The Cost of VPN Closure A Threat to Pakistan’s IT Industry

By: Dauran Baloch

The Pakistan Software Houses Association (PASHA) has raised alarms over the government’s initiative to block unregistered Virtual Private Networks (VPNs) under cybercrime regulations, citing significant economic repercussions. PASHA estimates that each hour of internet disruption results in a loss of approximately $910,000 to the IT sector. VPNs are vital for secure communications and international client interactions; their restriction could compel IT firms and freelancers to consider relocation, leading to a potential annual loss of up to $1 billion. This is particularly concerning given that Pakistan’s IT exports reached a record $3.2 billion in the fiscal year 2023-24, marking a 24% increase from the previous year.

The government justifies the VPN restrictions by citing national security concerns, asserting that terrorists exploit VPNs to facilitate violent activities and access prohibited content. However, this blanket approach risks stifling the burgeoning IT industry, which is projected to grow by 7.31% annually, reaching a market volume of $3.5 billion by 2029.

A more balanced strategy would involve the registration and monitoring of VPN providers, aligning with global practices to address security issues without hindering economic progress. Such a policy would safeguard both national security and the vitality of the IT sector, ensuring its continued contribution to Pakistan’s economy.