Iran Completely Paralysed, Citizens' Plight Worsens
Jakarta, CNBC Indonesia - The prolonged internet blackout in Iran is beginning to impact the country’s economy. Several business actors warn that the situation could trigger a wave of mass layoffs and business closures amid the war and continuously deteriorating economic pressures.
The Iranian government imposed strict internet restrictions after the conflict with Israel and the United States broke out at the end of February. Previously, internet access was also blocked during large-scale demonstrations in various regions of Iran.
The global internet monitoring agency Netblocks describes the disruption, which has lasted more than 70 days, as the longest national internet shutdown ever in a digitally connected modern society.
Netblocks estimates that the internet restrictions have caused economic losses to Iran exceeding US$2.6 billion.
Iranian media outlet Donya-e Eqtesad even describes the impact of the internet blackout as a “silent earthquake” that has paralysed the country’s economy, equivalent to the effects of airstrikes by the United States and Israel.
The newspaper estimates Iran’s economic losses at more than four quadrillion rials, or nearly US$2.5 billion based on the open market exchange rate.
Founder of Netblocks, Alp Toker, stated that the impact of the internet blackout not only hits Iran’s digital economy but also broader sectors, including the informal economy, independent trade, and unofficial businesses.
“There is a significant impact, not only on Iran’s digital economy but more broadly, including the informal economic sector, independent trade, and unofficial businesses,” said Toker.
Iran has long been plagued by an economic crisis since US President Donald Trump imposed harsh sanctions on the country during his first term. The policy aimed to pressure Iran over its nuclear programme and foreign policies.
The situation has worsened after the rial’s exchange rate plummeted sharply, triggering large demonstrations. On the other hand, the near-total internet blockade has paralysed public activities, from work and education to daily communication.
This situation has a major impact considering Iran has a population of around 90 million with a smartphone penetration rate of 134%.
Last week, Iran’s Vice President for Women’s Affairs, Zahra Behrouz Azar, warned that women are the group most affected by the internet blackout.
According to her, the majority of self-employed workers and small business owners in Iran are women who rely on e-commerce platforms and social media to sell products or services.
Meanwhile, a senior official from the Tehran Chamber of Commerce, Industry, Mining, and Agriculture stated that the internet ban has triggered a “large wave” of unemployment.
Industry players previously also warned that internet disruptions have caused daily business losses in Iran of US$30 million to US$40 million.
Amir admitted that his clothing business heavily relies on social media like Instagram for sales and marketing. He said the platform’s popularity has been key to his brand’s growth in Iran.