer. There weren’t too many rights being enjoyed, to begin with, but at least one had internet access to rant without the big brother constantly knocking on the door.
The writer is the Co-founder of Data Darbar
Published in Dawn, The Business and Finance Weekly, December 30th, 2024
