Economic Capital of Pakistan

Karachi is the financial and industrial capital of Pakistan. As of 2019,

Karachi has an estimated GDP (PPP) of $164 billion.[1][2] The city accounts
about half of the total collections of the Federal Board of Revenue, out of
which, approximately half are customs duty and sales tax on imports.
[3]
 Karachi produces about 30 percent of value added in large-scale
manufacturing,[4] 25% of the GDP,[5] the World Bank identified Karachi as
the most business-friendly city in Pakistan.[6] In 2010, research by the
global human resources company Mercer found Karachi to be the most
inexpensive city in the world.[7]

GDP
A substantial chunk of Sindh’s GDP, around 95% is attributed to Karachi [9]
[10]
 (the GDP of Sindh as a percentage of Pakistan’s total GDP has
traditionally hovered around 25%/30%).[9][10][11][12] Karachi’s GDP was
estimate in 2015 to be around 25% of the total GDP of Pakistan. As of 2014,
it was reported as $114 billion.[13] A PricewaterhouseCoopers study released
in 2009, which surveyed the 2008 GDP of the top cities in the world,
calculated Karachi’s GDP (PPP) to be $75 billion (projected to be $193
billion in 2025 at a growth rate of 5.5%). It confirmed Karachi’s status as
Pakistan’s largest economy, well ahead of the next two biggest
cities Lahore and Faisalabad, which had a reported GDP (PPP) in 2008 of
$40 billion and $20.5 billion, respectively.[14] Karachi's high GDP is based
on its large industrial base, with a high dependency also on the financial
services sector. Textiles, cement, steel, heavy machinery, chemicals, food,
banking and insurance are the major industrial sectors contributing to
Karachi's GDP.
 Revenue collection
In line with its status as a major port and the country's largest metropolis,
it accounts for most of Pakistan's revenue generation. According to the
Pakistan Federal Board of Revenue's 2006-2007 year-book, tax and
customs units in Karachi were responsible for 70.75% of direct taxes,
33.65% of federal excise tax, and 23.38% of domestic sales tax. [3] Karachi
also accounts for 75.14% of customs duty and 79% of sales tax on imports.
[3]
 Therefore, Karachi collects a significant 53.38% of the total collections of
the Federal Board of Revenue, out of which 53.33% are customs duty and
sales tax on imports.[3] Revenue collected from Karachi includes revenue
from some other areas since the Large Tax Unit (LTU) Karachi and
Regional Tax Offices (RTOs) Karachi, Hyderabad, Sukkur and Quetta cover
the entire province of Sindh and Baluchistan.[3] Karachi's contribution to
national revenue is around 55%.

Business districts
I. I. Chundrigar Road (formerly McLeod Road), also known as the Wall
Street of the city, remains the historical commercial hub of Karachi and is
its main CBD. However over the years, notable business and trade activity
has appeared in other conurbations of the city, including the Shahrah-e-
Faisal thoroughfare, MT Khan road, Mai Kolachi road and the Clifton and
Defence areas of the city.

IT trends
The recent trend of ICT (information and communications
technology), electronic media and call centres has become a significant part
of Karachi business hierarchy. Call centres for foreign companies have been
targeted as a significant area of growth, with the government making efforts
to reduce taxes by as much as 80 percent in order to gain foreign
investments in the IT sector.
Even Dr. Arif Alvi, President of Pakistan, has launched an initiative to help
promote education, research and business opportunities in Artificial
Intelligence, Blockchain, and Cloud-based computing which will educate IT
technology to 10,000 students annually.

Karachi has more than 3000 Software Companies and growing day by day
which accounts to almost half of the whole countries IT Industry.

Media

The city has also firmly established itself as the electronic media capital of
the country; most of Pakistan's media television channels are
headquartered here, including Abbtakk News, CNBC Pakistan, Dawn
News, TV One, Indus Media Group, ARY Digital, BOL Network, AAJ
TV, KTN NEWS, KTN, KASHISH TV and Geo TV. They generate huge
revenues for the city in advertising and provide jobs and entertainment. As
a sign of the growing strength of the electronic media sector, GEO TV is
planning to start an additional 10 channels and for this purpose is setting
up a 50-acre (200,000 m2) studio in the city.

Pakistan Stock Exchange

Pakistan Stock Exchange, formerly Karachi Stock Exchange is Pakistan's
largest and oldest stock exchange with at least 540 companies listed during
2020.
It was declared the “Best Performing Stock Market of the World for the year
2002” with KSE-100 returning 112.2%.[15]
According to Bloomberg, Pakistan ranked third in 2014. And for the third
consecutive year was among top 10 markets in the world (Source).
International magazine "Business Week" declared KSE as one of the Best
Performing Markets of the world. Similarly, the US newspaper "USA
Today" termed Karachi Stock Exchange as one of the best performing
bourses in the world.
By September, 2020, the year of global crisis and recession, PSX-100 was
leading the global markets in correction with a return at 38.5% making
PSX the best performer in Asia and fourth-best performing stock market in
the world.[16]

