Building economic resilience in Pakistani cities

Pakistan must shift focus from land investments to knowledge-based services for sustainable growth.

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The 12th session of the World Urban Forum took place in Cairo from 4 to 8 November 2024 focusing on local actions for sustainable cities and communities around the world. Several sub-themes, such as rising living cost, unaffordable housing, lack of basic services, climate change and regional conflicts, were discussed. Speakers from 70 countries, including cabinet ministers, city mayors and senior urban managers, came together to present the future urban visions of their respective cities and countries. Can Pakistan present a competitive urban vision on such a platform? And what urban values can Pakistan showcase internationally? The answers to both questions revolve around the notion of urban sustainability which directly depends on cities' abilities to promote macroeconomic resilience both in the short and long run.

In August 2024, ADB released a report 'Pakistan National Urban Assessment: pivoting toward sustainable urbanization' which notes Pakistan is at a critical urban juncture. Urban agglomeration, which could act as driver of economic and social development, is challenged by such factors as declining quality of life, failing public services and flagging economic productivity. Unbridled smog in big cities like Lahore has further dragged the quality of life to the lowest ebb. Under such challenges, building economic resilience in Pakistani cities is technically a complex task.

Economic resilience is all about cities' abilities to cope, recover and reconstruct after economic shocks. It is because cities are primarily factories of urban creativity where past, present and future practices meet defining their socioeconomic perception. The concept of resilient cities is associated with the notion of territory which is a repository of cultural memories of generations that have lived there and left their economic and cultural imprints. This suggests that the economic evolution of cities remains a distinguished treasure of business practices, trade, knowledge, social values, art, culture and right use of resources. Cities, as factories of urban creativity, therefore, either start contributing to the exponential growth of GDP or restrict it at all. These factories contribute to economic growth and GDP only when cities have an anthropological relationship with humans who inherently define the socioeconomic processes following the principles of functionality, utility, harmony and beauty. In other words, these four principles define the power relations within cities where both powerful and powerless stakeholders interact. Wider debates are usually instrumental in strengthening the functionality of cities alongside creating social harmony which intrinsically shapes up urban beauty and ultimately contributes to economic growth. Lack of debate on urban issues, however, reflects that the powerful stakeholders have hijacked the cities administratively resulting in diminishing urban utility, non-functional businesses, sociocultural disharmony and ugly urban landscape. In such a case, cities start restricting economic growth as is the case with Pakistani cities today.

To develop a cogitating link between cities and economic growth, let's look into the vacillating components of GDP and their relationship with the earlier mentioned four principles. GDP is like a closed box in which monetary inflows and outflows take place. Spendings by common people and government, investments and net exports are inflowing while taxes are outflowing components. The relationship between inflowing and outflowing components is interconnected and cyclical in nature. This suggests more public spending is largely a result of functionality and utility of cities generating more taxes for the government spending. All of them together result in increasing the quantum of GDP. However, urban hijacking of Pakistani cities by the powerful has shifted the basic business focus from entrepreneurship to investments in immovable resources such as urban lands.

The management of urban lands in Pakistani cities could be developed as a case study to discursively understand imbalanced power relations between the powerful and powerless stakeholders of cities. The urban lands of almost all major cities of Pakistan have been seized by the powerful housing societies whose basic expertise is to maintain economic status quo. Wider economic development, benefitting common people, simply doesn't suit them. As a result, all major cities of Pakistan have started restricting economic growth because of social disharmony and lesser functionality of businesses. Imbalanced power relations have created economic disequilibria thus curtailing the quantum of consumer and government spending and investment. Consequently, imbalanced inflowing and outflowing components of GDP are further aggravating the power relations among various urban stakeholders.

Imbalanced power relations adversely affect territorial value creation processes as well. If Pakistani cities want to act as engines of economic growth, they will have to encourage public debates on various urban issues. The sustainability of urban functionality and utility is dependent on the principles of cooperation, value co-creation and wealth generation. Urban wealth can only be generated when corresponding territories could act as genius loci, a soul and an identity. This way the traditional focus of Pakistani cities will deviate from real estate businesses to knowledge-intensive service businesses (KISB) and manufacturing sector.

Economic development is all about perception of cities and urban centres. Pakistan needs to get rid of parochial interpretations of administrative and legal rules and regulations. The country will have to devise micro level urban processes capable of addressing the issues faced by the deprived strata of society. Shifting the focus from investments in land development to KISB can practically empower women as well. Liberating hijacked cities of Pakistan from redundant rules and regulations, powerful mafias and business status quo created by real estate businesses needs to be the top priority.

In summary, all stakeholders such as households, businesses, companies and individuals will have to be part of a wider debate on how businesses can be promoted in their respective cities. For this purpose, a thematic questionnaire could be developed and feedback sought from the stakeholders. The real challenge is to honestly transform the feedback into policy themes. Only honestly drafted policy themes can help boost urban synergies in cities capable of kick-starting sustainable economic growth. Dictatorial policy practices must be curbed immediately. Cities are meant for the people and only people can transform them into engines of economic growth and economically resilient urban centres.