How much does internet shutdown cost India? Brookings says $968 million

Internet shutdowns, caused due to six categories of disruptions, cost about $2.4 billion in GDP globally between 1 July 2015 and 30 June 2016, says Brookings Institution


Brookings Institution argues in a paper that internet disruptions are creating significant detrimental impacts on economic activity in a number of nations around the world. Photo: iStockphoto
Brookings Institution argues in a paper that internet disruptions are creating significant detrimental impacts on economic activity in a number of nations around the world. Photo: iStockphoto

New Delhi: The internet is free and open, or so we like to believe. In recent years, a number of countries have blocked particular applications, shutdown specific digital services, turned off mobile telecommunications services, or disrupted the entire internet.

In a recent paper Internet shutdowns cost countries $2.4 billion last year by Brookings Institution, a non-profit public policy organization, author Darrel M. West analyses the economic impact of temporary internet shutdowns. West examines 81 short-term shutdowns in 19 countries over the past year and estimates their impact on the Gross Domestic Product (GDP) of those nations.

Based upon this analysis, West finds that between 1 July 2015 and 30 June 2016, internet shutdowns cost at least $2.4 billion in GDP globally.

India faces the highest economic loss at $968 million followed by $465 million loss in Saudi Arabia, Morocco ($320 million) , Iraq ($209 million), the Republic of the Congo ($72 million) , Pakistan ($69 million), Syria ($48 million), and Turkey ($35 million), among other places. These are conservative estimates that consider only reductions in economic activity and do not account for tax losses or drops in investor, business, and consumer confidence.

West argues in the paper that internet disruptions are creating significant detrimental impacts on economic activity in a number of nations around the world. He says: “As the digital economy expands, it will become even more expensive for nations to shut down the internet. Without coordinated action by the international community, this damage is likely to accelerate in the future and further weaken global economic development.”

Internet disruptions over the past year

West finds that there is a rising trend of governments disrupting the internet and quotes a study by University of Washington researchers who identified 606 occasions between 1995 and the first part of 2011 where 99 different governments deliberately “interfered” with the normal operation of the internet.

To ascertain the number of times disruptions have happened in the past year, West collected cases from internet searches, English-based news coverage, and lists compiled by non-profit organizations that track such disruptions. Overall, he cites 81 disruptions in 19 countries during this period. This includes 22 in India, Iraq (22), non-ISIS controlled parts of Syria (8), Pakistan (6), Turkey (3), and 2 each in Bangladesh, Brazil, North Korea, the Republic of the Congo, Uganda, and Vietnam, among other places.

West also identified six categories of disruptions: national internet, sub-national internet, national mobile internet, sub-national mobile internet, national app/service, and sub-national app/service (including VoIP).

The impact on Gross Domestic Product

Overall, these disruptions cost countries a total of at least $2.4 billion over the past year, with impact ranging the highest in India at $968 million. These disruptions lasted 753 days in total across all countries. West also cites a number of notable internet disruptions. One took place in Saudi Arabia in May 2016. Citing economic damage to telecommunications providers, the government blocked functionality of a number of apps related to VoIP, texting, and instant messaging; those impacted included WhatsApp, Facebook Messenger, and Skype, among others. The move cost the country $465 million in GDP. India, for instance, shut down mobile internet services in Rohtak on February 19, 2016 in response to street demonstrations in Rohtak and Jhajjar. The disruption lasted more than a week and cost $190 million. Law enforcement officials explained that “this has been done so that rumours are not spread as this could lead to the situation getting out of hand.”

In Brazil, a local judge ordered telecommunications companies to block access to WhatsApp on May 2, 2016 following an earlier shutdown in December 2015. The May shutdown blocked access to the predominant communications service across the country for a day and cost the Brazilian economy $39 million.

West concludes by saying that government officials in many countries around the world appear increasingly comfortable blocking access to online services and apps, despite the significant economic and social damage that internet service disruptions bring

to their countries. Whether their ostensible motivations are public security or political self-preservation, government officials should understand the wide-ranging and destructive consequences of these moves. Shutting down access

to popular services or to the whole internet—even for a short period of time—undermines economic growth, puts lives in jeopardy, separates people from friends and family, and erodes confidence in the governments that take

such drastic and ill-advised steps. West said in an email interaction:“Government leaders need to understand they shoot their economies in the foot when they disrupt the internet. Shutdowns harm small and large businesses and lead to big economies losses. As the digital economy grows, these costs will accelerate.”

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