Leveraging CPEC Karachi

Dr Nadeem Javaid
Chief Economist, Government of Pakistan
 Sequence of talk
① CPEC

② Census 1951-2017

③ City Competitiveness

④ Leveraging Karachi, Way Forward !!!

 CPEC Cooperation Fields
China Pakistan Economic Corridor Long Term
Plan :
Timeframe 2014 – 2030
Components:
I. Energy (Coal, Hydel, Wind, Solar, LNG , Transmission)
II. Infrastructure (Road, Rail, Aviation, Data connectivity)
III. Gwadar Port (Socio-economic development)
IV. Industrial Cooperation (Gwadar Free Zone and other
industrial parks to be finalized)
Framework:
Joint Cooperation Committee supported by 5 Joint Working
Groups is steering the program.
Development Targets
1st Target（2020）: Period of market
cultivation. To develop commercial
logistics and other industries with
local resources.

2nd Target （ 2025 ） : Period of

expansion and development.
Processing and manufacturing
industries will be developed.

3rd Target （ 2030 ） : Period of

Maturity. Enlarge the scale and
scope of Free Zone.
 Industrial Cooperation under CPEC
Province/Unit 9 Location for Industrial Zone (6th JCC)
KPK Rashakai Economic Zone

Sindh Dhabeji

Balochistan Bostan Industrial Zone

Punjab M-2 Sheikhupura

North Area Moqpondass, Gilgit Baltistan SEZ

Federal Area ICT Model Industrial Zone & PSM-Port Qasim

FATA Mohmand Marble City

AJK Bhimbar Industrial Zone

 Opportunities
Agriculture,
Food processing
Mines
&
Electronics, Minerals
Textiles Light Engineering,
Chemicals,
Automobiles
etc.
Energy Sector
(Oil & Gas
Construction Exploration)

6
Connectivity and Wider Economic
Benefits

Economic Corridor

Transport Corridor

7
 Population of Pakistan (in millions)
(Census 1951-2017)
207.8

170.1

132.4
108.3
84.3
65.3
42.9
33.7

1951 1961 1971 1981 1991* 1998 2010* 2017

*= estimated to fill the gap

 Population by Residence
Census (1951-2017)
17.7 22.5 25.4 28.3 32.5 36.4
Urban

82.3 77.5 74.6 71.7 67.5 63.6

Rural

1951 1961 1972 1981 1998 2017

 Top cities of Pakistan
(Census 1951-2017)
City
1951 1961 1972 1981 1998 2017
Rank
1 Karachi Karachi Karachi Karachi Karachi Karachi

2 Lahore Lahore Lahore Lahore Lahore Lahore

3 Hyderabad Hyderabad Faisalabad Faisalabad Faisalabad Faisalabad

4 Rawalpindi Lyallpur Hyderabad Rawalpindi Rawalpindi Rawalpindi

5 Multan Multan Rawalpindi Hyderabad Multan Gujranwala

6 Lyallpur Rawalpindi Multan Multan Hyderabad Peshawar

7 Sialkot Peshawar Gujranwala Gujranwala Gujranwala Multan

8 Peshawar Gujranwala Peshawar Peshawar Peshawar Hyderabad

9 Gujranwala Sialkot Sialkot Sialkot Quetta Islamabad

10 Quetta Sargodha Sargodha Sargodha Islamabad Quetta

 Population of Pakistan,
(Future Projections 2051 based on Census 2017)
450.0
416.2
400.0
391.5

350.0
326.3
300.0
In Millions

264.2
250.0

200.0 207.8
170.1
150.0
132.4
100.0 108.3
84.3
65.3
50.0 42.9
33.7
0.0
1951 1961 1971 1981 1991* 1998 2010* 2017 2027 2037 2047 2051
 Population of Pakistan,
(Future Projections 2051 based on Census 2017)
450.0
416.2
400.0
* In next 30 years population will be doubled, 391.5

