Proper urbanisation can yield economic benefits for Pakistan

ISLAMABAD: Urbanisation provides Pakistan with the potential to transform its economy to join the ranks of richer nations, but the country, like others in South Asia, has so far struggled to make the most of that opportunity, says a new World Bank report.

Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity and Liveability was presented at the third Pakistan Urban Forum.

Difficulty in dealing with the pressures that increased urban populations put on infrastructure, basic services, land, housing and the environment has fostered what the report calls “messy and hidden” urbanization in Pakistan and throughout the region.

This, in turn, has helped to constrain Pakistan’s full realisation of the prosperity and liveability benefits of urbanization.

“Properly managed urbanization can enhance both the prosperity and liveability of cities,” says, Peter Ellis, Lead Urban Economist at the World Bank.

“This is certainly the case for Pakistan, which is the most urbanised large country in South Asia and derives so much of its economic growth from cities”,
he added.

Estimates indicate that cities generate up to 78 percent of Pakistan’s gross domestic product and the government’s Vision 2025 places a premium on urban job growth.

Planning ahead for urban growth can help create vibrant and productive cities that fuel the country’s growth, but that will require dealing with the problems posed by the country’s messy and hidden urbanization to date.

Messy urbanization in Pakistan is reflected in the existence of low-density sprawl and the fact that cities are growing outward beyond administrative boundaries, creating challenges for planning, transportation and the provision of public services.

Hidden urbanization, the report said, stems from official national statistics understating the share of the population living in areas with urban traits.

Officially, 36 percent of Pakistanis lived in urban settlements in 2010 but the World Bank estimates that the actual share of the population living in areas with urban characteristics may be as high as 55 percent.

Acknowledging the true extent of urban areas can help to facilitate better planning and metropolitan management.

Failure to address these problems can make cities less liveable. Pakistan faced an urban housing shortage of approximately 4.4 million units in 2010.

The 2015 liveability index of the Economist Intelligence Unit ranked Karachi 135th out of 140 cities; Dhaka was the only major city in South Asia with a lower ranking.

The Lahore agglomeration, for example, expanded to absorb those of Chiniot, Gujranwala, Gujrat, Lalamusa and Sialkot.

In fact, the Lahore agglomeration meets its Delhi equivalent to form one continuously lit belt with an estimated population of 73.4 million, slightly less than the population of Turkey.

“Taking steps to help Pakistan’s cities to realize their potential is critical as the country’s urban population is expected to increase by approximately 40 million people to an estimated 118 million by 2030,” says Patchamuthu Ilangovan, World Bank Country Director for Pakistan.

“The concentration of economic activity that accompanies such agglomerations improves productivity and spurs job creation – if the pressures posed by urbanization are properly addressed.”

To better tap into the economic potential that urbanisation offers, the World Bank report said policymakers in Pakistan and the rest of South Asia should consider actions at two levels – the institutional level and the policy level.

At the institutional level, Pakistan would benefit from improvements in the ways in which towns and cities are governed and financed. Specifically, the report said reform is required to address three fundamental urban governance deficits – in empowerment, resources and accountability.



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