Darrell M. West, Vice President, Brookings Institution

India tops the list in terms of countries suffering the greatest economic damage from Internet shutdowns in the past year. A Brookings Institution study analyzed the impact of these shutdowns, and of the 81 shutdowns in 19 countries, 22 took place in India over 70 days and their economic cost totaled
USD 968 million.

For this analysis, I relied on several types of information. For each incident, I identified the size of the country’s GDP, the duration of the disruption, and the percentage of the population affected by the disruption, whether the disruption was national or local in scope, the extent of the digital economy and mobile penetration in that nation, and a multiplier effect.

As an example, India shut down the mobile Internet services in Rohtak on February 19, 2016, in response to street demonstrations there and in Jhajjar. The disruption lasted more than a week and cost
USD 190 million. Law enforcement officials explained that “this has been done so that rumors are not spread as this could lead to the situation getting out of hand.”

Other examples include places where the country disrupted Internet services in response to concerns over students’ cheating in exams. An Indian official said, “Considering the sensitive nature of the exam for recruitment of talents, Internet service providers have been asked to shut down all Internet-based social media services from 9 a.m. to 1 p.m. to prevent the misuse of mobiles during the exam.”

Furthermore, there have been a few cases where regional Indian officials ordered disruptions in response to public security concerns. Countries increasingly are worried about national security and public safety and are invoking those rationales to slow or shut down the Internet.

The growing scope of Internet disruptions is creating significant detrimental impacts on economic activity in India as well as elsewhere around the world. 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.

Government officials increasingly appear 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.

The growing scope of Internet disruptions is impeding a significant amount of economic activity in a number of nations. Apart from weakening overall economic development, it exacerbates the plight of small and medium-sized businesses in these countries. As long as political authorities continue to disrupt Internet activity, it will be difficult for impacted nations to reap full benefits of the digital economy.

More and more consumers and businesses are engaging in e-commerce and online transactions. Internet disruptions slow growth, cost governments tax revenue, weaken innovation, and undermine consumer and business confidence in a country’s economy. As Internet-powered businesses and transactions continue to grow to represent an increasingly significant portion of global economic activity, the damage from connectivity disruptions will become ever more severe.


Pre-budget Expectations 2018: Rajan S Mathews, Director General, COAI

 

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