The city’s decline may have much to do with a lack of political ownership, but the situation cannot be allowed to continue. The way out is for the business community to step up with a common agenda.
Cities have a big role to play in national and global economies. According to a Mckinsey report on urbanization, “The world is in the throes of a sweeping population shift from the country side to the cities and for the first time in history more than 50% of human population is living in towns and cities…underpinning this transformation are the economies of scale that make concentrated urban centers more efficient”.
This scale helps cities provide better human interaction through transport and communication, health services, water and sanitation and most importantly attracting talent and skilled labor together with managerial capability. New York, London, Istanbul, Tokyo, Seoul, Shanghai – they are all equipped with these basic attributes and are therefore vibrant places to live.
In my quest to learn where Karachi stands relative to the world, I came upon Wikipedia’s description of Karachi, some of which I reproduce here;
“Karachi is the capital of the Pakistani province of Sindh. It is the largest city in Pakistan and the twelfth largest city in the world…the city is Pakistan’s premier industrial and financial center, with an estimated GDP of $114 billion as of 2014 it is Pakistan’s most cosmopolitan city, linguistically, ethnically and religiously diverse, as well as one of Pakistan’s most secular and socially liberal cities…Karachi collects more than a third of Pakistan’s tax revenues and generates approximately 20% of Pakistan’s GDP. Approximately 30% of Pakistan’s industrial output is from Karachi while Karachi ports handle 95% of its foreign trade. Almost 90% of multinationals operating in Pakistan are headquartered in Karachi. Karachi is considered to be Pakistan’s fashion capital and has hosted the Pakistan Fashion Week since 2009”
An important point is that most businesses thrive in large cities which have these elements because of which companies prefer to locate themselves there. This in turn provides more economic activity and this pattern thus becomes a virtuous cycle of its own.
Why the deterioration?
So why, despite Karachi’s disproportionate contribution to Pakistan’s economy, has the city been deteriorating in terms of basic services, infrastructure and much more critically harmony between diverse social, religious and ethnic communities. The Wikipedia entry actually goes on to discuss the violence in the 80’s which started during the Afghan war and covers the clean-up operation which was carried out only a few years back.
We do not need to look up the fact that Karachi lacks political ownership, the kind of leadership which smoothens the differences and makes diversity an advantage for the city. The current struggles between federal, provincial and local governments intertwined with the Pakistani establishment’s influence over everything is only a continuation of the same pattern over the last 3-4 decades. And there is no end in sight to the quagmire.
What is more surprising is the lack of ownership shown by the business community in Karachi. Pakistan’s biggest local businesses are either based in Karachi or have a large presence here. The Memons, the Chiniotis, the Dehli walas are just some of the big business communities whose home base is Karachi. The multinationals with their head offices have diverse interests – from chemicals and pharmaceuticals to automotive and consumer goods – representing dozens of countries. The financial markets with the stock exchange, bank head-quarters and the most important financial sector regulator – the State Bank of Pakistan, are all based in Karachi.
Collectively, these local and international organizations run some of the biggest businesses, employ the most people and have the biggest influence on economic and financial policy making in Pakistan at a broader level.
Even industrial associations such as FPCCI, KCCI, OICCI, PBC, ABC and many more are all based in Karachi and have a large pool of influential individuals within their ranks.
With all this business and financial power behind it what are we to make of Karachi’s continual deterioration? The only logical conclusion one can draw is that those based here have no interest beyond their own selves. As long as their own businesses continue to operate and prosper, they are least bothered with the conditions of the roads, public utilities and general infrastructure of the city.
A simple drive through some of Karachi’s “posh” localities proves the point. You will see these localities with palatial homes worth millions of dollars whose road fronts would be full of potholes, with overflowing and open gutters and mountains of trash heaped on open plots next door.
A way forward
If there is a way out for Karachi, it is for the business community of the city to come together on a common agenda to stop the deterioration and work to improve the quality of life for its citizens. Instead of blaming the government at all levels, it is time to take ownership and engage in collective action with the specific goals like improving mass transport, water and sanitation, public utilities, environment and air pollution, quality and conditions of labor, health services and many other aspects of life.
Let the industrial bodies mentioned above form a “Rebuild Karachi” platform and let prominent and influential businessmen lead the initiative. Let them come on the media and instead of commenting upon macro-economic policies about which they know little, let them speak about the ground realities of Karachi and present solutions which they can initiate and progress.
No government would discourage financial and managerial participation by citizens who are the biggest stakeholders in this city. If the Karachi business community was to do this, it will not be unique. It will only be joining businesses around the world who support local and state governments to build city infrastructure and contribute in creating a good quality life for their communities. We do not have to look far, even within Pakistan, Sialkot chamber of commerce and the export industry based in Sialkot are known to have played a significant role in financing and managing infrastructure development projects for Sialkot city.
Naturally, the primary responsibility for developing Karachi will always be with the provincial and local administrations. But the situation in the city, with fragmented power sharing and unclear administrative lines split between many entities, what’s required is a strong and a leading role from the business community.
Take for example the issue of the 2017 population census which both the MQM and the PPP are protesting against (for different political compulsions) and for good reason. It is counter intuitive that despite massive rural to urban population shift which has impacted Sindh more than any other province in the last 4 decades, the ratio of population between provinces has not changed from the 80’s. If this is amongst the reasons being given for the census numbers to be inaccurate, it is a significant issue which needs to be addressed. Such errors cannot be ignored since the wrong math works against the effected populations in a drastic way and for a long time. Pakistan is supposed to have a population census every ten years but we have not been fulfilling this constitutional requirement and the 2017 version occurred after a gap of nearly 20 years!
Could this be where the business community starts taking ownership? One hopes this would be the beginning of the process. What about the shifting of the PIA head office? In some bizarre way, the management of the national airline is making us believe that they can fix the problems of the airline by shifting its head office to Islamabad. It’s a bit like solving the country’s problems by shifting the capital to Islamabad. We solved everything with that – didn’t we?!
Nations which don’t learn from history can never progress and I am afraid we are consistently following that path. Will the business community raise their voice for the PIA situation? It is not just jobs which are at stake. Airlines need to be located at business hubs from where there is maximum passenger traffic. It’s like Emirates moving its head office to Sharjah or British Air moving to Leeds. Does that make any sense?
I urge the business community of Karachi to come forward and stop the rot. They must think and act wisely by taking ownership of the city. The downward slide impacts businesses and unless there is collective responsibility, adverse economic circumstances will unfold even more so than before.
This article was published in Profit for Pakistan today and can be accessed on the following link;