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Today's Paper | December 12, 2024

Published 18 Mar, 2024 07:02am

Economic cost of social media ban

THE internet and social media platforms are modern-day lifelines for commerce, communication and information exchange. Restricting access to these services — officially or unofficially — can be likened to constricting the arteries of the nation’s economy, impeding the flow of business and innovation. While security and regulatory concerns of authorities are sometimes valid, solutions should be sought that balance these requirements with the need to sustain internet access to support the nation’s socioeconomic development.

The direct losses incurred to the nations as a result of these disruptions are immense, and can easily be calculated by inserting vital information in simple formulas. For example, given Pakistan’s gross domestic product (GDP) of $1.24 trillion in February 2023 and merchandise trade forecast of $95.96 billion in 2024, the daily GDP for 2024 is approximately $15.85 billion. The per-day merchandise roughly stands at $1.23 billion, and assuming a 50 per cent overall impact on merchandise trade due to closures, the daily loss from shutting down the internet comes out to about $615 million.

The indirect costs of internet shutdowns on businesses, trade and investment are multifaceted. Internet shutdowns disrupt economic activities, leading to losses in e-commerce, delays in time-sensitive transactions, increased unemployment, and interruptions in business-customer communications. These disruptions result in financial and reputational risks for companies, affecting local businesses as well as international trade and investment.

It is ironic that a decision that has been taken to supposedly protect the country and the nation actually results in losses worth billions of dollars, and that makes the national economy more vulnerable than any political narrative.

Besides, when social media platforms are blocked, or the internet services are disrupted, such decisions lead to widespread condemnation by a range of international bodies. This costs the country in terms of its image in the wider world, eroding the country’s soft image and that leads to further financial, business, tourism and soft capital losses.

The erosion of a country’s soft image can be even more detrimental in the long term. It can lead to a decline in investor confidence, reduced foreign direct investment, and a negative impact on the country’s diplomatic relations and international standing.

Moreover, the disruption of internet services can also affect the country’s attractiveness as a destination for tourism, international events, confe-rences, and cultural exchanges, further impacting its capital and potential revenue streams.

The new government, along with the legislature, must enact and enforce laws that protect internet access as a funda- mental right, with a clear emphasis on transparency, accountability and adherence to international human rights standards. This legal framework should be designed to prevent unwarranted internet shut- downs, to maintain neutrality, and to ensure open access for one and all.

Qamar Bashir
Islamabad

Published in Dawn, March 18th, 2024

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