The city needs a truly representative, empowered and integrated local government with a writ over cantonment boards. The Rs1.1 trillion package announced for its transformation is not feasible as it would require a dramatic diversion of development funds both at the federal and provincial level towards Karachi.
This was stated by former federal finance minister Dr Hafiz A. Pasha while speaking at a seminar held at the PMA House on Friday.
Titled ‘Economic revival of Karachi — the way forward’, the event was organised by the Karachi Citizens’ Forum (KCF).
Dr Pasha was of the opinion that if the federal and provincial governments were short of funds for Karachi, the issue could be addressed by floating accredited municipal bonds.
“I am pretty sure that the private sector would readily come forward as it realises that development of the city’s infrastructure would strengthen trade and business activities in Karachi,” he said, adding that Karachi should have a two-tier government, one at the local level and the other looking after the whole city.
He also suggested that the city would have sufficient funds for development if it was allowed to collect property tax.
Hafiz Pasha calls for floating municipal bonds to overcome fund shortage
“Right now, a mere Rs2bn is collected on account of property tax that speaks well of the rampant corruption plaguing the excise and taxation department,” he said, emphasizing that the provincial finance commission should be constituted and awarded to ensure equal distribution of funds at the grass-root level.
‘The goose that lays golden eggs’
Earlier, Dr Pasha talked about Karachi’s contribution to the country’s economy over the decades while praising the industrialists for their continued commitment and dedication.
Karachi, he said, was (still) the most productive city with 25 per cent share in the manufacturing industry and 50pc share in the country’s exports. Its contribution in the national tax revenue and domestic revenue, he pointed out, was 60pc and 46pc, respectively.
“Unfortunately, however, the city gets very little in return. It has been in a dismal state for a long time with no investment in its civic infrastructure. It’s time that the goose that lays golden eggs is no longer taken for granted. Nobody is asking for a favour, though,” he said.
Explaining why the Karachi Transformation Package couldn’t be successfully implemented and the federal and the provincial governments would fail to provide committed funds, he suggested that the government should focus on three critical areas of investments — provision of safe water, an efficient mass transit system and development of katchi abadis.
To a question, Dr Pasha said the number of idle youth — who were neither employed nor studying — was about 21 million in the country.
Of them, 1.6m youth were in Karachi alone. The young people were waiting for an opportunity to be productive, but at the same time very vulnerable to be exploited by criminal elements.
‘Karachi lacks ownership’
Highlighting the problems industrial sector faced in the city, Shaikh Sultan Rehman of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said Karachi lacked a sense of ownership, though it contributed Rs164 billion to the GDP and had a 30pc share in the manufacturing of value-added products in the country.
“There is a serious crisis. The industry has to purchase water, lacks a system for safe disposal of waste, besides facing frequent gas and electricity shortages.
“The government had approved five projects of $12bn for waste treatment but none could see the light of day. The absence of an efficient transport system and disparity in industrial land and zone management is an impediment,” he added.
He regretted that nothing was being done either by the federal government or the provincial government while they continuously engaged in a blame game.
Voicing similar concerns, Abdul Hadi heading the SITE Association said industrialists being the largest taxpayers in the country had become hostages of this reality as the government pressured them to pay more tax in an attempt to enhance its tax base.
“The roads have deteriorated to such an extent in the SITE industrial area that transporters have refused to carry consignments from there. The area receives less than 1MGD water from the Karachi Water and Sewerage Board against our requirement of 50MGD,” he said.
Acute shortages of water and gas, he said, had forced industrialists to rely on subsoil water, furnace oil and coal that had a negative impact on the equipment.
“In short, we are no longer competitive in the region. The governments at the federal and provincial levels haven’t done anything so far,” he said.
Dr Qaiser Sajjad and Nargis Rahman of the KCF also spoke.