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Analysis, Current affairs

What’s wrong with development in Pakistan?

Pakistan doesn’t suffer from a lack of development, but from flaws in the model of its pursuit.


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Updated: March 26, 2019

The key implicit assumption in the mainstream development theory is that urbanisation is a manifestation of a transition to ‘modernity’.

This understanding is primarily derived from the urbanisation experiences of the countries of the Global North. That is, the industrial revolution allowed European/North American economies to produce large surpluses in the agriculture sector with the introduction of new production techniques.

Thus, in the expectation of higher wages in the industry, erstwhile rural folks moved to cities. This rural-urban migration did two things: one, it ensured continuous supply of labour and second, it kept a downward pressure on wages in the industry.

As a result, the owners of industries did not only amass profits, but they were also incentivised to reinvest their capital to expand the production capabilities of their national economies.

According to mainstream neoclassical economic theory, urbanisation is a by-product of industrial development and it is pareto optimal, i.e. everyone’s a winner. Workers get higher wages, industrial capitalists accrue huge sums of profits and the agriculture sector gets modernised.

In other words, urbanisation is welfare-enhancing for all socio-economic classes in the society.

That is why in traditional economic theory, the magnitude of urbanisation is considered a good approximation of the level of development in a country.

Policy makers in Pakistan are inspired by this neoclassical account of urbanisation and they tend to assume that Pakistan is undergoing a somewhat similar urban transition.

But there are some glaring omissions in the neoclassical accounts of urbanisation — dispossession of landless and small peasants and the formation of urban slums — which are critical to understanding the processes of urbanisation in Pakistan.

Therefore, policy makers in Pakistan need to take neoclassical theories of urbanisation with a grain of salt.

Pakistan is one of the fastest urbanising countries in the region. As it undergoes urban transformation, it faces a dual contradiction.

On the one hand, urbanisation has the potential to open up new avenues for economic development via agglomeration economies, positive externalities and knowledge-spillovers.

At the same time, urbanisation can further perpetuate socio-economic inequities and conflicts, along with accelerated ecological degradation.

Contrary to the neoclassical account, Pakistan continues to urbanise while its share of industry has remained stagnant at around 20 per cent for the last three decades.

Meanwhile, decline in the share of the agriculture sector is being compensated by the rise of the low value-addition service sector.

In other words, urbanisation is not a by-product of industrialisation in the context of Pakistan.

Therefore, to effectively address the contemporary urban issues, it is essential to pause for a moment and question the neoclassical interpretation of urbanisation. It is important to ask: what are the underlying socioeconomic forces behind urbanisation in Pakistan?

The answer includes agrarian distress, conflict and natural disasters. Yet an intriguing aspect of urban development in Pakistan is the outward expansion of the urban, i.e. the urban is encroaching erstwhile rural spaces. This process is also known as urban sprawl.

This is directly tied to the land regime and industrial policy in Pakistan. The buying and selling of land is not just easy but it enjoys tax holidays and loopholes.

On the other hand, undertaking productive investments in manufacturing is much more difficult and cumbersome process.

Thus, for owners of capital, the buying and selling of land is the most reliable and effective strategy to accumulate capital. In continuous search of higher profits and investment opportunities, farm land, forests and green spaces are converted into gated housing communities.

In the last three decades, the urban sprawl in Lahore has increased by more than 98pc at the expense of green farm lands.

Similarly, in Islamabad, there is a 40pc rise in urban sprawl in the last two decades, whereas, 35pc of forest area has been lost during the same time period. A similar trend is observable in other major urban centres of Pakistan.

Pakistan’s urban development is a dialectic of urban affluence and urban vulnerabilities. Urban affluence is limited to the privileged few while vulnerabilities are collectively shared by the rest of the society.

For example, urban sprawl has produced a new class of billionaire real estate developers. On the other hand, it has imposed huge social and ecological costs. It has diminished biodiversity from the land, increased carbon emissions and polluted our environment. For example, Lahore has one of the worst air quality in the world.

The 21st century urban interface in Pakistan is a blend of high-end housing societies/malls and slum settlements, expansive underpasses and toxic air quality. There is ample evidence now that many new housing societies that are built on the peripheries of the city actually dispossessed locals from their livelihoods.

There is a complex web of political economy of land where politicians, civil-military bureaucracies and real estate capital are entangledwith each other. This explains why this model of urbanisation by dispossession is being continuously reproduced across Pakistan.

It is important to note that new housing societies only become feasible when new road infrastructure and other public goods (electricity, gas, piped water) are provisioned by the government.

Thus, the provision of public goods through taxpayer money plays a key role in making these housing societies commercially feasible. In other words, profits are privatised while costs are socialised in the contemporary model of urbanisation in Pakistan.

Urban vulnerabilities are outcomes of the contemporary model of urban ‘development’ rather than a lack thereof.

In other terms, Pakistan does not necessarily suffer from the lack of development; rather, the problem lies in the contemporary model of development that is predicated on dispossession, exclusion and environmental degradation.



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Dawn
About the Author: Dawn is Pakistan's oldest and most widely read English-language newspaper.

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