Blocking Internet cost Egypt at least $90M, says OECD

The knock to business confidence is yet to be calculated

The Egyptian government's five-day block of Internet services cost the national economy at least US$90 million, the Organization for Economic Cooperation and Development (OECD) said Thursday.

The Paris-based organization said telecommunications and Internet services account for between 3 percent and 4 percent of Egypt's GDP, so the daily loss amounted to around US$18 million.

The Internet block was lifted on Wednesday, but it might be much longer before the true cost of the government's action on the economy is known.

By cutting telecommunications links, the government severed links between domestic and international high-tech firms and the rest of the world. As a result, the OECD warned, Egypt could find it "much more difficult in the future to attract foreign companies and assure them that the networks will remain reliable."

Egypt's major Internet service providers stopped routing traffic just after midnight local time on Friday as protests against the rule of President Hosni Mubarak gathered momentum in Cairo.

In minutes the amount of Internet traffic flowing between Egypt and the rest of the world was reduced to a trickle, according to monitoring by Massachusetts-based Arbor Networks.

"We have never seen a country as connected as Egypt completely lose Internet connectivity for such an extended period," said Craig Labovitz, chief scientist at Arbor Networks, on the company's security blog.

"Unlike periods as recent as a decade ago, governments of technically developed countries cannot disrupt telecommunication without incurring significant economic cost and social / political pressures," he said.

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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Tags governmentregulationinternetarbor networksOECD

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Martyn Williams

IDG News Service
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