Pakistan's urban policy: Turning cities into slums

If you have lived in a middle-class neighbourhood in a large city in Pakistan, you probably grew up deprived of what urban living offers elsewhere: quality education, entertainment, hope, and opportunities.

What you know is chaos, congestion, religious zeal, violence, and a stifling sense of entrapment. No wonder millions of Pakistani youth have one goal: "Pakistan se zinda bhaag" (escape from Pakistan while you are still alive).

But this need not be the case. Cities in Pakistan could be transformed to become engines of economic growth.

However, this would remain a dream as long as urban economic development stays on the back-burner of Pakistan's economic policymaking.

For the nation's economic fortunes to turn, urban economic development has to be at the forefront of economic policymaking, which in the past has focused exclusively on agriculture and manufacturing, and more recently on remittances.

Pakistan's economists, too, have ignored the subject of urban economic growth.

Hundreds, if not thousands, of academic papers have been generated that offer a tiny variation on the time-series models that focus on the macroeconomics of Pakistan's debt-ridden economy.

That is why having one of the nation's preeminent economists, Dr Nadeem ul Haque, focus on urban economies is a rare but welcome event.

In a recent PIDE (Pakistan Institute of Development Economics) working paper, Dr Haque makes a strong case for developing cities to their potential to trigger economic growth.

He identifies several shortcomings that have prevented urban economies from reaching their potential in Pakistan.

I would submit that similar shortcomings have been prevalent in North America and Europe, where hundreds of bustling metropolis developed and thrived.

It is, therefore, important to understand the unique failures of policy and social order that have kept Pakistan's urban centres in a state of despair.

Dr Haque laments the paucity of urban research in Pakistan.

But this is also true for North America. The celebrated economics departments in North American universities often boast little more than a token urban economist.

Departments with two urban-focused academics claim to offer an ‘urban' specialisation!

Compare research in macroeconomics, which is being produced with industrial efficiency, to research in urban economics, which is few and far between in the West.

Alternatively, compare the number of books published with macroeconomics in their title to those highlighting urban economics on the cover page.

Based on the sales volume, the bestselling urban economics title on Amazon.com is ranked 187,207. In comparison, the text on macroeconomics is ranked much higher at 1,431.

The dominance of small builders is a common trait too.

Dr Haque highlights that unlike North America, where large builders mass-produce housing, residential development is largely done by individual households or small-sized developers in Pakistan.

While it is true that large builders and land developers are uncommon in Pakistan, the housebuilding industry in North America is also dominated by a large number of small builders.

Michael Buzzelli, who is currently a professor of Geography at the Western University, studied the structure of house-building firms in North America.

Dr Buzzelli and I were contemporaries and focused on the supply side of housing equation for our doctoral dissertations. Dr Buzzelli's findings are quite revealing.

His research showed that the house-building industry "continued to be the preserve of small firms, when over 85 per cent of all builders constructed no more than 25 units each."

He further noted that roughly one-third of small builders constructed just one house a year.

The other not so commonly known fact about large home-builders in North America is that they are considered large not because of their size, but because of the number of housing units they produce under their brand.

Essentially, large builders are agglomerates of a large number of small builders and trades who are individually incorporated businesses that collaborate to produce a large number of housing units under the same brand.

What we need is a better definition of the term 'urban'.

The other key limitation of urban policymaking in Pakistan is how one may define 'urban'.

The government uses arbitrary administrative boundaries to define what is urban and what is not. Some researchers have argued that Pakistan is more urban than what the official statistics show.

Dr Haque quotes research which claims that almost 70 per cent of Pakistan is either urban or urbanising.

This is rather exaggerated and it complicates further the task of reforming urban economies.

He quotes unpublished work from South Asia Institute at Harvard University that shows 39.7 per cent of Punjab's population to be urban and an additional 33.2 per cent urbanising.

Almost 40 per cent of Sindh's population is estimated to be urban with an additional 19.4 per cent urbanising. The devil, however, is in the detail.