Disruption of firewall integration cost Pakistan’s economy $300 million
Disruption of firewall integration cost Pakistan’s economy $300 million
After a long wait and severe internet disruption, Pakistan’s government has finally uncovered the reason and admitted that Islamabad is implementing an internet firewall to monitor and regulate content and social media activities. During the integrating process, 30-40% of the internet speed has dropped. The govt said this is to prevent the government network from attacks and help the government identify the IP addresses associated with any ‘anti-stat propaganda’.
What PSHA Said About Firewall Integration?
Pakistan Software Houses Association (PSHA) said in a press release on Thursday, 15 August, that due to this whole national firewall integration process, Pakistan’s economy could lose up to $300 million.
Moreover, senior vice chairman of PSHA, Ali Ihsan, said the national firewall imposition has already caused prolonged internet disconnections and erratic VPN performance, threatening a “complete meltdown of business operations.”.
Further, he said, “These disruptions are not mere inconveniences, but a direct, tangible, and aggressive assault on the industry’s viability, inflicting estimated and devastating financial losses estimated to reach $300 million, which can further increase exponentially.”
PSHA said that the government’s lack of transparency around the firewall had “ignited a firestorm of distrust” among internet users, freelancers, and Pakistan’s global IT clients who fear their proprietary data and privacy will be compromised.
Not only PSHA but other organizations, including the Overseas Investors Chamber of Commerce and Industry (OICCI) and the Karachi Chamber of Commerce and Industry (KCCI), also expressed concerns about the impact of Internet disruptions on innovation, foreign direct investment, and businesses. Iftikhar Ahmed Sheikh, KCCI president, emphasized the need for prompt restoration of Internet connectivity, stating, “In the era of digitalization, Pakistan cannot afford such delays.”
How much does this disruption impact the Pakistani freelancer's economy?
Pakistan is the fourth-largest player in the global digital gig marketplace. In recent years, Pakistan’s freelance sector has flourished, with freelancers generating substantial revenue from international clients. In 2021 and 2022, Pakistani freelancers earned approximately $400 million annually, making up about 15% of Pakistan’s total $2.6 billion ICT exports.
This disruption is particularly consequential given the critical role that the freelance economy plays in Pakistan. Fiverr, the biggest freelancing platform, has set the accounts of Pakistani freelancers to “out-of-office” mode temporarily due to severe and ongoing internet disruptions across the country. Fiverr has announced that this measure aims to protect freelancers’ ratings and mitigate any negative impacts on their performance scores resulting from unexpected delays in order fulfillment. Fiverr has allowed the accounts to be made available if freelancers believe they have reliable internet.
This Internet disruption not only caused freelancers to lose projects but also damaged their relationships with clients and struggling to make ends meet. Freelancers, who rely heavily on Internet connectivity, bore the brunt of these disruptions. Dr. Amir Abbasi, a professor at Quaid-i-Azam University, highlighted the impact on students’ work, saying, “Over the past two weeks, students have struggled to meet project deadlines… This has raised concerns among academic institutions.”
This sense of helplessness and self-doubt is a harsh reality for many freelancers who have invested their time and resources into building a career in the digital economy and who solely rely on freelancing. This firewall disruption has not only affected their work but also their reputation and credibility in the global market.
Conclusion:
The disruption caused by firewall integration has far-reaching economic implications for Pakistan, with potentially devastating consequences for the freelance community and IT industry. The country’s IT exports have been growing steadily, reaching $298 million in June, up 33% from the previous year. However, the imposition of the firewall threatens to undermine this progress, deterring foreign investment and eroding the confidence of international clients. Considering all these situations, in the future, the authorities must act wisely to prevent a potentially catastrophic blow to the country’s digital economy.
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