Economic revival and Karachi
May 02, 2001
Theme song of the military regime is to turnaround the economy. An oft-recognised and oft-ignored condition for doing that is to normalise Karachi and set it on a growth trajectory. Indeed, the two propositions are linked in myriad ways. For one thing Karachi still houses some 50 percent of all the larger industrial units, besides being the economic, financial and trade capital of Pakistan; it is the only port and thus in a manner of speaking is its economic jugular. Unless Karachi is prospering and progressing, the rest of the country cannot do the same.
Karachi has been unfortunate. General Ayub Khan shifted the capital from here for strictly political reasons after he noted that Karachiites are more politically aware and can vigorously protest. After that began a long era of malevolent neglect of this city in the matter of releasing funds for its civic infrastructure. No urban project in the city was ever completed in time - for the uniform reason of funds not being disbursed in time. While the Centre has always controlled the purse, it has been strangely reluctant to actually release the funds; it was always tardy and somewhat ill-disposed towards Karachi.
Meantime one growth in Karachi has gone on unchecked: its numbers have not so much grown as have exploded. Natural population growth could not have been more than 3 percent, if that. But net immigration from upcountry of youngmen in search of jobs has made it a mega city that has grown at the rate of 6 percent. It is remarkable that the city's experience of the Centre has been one of a greedy mistress of the hen that laid golden eggs who just about manages to resist the temptation to slit open its stomach. This city provides anywhere near 65 to 70 percent of all revenues to Islamabad but does not get what is vital to keep a big city going. The whole world knows that water has been scarce for citizens of this city since 1950s. It has no mass transit system but has over a million private cars and half as many motorcycles. Everything is in short supply: schools, colleges, universities, polytechnics, hospitals, playing grounds, parks and facilities for any kind of entertainment. Affordable houses have been perennially short; nearly 50 percent of all citizens live without a pukka roof. Sewerage system broke down some years ago; it is now trying to vigorously spread disease.
As for electricity, the less said the better. If only the Finance Ministry releases the figures of how much of its profits has KESC so far deposited with it, year after year (until well into 1970s) with the cumulative totals of what it has invested - till 2000 - it will be instructive. Those who managed it, the Wapda, have never run it like a company that can think of tomorrow when its generating units and distribution systems will need replacement. Ordinary companies build up depreciation and Reserve Funds for the purpose. But KESC never thought of it. Why? The KESC is one of world's most inefficient and corrupt organisations that has the gall to declare that it has no money to buy furnace oil. It will, therefore, resort to load shedding - a phenomenon that citizens of Tokyo, London, New York, Beijing or any other big city have never experienced. Currently the Army-managed KESC is resorting to 4 to 5 hours daily power outages these days with no explanation or realistic hope of improvement. When it does provide the current, it cannot keep its voltage steady.
Citizens are not supposed to get these amenities free. They pay through their noses. Utility bills have kept on climbing while efficiency or quantum of services has continued to decline. Angered by over 20 inefficient amenity providing agencies, all controlled by the central bureaucracy or the provincial Chief Secretary - there being no difference between the two - people of the metropolis have become politically volatile. They have tended to prefer extremists. A few senior bureaucrats have done good work in writing voluminous reports on why Karachiites are unhappy and tend to excesses, including falling prey to depression and related disease. But these reports have been gathering dust on the shelves, mostly unread by anyone of political consequence.
While Karachi went on going downhill, politics of the country has remained hostage to Army officers' mood. They seized power actually in the earlier half of 1950s, the only respite they have given to people with democratic ideas and notions of holding the rulers accountable for their actions and policies were two interregnums: between 1972 and 1977 and between 1988 to 1999. Not that Army was not in control of vital policies in these eras of civilian rule. For the rest, it has been one long generals' night. Economy has been grossly mismanaged; little net development has taken place in recent decades; society has become more unequal and authoritarian; unemployment, poverty and diseases have been growing more steadily than education has spread; and, above all foreign debts have mounted to an extent that the rest of the world calls Pakistan a failed, or at best failing, state.
Karachi experiences the joys and sorrows of a failing state most. Central authorities hate to recognise facts, especially when they are politically painful. People in Balochistan became alienated after 1973-77 military operations. They have stayed alienated since. After 1979 hanging of ZA Bhutto and brutal suppression of MRD movement in 1983, it was Sindh's share to be alienated. It took the form of an exceptionally severe crime wave. Karachi's political evolution, in tandem with the state of its infrastructure and paucity of employment opportunities, reflects the noxious nature of the fruit grown in a poisoned soil. It is the penultimate price of near total disfranchisement of a relatively more aware people.
It is time people in authority, especially military officers, realised that the long spells of military rule - preoccupied with problems of national security in the context of ties with the US and Kashmir dispute and moved by megalomaniac self-interest - have grossly mishandled the economy. It is now unviable: it is unable to pay its way through the world. Inside, the hungry and unemployed can only go on being more angry and alienated. More extremist politics has therefore to be expected.
One is trying to ram just one point home: economic recovery and revival is not an esoteric process. It is brought about by a whole people who are reasonably well-adjusted, self-confident and anxious to make good. It is not the super angry or pessimistic or desperate people who can take the economy places. Politics is a necessary ingredient of economic growth. There has to be genuine self-rule to generate confidence and optimism. It is crucially important to revive genuine democracy as a precondition to sustained economic reconstruction. It is theoretically a minor condition that Karachi, the key area for economic regeneration, be made a happier and more satisfied place before it becomes an engine of growth for the rest of the economy.
Let it be repeated what a former Chairman of Karachi Chamber of Commerce said the other day: for big foreign direct investments in high-tech industries, Karachi is the place. All kinds of skills are available here rather cheaply in international terms. No foreigner will go anywhere else in Pakistan. And if the law and order situation in Karachi remains as bad as is the case today and its infrastructure - transportation, telephones, railways, sewerage, roads, water supply, electricity, education (skills), health facilities, gas, steady economic policies, entertainment facilities - stays as characterised by insufficiencies and bottlenecks, we can say good by to all the desired FDIs.
Moreover, the sine qua non of economic construction is confidence. Let us admit that after what the state did to investors and savers in May 1998 - the forfeiture of foreign currencies - confidence of Pakistanis has been totally shattered. Unless Pakistanis begin to invest, how can foreigners do so? Today even the most elementary precondition, viz, law and order, is not present in Karachi and its hinterland.
It is puerile to expect Islamabad to do everything to remove all roadblocks in Karachi. It cannot. One reason is that Islamabad is even more broke than Karachi is, the potential of which is tremendous. All it needs is a proper city government, quite like the arrangements that Paris, New York, Chicago, Tokyo, London etc have: a metropolitan government that governs, plans and regulates economic growth of the metropolis by providing or otherwise ensuring all the back up civic services. If a metropolitan government is not as autonomous as its tasks demand, it will be worse than useless. That is not the only condition. It has to be democratic in intent and effect. Central and provincial governments need not fear its robust powers and functions. Once local government powers the engines of growth, both will have more revenues rather than less. Honesty in intention is the first step on the long road to reviving the Pakistan economy through reviving both Karachi (and other big cities) and democratic impulses throughout the country.
The author is a well-known journalist and freelance columnist