KARACHI VIOLENCE HITTING HARD TO THE NATIONAL ECONOMY
July 11 - 17, 2011
Political divide in Karachi also known as the city of lights is resulting in not only uncertainty, insecurity and fear but also hitting hard to trade and business activities in this port city raising questions on the ability of law-enforcing agencies to bring the situation under control.
The tension in the city after a new wave of target killings and violence has hit the business and industrial activities as workers living in affected areas are not turning up to their jobs. The Site Industrial Area is suffering from low productivity problem as a large number of workers living in affected areas fail to reach their factories owing to tense situation.
Apart from this, illegal activities such as mobile snatching, armed robberies, smuggling, target killings, etc. are flourishing while powerful groups like extortion mafia, land mafia, water mafia, arms dealers and other criminal gangs reign supreme in various areas of the metropolis. Strikes and protests are common in the city. A single-day loss to the economy is estimated at Rs15 billion if the industrial sector in the city is shutdown.
Violence on ethnic and sectarian grounds with growing incidents of target killings has a severe impact on industrial and trading activities and result in financial turmoil for local businesspersons. Though the security issue has hit the entire country, it is precisely violence in Karachi-the epicenter of Pakistan's commerce and trade- that can throw the entire national economy into recession.
In March, some 160 people were killed and scores of others were wounded in uncontrolled target killings in the metropolis during the month of March, while properties worth millions of rupees were also destroyed in different arson incidents. In fresh wave of killings, around 90 people lost their lives besides loss of property.
Karachi is country's financial hub, as it contributes 70 per cent revenue to the federal government and 95 per cent to the Sindh government, and contributes 80 per cent to national exports. Uncertainty disrupts the entire supply chain from the industrial areas to wholesale markets and to retail markets.
Experts believe that lawlessness in Karachi could adversely affect the already faltering national economy, as it continues to disrupt economic activity in the country's industrial hub. One of the major reasons is deteriorating law and order situation, which prevent potential investors from investing in the country. Foreign investors are reluctant to invest in any country having poor law and order situation. Another headache for businesspersons as well as public is 12-18 hours load-shedding.
Parliamentarians and businesspersons said that "lack of true leadership" is behind all the mess from worsening law and order situation to fragile economy, political uncertainty to rising insurgency and unemployment to high inflation.
They were of the view that the visionless leaders are visibly helpless to control fiscal deficit, food inflation, energy crisis and terrorism, which has already destroyed the country's economy. They added that coalition partners of present regime lack the ability to improve the much-needed GDP growth, introduce tax and land reforms, and enhance local manufacturing besides stamping out corruption and bad governance from the system. They also said that the so-called war on terror hit the economy hard and the worsening law and situation coupled with terrorism led to almost shutting of foreign investment in the country.
Shah Mahmood Qureshi said that the federal budget 2011-12 of Pakistan had been prepared in Dubai and the international powers (IMF) gave approval of the budget before it was presented in the parliament. He said that the fiscal targets including revenue collection, fiscal deficit, and withdrawal of subsidies in the budget were fixed on the foreign dictates.
Former Minister Ijaz-ul-Haq and former Speaker Chaudhry Ameer Hussain said that strong political will is needed to tackle the current situation.
Businesspersons Saeed Shafique, Sohail Lashari, Sheikh Muhammad Arshad, Mian Anjum Nisar, Irfan Qaiser Sheikh said the government must come up with viable solution to Karachi's problem, as it is badly hitting the national economy. They were unhappy with the government for not taking steps to overcome load shedding. They said 90 per cent small and medium enterprise (SMEs) units out of the total 4,000 units had suffered massive production losses because of non-availability of power.