An internet blackout began in Iran following nationwide demonstrations that engulfed the country in protest of the death of 22-year-old Martha Amini.
Iranian traders are coordinating Valentine’s Day gifts at a store in downtown Tehran, Iran, on the evening of February 13, 2024. [Getty]
A recent report in BBC Persian earlier this month revealed that Iran’s 17-month social media ban and occasional total internet blackouts have cost Iran’s economy more than US$1.6 billion and cost Iran’s low-income population It has become clear that this is adding to the economic problems. Iranian society.
Without official government data on Iran’s economic situation and the impact of internet connectivity and social media platforms on small and medium-sized businesses, it remains difficult to understand the damage caused by internet disruptions. However, information released by the government also shows a dire situation.
In September 2022, during Iran’s harshest internet shutdown, ISNA news agency associated with the country’s Cultural Revolution Supreme Council announced that every hour without internet costs Iran US$1.5 million. It was reported that
Internet blackout begins in Iran following nationwide demonstrations across the country protesting the death of 22-year-old Martha Amini in the custody of the Islamic Morality Police on September 16, 2022. Ta.
The regime has shut down the internet several times to control news about the demonstrations and brutal footage of police and Iran’s Islamic Revolutionary Guards Corps (IRGC) crackdown.
However, the intensity of total internet shutdowns decreased from January 2023 onwards. Several social media platforms and messaging applications remain blocked in the country, severely damaging an already troubled economy.
millions of dollars in losses
According to Statista, an online portal that provides data on the world’s digital economy in 2022, the internet in Iran was shut down for at least 7,171 hours, costing the country US$773 million.
Online shopping and electronic payment processing were hit hard. According to local media, before the 2022 protests, 90% of transactions in Iran took place virtually.
Jibar and Zarin Pal, two Iranian companies that provide online payment platforms for businesses, saw a significant increase in the number of online transactions they supported by 55% and 60%, respectively, in the first two weeks of the protests. experienced a significant decline.
Adding to the country’s economic crisis, authorities have blocked access to Google Play, the App Store, Skype and Microsoft websites, as well as cracked down on social media platforms such as WhatsApp and Instagram. However, it was small businesses that suffered the most significant economic damage from the social media ban.
In October 2022, Farzin Fardis, chairman of the Economic Innovation and Digital Transformation Committee of the Tehran Chamber of Commerce and Industry, said that the Instagram ban alone would lead to the closure of at least 500,000 Iranian small and medium-sized enterprises on the platform, and that Instagram estimated to have had a direct impact on One million Iranians and another eight million people will be indirectly affected.
Capital flight, looming crisis
Seventeen months after anti-regime protests first began, the country has seen a decline in the total number of internet shutdowns. However, bans on social media platforms and other websites remain firmly in place.
After four months of deadly clashes between protesters, police and Revolutionary Guards forces, authorities used social media bans to suppress any resurgence of protests.
Iranian economists and businesses were quick to point out that the ban had a major impact on the surge in capital outflows.
Nasser Beiki, head of Iran’s Arak Chamber of Commerce and Industry, warned that the country’s economy has already been hit hard by internet shutdowns and restrictions on internet users.
“One of the effects of the internet shutdown is capital flight,” Beiki said. “Capital, by its very nature, seeks a safe and secure environment, and if such a place cannot be found, capital cannot be sustained.”
A month after Beiki’s remarks, while a brutal crackdown on protesters was still ongoing, the Iranian Migration Data Portal published a report that said government restrictions on the internet had slowed the pace of capital transfers from Iran to other countries. I warned you about accelerating. .
On whether the pace of capital outflows will accelerate, the report stressed that “a quick glance at the official data released by the central bank shows that the answer to this question is positive.”
He added that over 20 years, the amount of capital transferred from Iran to other countries exceeded US$200 billion.
Despite mounting economic losses and calls from experts and the public to lift the ban, the government remained unresponsive.
In his latest statement on the internet ban, Iran’s Minister of Information and Communications Technology Issa Zarepour stressed in January that access to social media platforms and messaging applications will not be immediately available in the country.
Reza Olfat Nassab, a member of the trade union for internet-based businesses, highlighted the difficult situation: “For the past three years, the situation has been very dire. “I have come to accept that there is no solution.” . ”
Olfat Nassab highlighted the frequent disruptions in Iran’s internet and expressed concern about the possibility of further slowdowns and the imposition of further internet bans.
“The authorities are indifferent and show no concern for the lives of people who depend on the internet. As a result, we are doomed to continue using the internet as we have it,” he concluded.
