REALITY OF PROJECTED LOSSES FROM INTERNET DISRUPTION IN PAKISTAN
(Hira Tahir)
Recent media coverage from prominent national and international media have emphasized claims that Pakistan’s IT industry faces losses of over $1 million for every hour of internet disruption. This alarming figure has sparked significant concern and ignited intense debates, highlighting the sector’s critical role in driving the nation’s economic growth. While the claims are concerning, a deeper analysis of the situation reveals several inconsistencies, suggesting that the projected losses may be vastly inflated. In fact, it appears that the true financial impact on Pakistan’s IT industry may be far less severe than these exaggerated estimates would have the public believe. Such exaggerations not only give a false picture of the situation but also take away from the real progress and growth of Pakistan’s booming IT sector.
This falsification comes at a time when internet speeds in Pakistan have slowed significantly, primarily due to faults in two of the seven international submarine cables (AAE-1 and SMW-4), which has led to noticeable disruptions in connectivity. While these issues have undeniably impacted online services, the claim that Pakistan’s IT industry suffers a loss of $1 million per hour due to these disruptions is highly exaggerated and lacks concrete evidence. NetBlocks, a global internet monitoring organization, estimates an hourly loss of $2.21 million for a complete internet shutdown in Pakistan, using its Cost of Shutdown Tool. However, it is important to note that this estimate applies only to complete nationwide outages and does not take into account the less severe financial impact of partial disruptions or service degradation.
As such, it is essential to distinguish between partial disruptions and total outages. Most of the issues reported in Pakistan are localized, affecting specific internet service providers (ISPs) or regions, rather than causing nationwide blackouts. Therefore, the financial impact of such disruptions is considerably lower than that of a complete outage, as many businesses and services continue to operate during these partial disruptions. By recognizing the difference, a clearer picture of the true financial effect can be formed, and more balanced discussions can be held about the challenges faced by Pakistan’s IT sector.
Pakistan’s IT and IT-enabled services (ITeS) sector has undergone transformative growth, positioning it as a key player on the global stage. It is ranked as the second most financially attractive destination for offshore outsourcing and is second largest in software and technology services. Additionally, Pakistan is the fourth-fastest growing country in freelancing. The nation’s workforce, which is the fourth largest in IT labour services globally, provides services that are 70% more cost-effective than those in North America and Europe. Pakistan has 12 technology zones that employ over 15,000 skilled workers, and the construction of four new zones will offer better facilities, improved infrastructure, and high-speed internet, boosting the sector’s capabilities.
In addition to this, the IT industry has experienced significant growth, with exports rising from $1.4 billion in 2019-2020 to $1.9 billion in 2022-2023. The exports surged by 24% in 2023-2024 to reach $3.2 billion, marking a significant improvement in the sector. Pakistan’s IT workforce includes over 300,000 English-speaking professionals, and more than 20,000 IT graduates and engineers join the workforce each year. . The country’s developing ecosystem is further bolstered by 13 software technology parks and a flourishing start-up culture. Notably, over 60% of the country’s IT and ITeS exports are directed to major markets such as the U.S. and the U.K.
Moreover, Pakistan earned observer status at the Digital Cooperation Organization (DCO) and extended its branding efforts to 24 countries. Its growing influence as a global tech hub was recognized when it was named “Tech Destination of the Year” at GITEX Global 2024 in Dubai. The country also made a strong showing at major global events like LEAP 2024, with 74 companies and 800 delegates participating. Moreover, Pakistan has strengthened its partnerships with Saudi Arabia and the UAE in the tech sector, while signing important agreements with Bahrain, Brazil, and Jordan, solidifying its position as a key player in the global IT industry.
While internet disruptions pose challenges to Pakistan’s IT sector, it is important to focus on realistic solutions rather than exaggerated claims. By addressing these issues through improved infrastructure, robust backup systems, and thoughtful policy reforms, the country can continue its steady growth in the technology sector. As Pakistan’s IT landscape evolves, its potential is being increasingly realized, with ongoing efforts paving the way for sustained innovation and success on the global stage.
