Pakistan’s Internet Crisis: Economic Fallout and the Struggle for Digital Freedom
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The internet in Pakistan has suffered a significant blow, impacting a service that is not only a fundamental human right but also essential for running businesses and managing daily activities. The country is experiencing unexplained outages under the guise of cybersecurity, resulting in a 30-40% decline in internet speeds over the past few weeks, according to the Wireless and Internet Service Providers Association of Pakistan (Wispap). This decline has cost Pakistan's businesses hundreds of millions of dollars, according to IT companies.
In a nation already grappling with political instability, inflation, and unemployment, the internet was a critical resource that the youth of Pakistan could utilize to their advantage. However, due to recent disruptions linked to the implementation of a new firewall, many freelancers have lost their jobs, e-commerce businesses are in turmoil, and citizens are unable to conduct everyday transactions.
The government, already under significant pressure, now faces increased scrutiny for infringing on yet another fundamental freedom. Before causing further damage to the nation and itself, it must seriously consider whether this is a burden it is willing to bear as a political entity.
Khuram Rahat, vice-chair of P@SHA, an association representing approximately 1,500 software and IT companies, suggests that if the new firewall is behind the widespread disruptions, there should have been some forewarning. “It is understandable to take steps for national security, but in hindsight, it could have been better planned and managed,” he says. Azam Mughal, a cybersecurity expert at P@SHA, notes that members have reported significant financial losses. “International clients have expressed reluctance to assign future projects to these companies, as timely delivery is paramount in technology,” says Mughal. He adds, “Our survey indicates that the country has lost up to $300 million due to internet disruptions in recent months.”
The hardest hit are perhaps the more than 500,000 IT freelancers in Pakistan who rely on mobile data. “Is reliable internet too much to ask for in today’s digital age?” asks Bilal Khosa, a 25-year-old remote digital marketer. “Pending tasks, missed deadlines, and lost productivity are becoming the norm,” he laments. Khosa, who uses the freelancing platform Fiverr, now has an “out of office” message displayed on his profile. The slowdown has severely impacted his ranking, which could take “six months or more” to recover. “The competition is fierce, with hundreds waiting to take your place,” he adds.
The long-term economic impact on online business platforms due to Pakistan’s internet slowdown is alarming. Fiverr, headquartered in Israel, has made several accounts in Pakistan “unavailable” due to “internet disruptions” following the firewall trial. Numerous Fiverr users have reported receiving notifications stating that their profiles have been made “unavailable” to clients.
A freelance software developer shared that the inability to access Fiverr could severely impact his productivity and ability to deliver services to clients, potentially harming his reputation and future opportunities. For many in Pakistan, Fiverr is a vital source of income, helping to cover utility bills and educational expenses during the country’s ongoing economic challenges. The combination of economic difficulties and internet restrictions is exerting additional pressure on individuals already struggling to make ends meet.
Even larger companies are not immune. Veqar Islam, CEO of Jaffer Business Systems, which employs over 1,000 people, likens the current situation to taking Pakistan “back to the stone age.” He recounts a difficult meeting with U.S. clients who suggested relocating their back-end operations if they wish to continue working together.
Muhammad Aamir, CEO of AXCEL, an IT company, warned, “If you tighten your grip on the IT sector, remember this will become a bottleneck for the nation’s economy.”
Pakistan’s booming IT industry is now facing an existential crisis, dealing with unprecedented operational disruptions that threaten the very foundation of the country’s emerging tech sector. The firewall’s imposition has created a perfect storm of challenges, with prolonged internet disconnections and erratic VPN performance threatening a complete breakdown of business operations. P@SHA has pointed out that the government's lack of transparency around the firewall has "ignited a firestorm of distrust" among internet users and global IT clients, who now fear that their proprietary data and privacy are at risk.
Earlier, in February, when the government blocked access to X, where jailed former Prime Minister Imran Khan-backed independent candidates won the most seats despite a party ban, it was clear who they were trying to silence. However, in their efforts to suppress Khan, the state appears to be losing sight of the larger issue: a frustrated youth eager to seek better opportunities abroad.
By closely monitoring social media activities, the Pakistani state is attempting to create what Scott Malcomson would call an “isolationist internet,” a model unlikely to survive in an increasingly interconnected world. If the government and its leaders wish to retain the talents of the youth, they must provide space to grow and innovate in the digital sphere rather than erect barriers. The IT sector is one of the fastest-growing industries in Pakistan, and the benefits of the internet and its global interoperability are too valuable for a fragile state like Pakistan to relinquish.
Those in power must recognize that interfering with the internet is not akin to banning a television channel or silencing journalists. The internet is a force so vast that even an autocratic government like China has struggled to contain the use of VPNs. Replicating the Chinese Firewall model in a country with weak technological infrastructure like Pakistan is exceedingly difficult.
In its attempts to counter online dissent and social media activism, the state has jeopardized the economy, risking a loss of $300 million and pushing multinational corporations to consider relocating from Pakistan.
In a perplexing statement, Minister of State for Information Technology Shaza Fatima claimed that her team is "working tirelessly" with internet service providers and telecom companies to resolve the issue while dismissing allegations that the government was behind the slowdown. Fatima attributed the slowdown to a large number of Pakistanis using VPNs, which she claimed strained the network. This statement has drawn ridicule, undermining her credibility and highlighting her lack of IT knowledge. Her selection as IT Minister appears to have been based on her familial ties to Khawaja Asif rather than merit.
The Pakistani government allocated over PKR 30 billion in its development budget for acquiring and installing the filtering system, prioritizing this expenditure over addressing the country’s looming economic crisis. This decision underscores the government’s focus on controlling the flow of information rather than addressing more pressing economic challenges.
One of the foreign software company who is operating in Karachi and bringing the dollars to Pakistan, let's see what its CEO has to say about Pakistan:
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