ISLAMABAD: Planning and managing urbanisation are critical for Pakistan to optimise socioeconomic development, says the Asian Development Bank (ADB).
The bank in its latest report, “Pakistan National Urban Assessment Pivoting Toward Sustainable Urbanization,” stated that Pakistan’s population and urbanisation challenges are increasing.
The high-speed growth of Pakistan’s urban population has led to a commensurate and hazardous urban sprawl.
The growth of illegal developments and informal settlements that do not comply with planning rules or building codes delivers substandard living conditions, disrupts city functions, and degrades the urban environment. The associated encroachment into agricultural lands erodes future food security.
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With these mounting challenges of urbanisation, Pakistan needs to direct greater policy, planning, and investment support to transform its cities into safe, resilient, and livable spaces, as well as economic powerhouses that provide better income, education, and livelihood opportunities.
The report noted that recent projections place the country’s population at over 400 million by 2050, with Pakistan one of only eight countries likely to account for more than half of the world population increases until 2050. The pressure on cities mired in ever-increasing deficits in urban infrastructure and services will intensify, with urban population projected to climb to 99.4 million, or 40.7 percent of the country’s total, in 2030.
There are concerns that Pakistan’s urban population has been underestimated. Since the 1981 census, Pakistan has defined urban and rural areas based on administrative boundaries, ignoring expansions and fast growing peri-urban areas. This has resulted in a continued underestimation of the urban population.
The unaccounted-for and hidden urbanisation has impeded thorough analysis of the associated issues and due consideration of the opportunities arising from urbanization. Adjusting for this underestimation will allow urban development and planning to respond to the actual and emerging urbanisation challenges. Urbanisation trends in Pakistan concentrate the demographic pressure in a few major cities. As Pakistan’s urbanisation escalated so has the trend toward the concentration of the urban population in the larger urban centers.
In each of the provinces, the capital cities hold a disproportionately large share of the provincial urban population, concentrating both the political and administrative pressures of urbanization. Implementation of the economic adjustment program is crucial for restoring macroeconomic stability and economic growth.
The report noted that Pakistan’s GDP growth is projected to recover modestly to 1.9 percent in fiscal year 2024, with inflation easing to 25 percent amid significant downside risks, including global price shocks and slower global growth. These near-term growth prospects are closely tied to the successful implementation of the economic adjustment program supported by the International Monetary Fund and other bilateral and multilateral development partners.
With a focus on fiscal discipline, a market-determined exchange rate, reforms in the energy sector and state-owned enterprises, expanded social and development spending, and related governance and institutional reforms, the economic adjustment program aims to stabilize the economy and rebuild fiscal and external buffers.
The rising dominance of the industry and services sectors in Pakistan’s major cities fuels the engines of economic development. While agriculture remains the biggest source of employment at the national level, services, followed by industry, are the biggest sources of employment in all major cities.
In 2018, the cities generated 55 percent of the country’s GDP, with the 10 major cities accounting for 95 percent of the federal tax revenue. Karachi alone contributed 12 percent–15 percent of the national GDP and 55 percent of the federal tax revenue in 2018.
The institutional framework for urban governance has been complicated by partial devolution. In 2010, the 18th Amendment to the Constitution of Pakistan mandated the devolution of powers from the federal to the provincial governments and required the provinces to further devolve fiscal, political, and administrative authority to the local governments through Article 140-A.
Partial implementation of provincial local government acts (LGAs) has given rise to a complex urban governance model, characterised by the involvement of multiple stakeholders in urban planning, land management, and municipal services, with unclear mandates, overlapping functions, and competing interests.
In the absence of the transfer of adequate funds or functionaries to local governments, the devolution of functions has created a system where neither the provinces nor local governments can deliver and efficiently manage urban services. Multiple mutually exclusive governance structures militate against the clear assignment of liability for municipal service failures.
The differing approaches to devolution by provinces will impact urbanization. The absence of a nationally informed approach to urbanization has resulted in a patchwork of trial-and error approaches. Poor cost-recovery by publicly owned utilities has increased the reliance on government subsidies, resulting in a build–neglect–rebuild cycle of service delivery. Pakistan will have the highest projected GDP loss from climate change in the South Asia and Southwest Asia regions, reaching 9.1 percent annually under the worst-case climate scenario.
Copyright Business Recorder, 2024
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