A Charter for Karachi

A certain Corporate Pakistan Group (CPG), which claims to be a leading platform of business, economic and technocratic community, has spelled out their Charter for Karachi, which it believes is critical for the effective implementation of the Karachi Transformation Plan. Other representatives of business community, the KCCI, FPCCI, and the PBC have not publicly come out in support of the charter but some of CPG’s demands have indeed resonated with wider business community for some time, even as all relevant players may not have united under one banner. (See also BR Research’s Karachi Transformation Plan, Sep 8, 2020)

The CPG, for instance, demands an empowered city government, which is a fair ask. As is their demand for good infrastructure, where the CPG says that once an empowered metropolitan government is in place, “authorities with the assistance of both federal & provincial government should undertake the launch and revamp of civic infrastructure of Karachi that is in shambles”.

CPG’s charter also, and rightly so, demands that the city government should be empowered to “raise revenue in order to cater to the needs of the metropolitan from sources such as octroi, civic taxes, traffic fines, car registrations, government services, etc”. Here, it seems to have missed out on property taxes, but the general direction is quite agreeable.

Then it demands for a strong and robust accountability system, low cost housing schemes and special economic zones. And these too are tenable, as are its demands for local body elections, and provincial finance commission award. But frankly, a lot of what CPG’s charter demands applies to all other cities in Pakistan as well.

All major cities in Pakistan require strong metropolitan governments, empowered both politically and fiscally, and to which various civic institutions report to. Likewise, all major cities and other sub-national tiers need an ‘authentic census’ as the CPG demands. But most of CPGs demands require a change in local government laws, which in a politically divided province such as Sindh may not come about unless there is a corresponding change in the constitution, as the CPG demands in its charter as well.

Having laid out the charter, three main tasks now confront the CPG, but for which it will need the support of wider business and political community. First, drum up the advocacy for constitutional amendment. The amendment may not be possible given that it requires two-thirds majority in the parliament, which may be difficult to achieve given hostile political environment. But at the very least, a private member bill can be introduced in the parliament to kick start a debate.

The bill can take a leaf out of Nepalese constitution, which even defines the structure of sub-national states at third tier, distribution of state power down to local level, terms of office at third tier, and even structure of municipality. Or the Indian constitution, which also spells out elements such as the composition and duration of municipal governments, their power, authorities, and responsibilities, their power to impose taxes, funds of municipalities, committee for metropolitan planning and so forth.

Second, convince Karachi’s business community to fill out the forms of Census of Manufacturing Industries (CMI) needed for the rebasing of the GDP. It so happens that information gaps are huge in the case of Karachi. The last CMI was done in 2005. In the 2011 round, Karachi’s industrialists refused to fill out the forms, which led to the scrapping of the exercise. The same problem is being faced in the ongoing round of GDP rebasing. Unlike Punjab where more than 70,000 industrial undertakings have already filled out the ongoing round of CMI forms, Karachi’s business community seems adamant not to.

Over the last two years, Sindh’s planning department, industries department and even the chief secretary office have made various attempts to gain the confidence of business community by engaging various chambers and associations of Karachi. They have also assured them that CMI surveys are not for tax purposes and agreed to use a form that gathers minimum non-invasive information, which only sheds light on general trends and proportions rather than specific sales or consumption numbers.

Yet Karachi’s business community remains wary and non-cooperative without paying heed to the fact that their failure to be counted will reduce Karachi’s weight in GDP estimates and also impair provincial government’s (as well the ideal local government’s) ability to be able to distribute resource and public goods in terms of effluent plants, sewerage etc.

The third task that the CPG should undertake is to gather funds from Karachi’s business community and set up a policy research institute/think tank dedicated to research on political, fiscal, administrative, and other aspects of Karachi. For more on this, read ‘Karachi’s big question’, published in this space on Sep 3, 2020.