350.0 Pakistan 14th largest in 1951, 7th in 1990, 6th in

326.3
300.0 2017,
In Millions

250.0
** and remain 6th till 2050 (Thanks to Nigeria) 264.2

200.0 207.8
170.1
150.0
132.4
100.0 108.3
84.3
65.3
50.0 42.9
33.7
0.0
1951 1961 1971 1981 1991* 1998 2010* 2017 2027 2037 2047 2051
 Poverty- Cost of Basic Need (Headcount)
80

70

60
% Population

50

40

30

20

10

0
1998-99 2001-02 2004-05 2005-06 2007-08 2010-11 2011-12 2013-14
National 57.9 64.3 51.7 50.4 44.1 36.8 36.3 29.5
Urban 44.5 50 37.3 36.6 32.7 26.2 22.8 18.2
Rural 63.4 70.2 58.4 57.4 49.7 42.1 43.1 35.6
GDP Growth Trend (%)

6.5
6.0
6.0

5.5 5.3

5.0
4.5
4.5
4.1
3.8 4.1
4.0 3.7
3.5

3.0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
(Target)

Data Source: PBS & Planning Commission

Emerging Middle Class

Poverty levels Consumer Market

have declined is growing

Middle Class is
Emerging
( 80 Million )

15
 Housing Units - Shortage
① Population growth, the continuing trend toward
urbanization, and rising incomes are all fueling
the increasing demand for housing.

① There is 10 Million Housing Units shortage, i.e.

further accumulating by 0.34 million units every year !!

① Formal financial sector caters only up to 2 % of all

housing transactions, the lowest ratio in the region
(10-12% is catered by Informal Sector)
 Consumer Expenditure on Housing
(% of Total Household Expenditure)

Lahore 21

Karachi 19.2

New York 23.1

Mumbai 13

Seoul 17.7

Shanghain 16.6

Shanghai 13.5
40
Dubai

0 5 10 15 20 25 30 35 40
How to cater the needs of society?
• Horizontal growth is untenable, going vertical
is the suitable option;
 Economies of Scale
 Affordability
 Short Commuting
 Facilitate Social Mobility

• Making cities competitive - developing civic

infrastructure compatible with Environment .

• Coherent town planning with a Master Plan

for City’s Development. (water, sewage, gas, electricity,
firefighting, parking, Transport nods and pedestrian-friendly)
 Cities as engine of economic
growth - Better Urban Policy
• Density : Double edge
– agglomeration economies; The benefits of
spatial concentration include the reduction of
transport costs for goods, people, and ideas.

– spatial proximity; For millennia, cities have

had to deal with the negative consequences
of density, which include contagious disease,
crime, and congestion.
 Competitive Cities Look Like
• Accelerated economic growth. The top 10 percent of cities
achieved 13.5 percent annual gross domestic product (GDP) per
capita growth, compared with 4.7 percent in an average city;

• Outstanding job growth. The top 10 percent of cities achieved 9.2

percent annual jobs growth, compared with 1.9 percent in the
remaining 90 percent.

• Increased incomes and productivity. The top 10 percent of cities

increased the average disposable income of their households by 9.8
percent annually.

• Magnets for foreign direct investment (FDI). The top 5 percent of

cities obtained as much FDI as the bottom 95 percent of cities
combined.
 Leveraging Karachi Way Forward !!!
① Finding the new land;
Intensified / Efficient
a) Damaging Agriculture
urban land use
b) Deforestation

② Karachi have to remove the barriers;

a) Regulations promoting rent-seeking
b) Over-restrictive building codes
c) Zoning laws
d) Incentivizing efficiency and innovation (an inclusive approach)

③ The construction industry needs to evolve;

a) Opaque marketplace (Informality and corruption)
b) Poor project management and design processes,
c) A lack of investment in technology, R&D, and workforce skills
Leveraging Karachi Way Forward !!!
4) Governments, (K. City) and Construction
Industry urgently need to collaborate for improving
the residents’ quality of life and ensure that
housing shortages do not become a drag on
economic growth.

5) Optimal degree of federalism/provincialism to

carve appropriate policies, and the use of
engineering and economics approaches to
reducing the negative consequences of density.
THANK YOU