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Lahore is probably the most vibrant city of Pakistan, with both its economy and population growth rates outpacing the rest of the country. It is good and bad as the same time; as high economic growth is enhancing vibrancy of the historic walled city, but higher influx of migrants is outpacing fast growing roads and other infrastructure of the city. And the worst part is the deteriorating air quality of an otherwise four-seasoned city.

In Pakistan there is no official statistic to tabulate growth rate at district levels. There are sporadic studies to gauge growth at cities’ and provinces level. Recently, Dr Nadia Tahir, under the umbrella of Lahore Chamber of Commerce implied Lahore GDP growth rates using national, provincial and districts levels data sets. There are certain limitations to the study due to paucity of data; it is nonetheless, an effort in the right direction, paving way for provincial statistical authorities to come up with official numbers.

Not to the surprise of many; between FY11-17, Lahore’s GDP is estimated to grow by 6.1 percent, annually against Punjab annual growth rate of 5.0 percent and country’s growth of 4.2 percent. To give perspective of contribution of Lahore in particular and Punjab in general in overall country’s GDP, Lahore’s average annual growth at 6.1 percent is much higher than rest of Punjab minus Lahore (2.4%). The Punjab grew on average at 5percent which is significantly higher than rest of the country minus Punjab (3.3%).

The quality of growth in Lahore is skewed towards services sector. The agriculture contribution is negligible as it contributes 2.3 percent of national agriculture output, and it may fall further as Lahore district is 99 percent urban. Lahore’s contribution to LSM has increased from 9 to 9.7 percent’ but the share in energy has declined substantially from 15 percent to 8.3 percent. The story of energy is similar for Punjab; as the 18th amendment has skewed the energy resources towards less productive provinces.

The real story is of growing services, especially in transport, storage and communication, finance and insurance and housing services. Housing is the fastest growing sector as its share in national GDP increased from 16.8 to 22.9 percent. Transport is growing too as Lahore contributes one fourth of the country’s transportation.

Seeing this higher influx of domestic migration to Lahore should not be surprising. The population of Lahore more than doubled during 1998-2017 to stand at 11.1 million - average annual growth rate of 4.02 percent which is one of the highest in the country. Lahore is projected to be the most populous city of the country by 2035. Yes, it may surpass Karachi, which stands at 14.9 million.

Why Lahore’s population is growing so fast? Well, even after two decades of higher population growth (read urban migration); contribution of Lahore GDP is still double its population share.

Last year, the city contributed 11.5 percent to the national economy versus its population share of 5.2 percent and it constituted 20.5 percent of annual output of Punjab which is double than its share of 10 percent in provincial population

One may wonder if the quality of average person in Lahore is improving or deteriorating as both population and GDP growth rates are in competition.\

The point is that high growth comes with a cost. Spending in Lahore by Punjab government is much higher than the rest of Punjab; though government’s services share of Lahore in national economy has decreased from 17.2 percent (FY11) to15.4 percent (FY17). In the absence of development of modern services in other cities, people from all over Punjab are moving to Lahore in strive for better employment, education, health and in general a better life style.

But this all has an externality on original inhabitants of the city. The culture of the city is changing fast amid the traffic on roads is becoming chaotic. The worst problem is in the form of fast deteriorating air quality in Lahore which is worse than Delhi and Beijing.
The lesson to learn is to develop other cities in line with the development in Lahore as to have the reverse of migration in the city.

Otherwise, Lahore will keep on developing but population would continue to grow even faster to elude any benefits for supposedly the Lahoris. There is a Punjab economic report published by PERI which has given a road map for the economy of the province.
More on the reports in subsequent columns.

Copyright Business Recorder, 2018

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