Government-Ordered Internet Shutoffs Cost Countries $2.4 Billion Last Year

Governments pay a significant price when they disrupt access and connectivity to the Internet because such shutdowns undermine economic growth, jeopardise lives, and erode confidence, Brookings Institution said in a study.

Between July 1 2015 and June 30 2016, 81 temporary internet blackouts in 19 countries cost those economies at least $2.4 billion (Rs. 16,024 crores), Darrell M. West, director of governance studies and founding director of Brookings' Center for Technology Innovation, wrote in the report. The figure is a conservative estimate as it doesn't include lost tax revenue or loss of trust from investors, consumers and businesses, West said.

From Egypt's five-day shutdown of the Internet during the 2011 Arab Spring protests to Burundi's block on WhatsApp and Viber during its presidential election in the spring 2015, governments are increasingly interfering with normal online operations. The number of such disruptions has risen to 111 in 2010 from 1 in 1995, University of Washington researchers found in a 2011 study.

"As long as political authorities continue to disrupt Internet activity, it will be difficult for impacted nations to reap the full benefits of the digital economy," West wrote.

India suffered the biggest impact valued over $968 million (roughly Rs. 6,465 crores) and North Korea was the lowest at $313,666, according to the report. There had been 14 shutdowns of national apps such as Twitter or Facebook, which was the most costly type of disruption at $1.04 billion. There were 36 instances of nation-wide Internet access cutoff, making that the most frequent type of disruptions.

Country Number of Days Total Dollar Costs India 70.54 $968,080,702 Saudi Arabia 45 $465,280,632 Morocco 182 $320,456,034 Iraq 2.75 $209,578,705 Brazil 5 $116,038,230 Republic of Congo 15 $72,514,694 Pakistan 3.83 $69,769,394 Bangladesh 25 $69,178,309 Syria (Islamic State-controlled areas) 348 $47,945,886 Turkey 2.75 $35,142,917 Algeria 6 $20,504,794 Vietnam 4 $11,921,178 Ethiopia 30 $8,539,355 Syria (non-IS areas) 0.60 $8,323,938 Chad 1 $3,712,931 Uganda 5 $2,160,617 Bahrain 8 $1,246,616 Libya 0.04 $414,194 North Korea 0.29 $313,666 Total 753 $2,431,122,803.

His analysis is based on 2014 World Bank gross domestic product data and the Boston Consulting Group's 2016 projections for how much each country's GDP is derived from the Internet economy. He also measured the financial impact of turning off mobile devices using information about subscriptions and referenced a Massachusetts Institute of Technology study on how free messaging apps help growth.

© 2016 Bloomberg L.P.