Web blackouts don’t just silence dissent – they hurt your wallet too

The global cost of internet blackouts rose to $24 billion in 2022, more than quadruple the total for the previous year – although the lion’s share of that was suffered by Russia. Meanwhile, experts are warning that this economic toll may prove even more harmful to citizens of authoritarian countries than the human rights cost.

“Businesses will mostly suffer and might have a major disruption in their ability to operate properly, especially if the business is measured by its production per time, such as factories,” said Shmuel Gihon, a security researcher at Cyberint. “This will eventually lead to a loss in revenues, both for the factory and for the country, in terms of taxes, and in the long term, might lead to businesses leaving the country entirely.”

As might be expected, Russia topped the list compiled by Top10VPN for losses, sustaining an estimated $21.59 billion in lost revenue amid 7,407 hours of blackouts that affected more than three-quarters of its population – 113 million people.

But other countries, including those such as India that are not regarded as pariah states by the international community, suffered considerable losses. The research compiled by Top10VPN found that the South Asian giant lost $184.3 million due to government-imposed blackouts that saw internet services denied to more than 120 million people, less than a tenth of its vast population, of whom around half do not have access to the web.

Blackouts hurt in more ways than one

“Overall, internet shutdowns can result in a significant decline in economic growth, decreased competitiveness, and reduced opportunities for businesses and individuals,” said Gihon. “Of course, human rights may be the primary concern in many situations, but the economic hardship induced by such matters is almost always a potent force.”

And in an era when the growth of digital businesses is becoming more central to economies across the globe, such draconian measures by authoritarian or overly suspicious regimes will only hurt its people more in the long run as they prevent their economies from diversifying.

“Businesses that provide online services, streaming services, and more, won't be able to thrive in these countries, which will lead to the limitation of business types that can operate in these countries,” said Gihon.

The unpredictable climate long abhorred by businesses that internet blackouts create might also deter future foreign direct investment, leading to further economic pain even if blackouts are subsequently lifted.

“Businesses may view the government as unreliable and choose to locate elsewhere or wouldn’t like to expand to these countries in the first place – especially when we talk about businesses in which information security and privacy are important to its customers,” said Gihon. “Foreign investors may view shutdowns as signs of political instability and choose to invest in other countries.”

Not a list you’d want to be on

Filling the next four top slots between Russia in the first place and India in sixth were Iran, Kazakhstan, Myanmar, and Uzbekistan, according to Top10VPN, which sourced its data from World Bank and government reports.

It measured the most severely restricted countries by taking into account national and regional shutdowns, cross-referencing these with social media restrictions and what it calls “throttling” – deliberately reducing internet connection speeds for end users.

The virtual private network (VPN) reviewer says it is “fiercely opposed to internet censorship and governments withholding access to the internet as a form of social control.”

The previous year, Top10VPN estimated the global total economic cost of internet blackouts to be just $5.62 billion – still a 40% rise in 2020 but far short of 2022.

Just over half of last year’s shutdowns were associated with “additional human rights abuses,” although this represented a decrease in 2021 when nearly three-quarters of blackouts were linked to other such infractions.