Karachi, Pakistan On a hot day in Karachi, Mohammad Junaid, an employee of Pakistan Railways, stops his motorcycle at the side of the road to ask passersby if they need a ride. Junaid works part-time for a chauffeur service and earns about 800 Pakistani rupees (US$2.7) a day.
“My salary is not enough to cover expenses,” he told Al Jazeera. “I have to work for Bykea [the ride-hailing startup] to take care of my family.”
However, the cessation of internet services has caused his income to drop as rides are booked through the app, which requires the internet.
Ditto for thousands of app-based food delivery drivers.
In the last three days after the arrest of Imran Khan, leader of the Pakistani political party Tehreek-e-Insaf, serious internet connection problems have been reported in the country’s major cities. After the arrest, protests broke out across the country, including in front of the headquarters of the Pakistani army. Violence broke out in many cities.
Pakistan’s Telecommunications Authority said on Tuesday that mobile broadband services had been shut down on orders from the Interior Ministry, but gave no timeline for their restoration. Khan’s release was ordered Thursday after the country’s top court ruled his arrest unlawful. However, the shutdown of the mobile broadband network has not been lifted.
The decision came because Pakistan’s economy is struggling on many fronts.
Headline inflation hit a record high of 36.4 percent in April. Workers’ remittances, which contribute more than 8 percent to the economy, fell 29.2 percent year-on-year in April. Exports fell 26.68 percent year-on-year in April. The World Bank has revised Pakistan’s expected growth rate from 2 percent to just 0.4 percent.
Political unrest in the country sent the Pakistani rupee to a new low of 298.93 against the US dollar in the interbank market on Thursday.
“Pakistan has historically struggled with the twin deficits – a current account deficit and a budget deficit,” said Ehsan Malik, CEO of the Pakistan Business Council, a cross-industry advocacy group. “They have now been overtaken by a third deficit, namely the confidence deficit. Recent developments are a continuation and aggravation of this deficit.”
“The IMF [International Monetary Fund] “Do not trust either the current or the previous government,” Malik justified the lack of trust. “Our traditionally friendly countries are reluctant to provide assistance [as Islamabad has not met all IMF bailout conditions]. Politicians don’t trust each other. The judiciary is divided and the government is at odds [the judiciary’s] Decisions.”
He said while inflation has sharply reduced demand, supply has been hampered by a lack of foreign exchange reserves.
“People, especially talented people like IT specialists and engineers, are leaving Pakistan to seek opportunities abroad,” he said.
Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company, said the recent unrest could push back the resumption of the IMF program, which was conditional on Islamabad securing partner financing.
“The recent unrest could delay the provision of necessary funding from bilateral and multilateral partners,” he said.
In addition, tax collection is likely to fall with weaker economic output, while unemployment will rise and mobile internet-dependent gig economy workers will be disproportionately affected, he added.
“Political Circus”
The political unrest has resulted in the government shutting down the internet in several cities, hurting businesses and gig workers [File: Sabir Mazhar/Anadolu]Wille Eerola, chairman of the Finland Pakistan Business Council, said the current “circus” in Pakistan is damaging its international image and hampering foreign direct investment (FDI).
“The political circus that is taking place in Pakistan is absolute nonsense from an international point of view and such things even damage – or destroy – Pakistan’s image as a country for international business and foreign direct investment,” he said.
“Do we really want to create the image of a country with big demonstrations, unstable politics and demonstrations everywhere? Like the so-called banana republic? And even they would be better off. And yet we wish that foreign investors would be interested in Pakistan? That can’t happen.”
Aamir Ibrahim, CEO of mobile network Jazz, said mobile broadband is the lifeline of the digital ecosystem and a critical enabler for productivity across all sectors.
“The disruption not only limits people’s ability to communicate with friends and family, but also deprives 125 million Pakistanis of access to essential services such as education, healthcare and trade that are vital to their well-being,” Ibrahim said.
“It also prevents them from participating in the global economy as freelancers also continue to be severely impacted by this suspension.”
Telecom operators suffered an estimated 1.64 billion rupees ($5.4 million) in lost revenue, while the government lost about 574 million rupees ($1.9 million) in tax revenue from the service disruption, an industry source told Al Jazeera with. Fearing repercussions from government authorities, the source asked for anonymity.
Ibrahim Amin, chairman of the Pakistan Freelancers Association, said that the IT freelance industry is suffering a loss of nearly $2 million a day due to the shutdown of internet services.
He added that this will also create a very bad image for Pakistan’s IT sector, which will affect the country’s IT business in the future.
Meanwhile, Israel-based company Fiverr, an international platform for freelancers to connect with people who need services like content writing and software programming, is automatically putting Pakistani IDs into unavailable mode due to the situation.
Fiverr states on its website that freelancers from Pakistan are located in a region that is currently experiencing internet disruptions. It adds that these freelancers may not be able to fill orders as quickly as possible.
Jehan Ara, a member of the World Bank’s Gender Advisory Council, said that after seeing horrific images of violence, people from her international network sent her a message asking how she was doing.
“Investors are holding back their investments because they are no longer just concerned about the dollar-rupee exchange rate, inflation or state bank policy. They are concerned about the shutdown of internet and mobile services and the impact on business continuity and growth,” said Ara, who is also the founder and CEO of Katalyst Labs, a technology accelerator in Karachi.
“Our e-commerce businesses, which grew on the back of ever-increasing digital adoption, were all hit in one fell swoop — the ride-sharing services, the online marketplaces, the grocery delivery services, etc. were all hit, including drivers and delivery boys who are on depend on their daily wages.”
“Imran Khan’s arrest has upset many young people who see him as the only hope for this country,” she added.
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