Industry

There are many cottage industries in the city as well. Karachi is also known
as software outsourcing hub of Pakistan. It has a rapidly flourishing 'Free
Zone' with an annual growth rate of nearly 6.5 percent. An expo center has
also been set up in Karachi, which hosts many regional and international
exhibitions including the IDEAS Defence Exhibition. [1] Dozens of new
manufacturing units are also being built near the Pakistan Steel Mill. Farm
businesses line the SuperHighway route. The Sindh Industrial Trading
Estate (SITE) in Manghopir is the biggest industrial area of Pakistan. Other
industrial zones are located in Landhi, Korangi, FB Area, North Karachi
and Port Qasim.
Karachi is also home of major automobile manufacturing
companies. Toyota is in the process of increasing production capacity to
over 120,000 units per annum. Suzuki Motor Company is also located in
Karachi. The manufacturing plant located in Bin Qasim has a production
capacity of 150,000 vehicles per year. Among others, Millat
Tractors, Daihatsu, HinoPak Buses and Trucks manufacturing plants are
also located in Karachi. The now-defunct Adam Motor Company was
formerly located in the city.
Work is being done to promote the development of higher value added
textile products, most notably by Ayesha Tammy Haq, an attorney who also
has a television talk show. She set up Pakistan Fashion Week, a showcase
for Pakistan's emerging fashion industry.
The industrial estates in Karachi.
Name of Estate Location Established Area in Acres

SITE Karachi SITE Town 1947 4700[17]

Korangi Industrial Area Korangi Town 1960 8500[18]

Landhi Industrial Area Landhi Town 1949 11000[19]

North Karachi Industrial Area New Karachi Town 1974 725[20]

Federal B Industrial Area Gulberg Town 1987 [21]

Korangi Creek Industrial Park Korangi Creek Cantonment 250[22]

Bin Qasim Industrial Zone Bin Qasim Town 1970 25000[23]

Karachi Export Processing Zone Landhi Town 1980[24] 315[25]

Pakistan Textile City Bin Qasim Town 2004 1250[26]

West Wharf Industrial Area Keamari Town 430[27]

SITE Super Highway Phase-I Super Highway 1983 300[28]

SITE Super Highway Phase-II Super Highway 1992 1000[28]

Banking sector
Karachi is the hub for Pakistan's banking and financial services sector and
is home to Pakistan's Central Bank, the State Bank of Pakistan.
Nearly all banks that operate in Pakistan have their corporate headquarters
in the city. These include:

 Arif Habib Limited

 Atlas Bank[29]
 Bank AL Habib
 Bank Alfalah
 Barclays Pakistan[30]
 Faysal Bank, Karachi[31]
 Habib Bank
 Habib Metropolitan Bank
 HSBC Ltd, Karachi
 JS Bank
 KASB Bank
 MCB Bank Limited (formerly Muslim Commercial Bank)
 MyBank
 NIB Bank
 SAMBA Bank Limited
 Silkbank Limited
 Soneri Bank
 RBS Pakistan[32]
 The Bank of Tokyo-Mitsubishi UFJ Limited
 United Bank Limited

Trade Logistics
Despite the growth and development of transport infrastructure elsewhere
in the country, Karachi remains the country's transport hub. The city's two
ports, Port of Karachi (Pakistan's largest) and Port Qasim, are central to
nearly all shipping in Pakistan. The airport of Karachi, Jinnah International
Airport (also known as Quaid-e-Azam International Airport) is the largest
and busiest airport in Pakistan and handles 6 million passengers a year.
The airport also receives the largest number of foreign airlines; a total of 27
airlines fly to Jinnah International, predominantly from the Middle East
and South East Asia. All of Pakistan's airlines use Karachi as their primary
hub, including Pakistan International Airlines, Aero Asia
International and Airblue.

Fisheries

Karachi is the biggest fishery hub in Pakistan. Fisheries play an important

role in Karachi's economy. They provide employment to about 300,000
fishermen directly. In addition, another 400,000 people are employed in
ancillary industries. It is also a major source of export earning. The Karachi
Fish Harbour and Korangi Fish Harbour are two major fish harbours in
Karachi. Fish are one of Karachi's main exports.

Challenges
Karachi is allegedly the worst affected by controversial population census
'17 placing it at 14.91 million, whereas all estimates and reality checks point
above 30 million. [33] With about 1100km2 of city proper, the population
density would stand beyond 30,000 per km2, thereby ranking it at least 6th
most dense city proper. The courts have been moved on the matter of 5%
census audit. As of Q1-2021, even 2017 census is not published due to
controversies and litigation.
That alone causes a spread of issues branching from flawed allocation of
funds and representation in Parliament to housing, to mass transit, to
environment and just about every facet of life in urban and suburbs.
Beyond that the city faces governance crisis bound by provisions of 18th
Amendment in Constitution of Pakistan, giving all local body formation
powers in hand of Province, with absolutely no room for intervention by
federation; Rendering it a provincial dictatorship. Sindh Local Government
Act 2013, thereby took away major municipal authorizations from Karachi
Metropolitan Corporation under Mayor's Office, including planning and
development, building control, solid waste management, water supply,
sewerage and the like.
Beyond centralizing powers, the city, formerly a district, was declared a
division, towns abolished in favor of independent districts, the count
standing at 7 as of September 2020. This, along with presence of 6
cantonment boards covering allegedly at least 60% of city, introduced a
divide in city's management and thence centralizing the co-ordination in
hands of provincially administered bodies; [34] The damage of which was
evident from chaos prevailing after August 2020 record rains and urban
floods bringing commercial activity and peace to a halt, killing over a 100
and displacing thousands. [35]

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