The Egyptian government shut down the internet for five days during protests in 2011 © Press Association Images
The Egyptian government shut down the internet for five days during protests in 2011 © Press Association Images

State internet shutdowns cost $2.4bn

10 October 2016

Internet shutdowns by governments are costing the world economy billions every year, a study has calculated.

A report by Darrell West, director of the Center for Technology Innovation at the Brookings Institution, found 81 such shutdowns between 1 July 2015 and 30 June 2016 cost the global economy at least $2.4bn.

Even though the United Nations Human Rights Council condemned the practice, many member states had intentionally shut down or disrupted domestic internet access, including for political reasons.

These countries included India, Saudi Arabia, Morocco, Iraq, Brazil, Republic of the Congo, Pakistan, Bangladesh, Syria, Turkey and Algeria.

West said he had drawn upon data measuring GDP, shutdown duration, extent of the population affected, extent of the digital economy, extent of mobile penetration and a multiplier effect from the disrupted digital economy to calculate the cost of internet shutdowns.

He estimated that during the past year, India lost $968m from internet shutdowns, Saudi Arabia $465m, Morocco $320m, Iraq $209m, Brazil $116m, and Republic of the Congo $72m.

Turkey denying access to social media applications, Indian states shutting off mobile networks during student exam periods and Brazil blocking online video calls and instant messaging were examples of such disruptions.

In 2011 Egyptian authorities, facing anti-government street protests, shut down the internet for five days to disrupt the communications of protesters.

The Organization for Economic Development and Cooperation found the decision to cut connectivity cost Egypt $90m and would have reduced GDP by 3-4% had it continued for a whole year.

The majority of blackouts occurred in the Middle East and South Asia, with India, Iraq, non-ISIS Syria and Pakistan accounting for 71% of disruptions.

Denying internet services slows growth, costs governments tax revenue, weakens innovation and undermines consumer and business confidence, the report found.

“As internet-powered businesses and transactions continue to grow, they represent an increasingly significant portion of global economic activity. If shutdowns continue, the damage from connectivity disruptions will become ever more severe,” it said.

In his report West quoted a 2012 World Bank analysis which found “a 10 percentage point increase in fixed broadband [generated] a 1.35% increase in per capita GDP for developing countries and a 1.19% increase for developed countries”.

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