KARACHI - PAKISTAN'S NEW YORK
A glance at the revenue generated by Karachi-based industries and industrial areas would give a fair view how big is this city's contribution to national economy
FROM ANISUDDIN KHAN
Mar 06 - 12, 2006
What New York is to United States, Karachi is to Pakistan. It is the hub of national economy, the powerhouse that moves the financial and industrial economy of this third world country. Like New York, Karachi developed into a throbbing commercial center from an ordinary fishing village that it was in mid 19th century when British conquered Sindh. The natural port of this once tiny settlement of fishermen became gateway for the northern India.
This city of 12 million plus, Karachi is the home to country's two biggest seaports, nation's biggest airport, all the major banks and DFIs, including mother of all banks - the State Bank of Pakistan.
Karachi has the distinction to have country's only steel making complex i.e. Pakistan Steel. Other significant economic players including Export Processing Zone, five industrial estates consisting of over 10,000 big and small industrial units are the part of the economic life of Karachi. Over 60 percent of automobile industry is housed in Karachi, besides the biggest income tax head office, a huge Customs Collectorate and over 20 professional universities. Over the years, the city has developed a huge network of IT industries and head offices of all the major independent cable networks located here.
In 1947 when Pakistan achieved independence, Karachi became the fastest growing city and the national capital of the country.
The population of this city grew with alarming rate as thousands of persons from India migrated here to make their dream of establishing a Muslim state come true. The migration brought bankers, engineers, professors and bureaucrats and entrepreneurs who played critical role in the financial and industrial development of the country.
When Pakistan emerged on the world map as an independent sovereign nation, it had no industry and its economy was based on cotton which grew in the Western wing and jute growing in the Eastern wing. But these crops gave the fledgling nation the much-needed foreign exchange, which provided the much-needed financial base to build an economy upon.
The new government has boldly moved to tackle the mountains of problems of rehabilitation of waves of displaced persons. It is creating a new state, the technocrats and entrepreneurs mostly those who had migrated here from Burma and Bombay started laying an industrial base that later became an asset of the national economy.
During the last five decades, the city of Karachi saw great industrial revolution. Scores of big, medium size and small industries were set up in the industrial zones marked specially for that. The Sindh Industrial and Trading Estate set up immediately after independence saw coming up of a number of industries. Industries were also set up at Lahore and Faisalabad previously known as Lyallpur became Manchester of Pakistan, where a number of textile mills were set up.
However, no other city in the country had been able to catch the financial and industrial aura of Karachi which generates 70% of the national revenue. It accounts for the lion's share of Pakistan's GDP.
The entire major banks both national and foreign and majority of DFIs are located in this port city. As the city was picked to be the first capital of the new country, the State bank of Pakistan was headquartered here. Big private banks such as Habib Bank, Muslim Commercial Bank, United Bank and the National Bank of Pakistan, a government institution, are located in the city with branches and regional offices located all over the country.
All these banks along with a number of multinational corporations were located at II Chundrigar Road (formerly McLeod Road) named after a Prime Minister of the country. Nation's biggest stock exchange - Karachi Stock Exchange, Chamber of Commerce, all had their head offices on this main business traffic artery, which has been nicknamed as Wall Street of Pakistan.
Country's biggest international airport recently christened, as "Quaid-e-Azam International Airport" is also located on the eastern side of the city. Until recently all the known top class airlines from USA, UK and Europe would stop over to pick up and drop passengers. Being all weather airports all international airlines preferred to pass through this city on west and east ward destinations.
A glance at the revenue generated by Karachi based industries and industrial areas would give a fair view how big is this city's contribution to national economy a decade ago. According to official figures Central Board of Revenue (CBR) collected Rs. 568 billion or 89 percent of total tax revenue of federal and provincial governments about a decade ago. Karachi share in this stood at 71%. This percentage also included sizable amount collected in the form of surcharge on petroleum and gas.
Cement industry located in and around the city yielded Rs. 331 million in revenue, Rs. 189 million were picked up from sales tax, while POL products contributed Rs.689 million.
Another area where Karachi contributed most to the national economy was in the lubricating oil sector. This item yielded Rs. 394 million.
Automobile sector, the fastest growing industry is another field where Karachi's contribution is biggest.
The entire known automobile companies of Japan, Korea and some from Europe are facing difficulty in meeting the growing demand of four wheelers for the local market. The growth of this industry has given birth to the automobile vending industry, which is hundred percent local. The rush of automobiles on the narrow and poorly maintained roads of this metropolis had so much multiplied that the local government was forced to construct a number of by passes and fly-overs to maintain sanity in the flow of the traffic at peak hours.
Major automobile manufacturing companies like Toyota of Japan has plans for 120,000 units per annum. Suzuki Motor Company also located in Karachi has already increased its production capacity to 50,000 vehicles per year at its plant located at Bin Qasim industrial area.
Among the two major seaports located close to the city, over 150-year-old Karachi Port Trust is the premier port that handles about 75 percent of entire national trade. It is a natural seaport with 11 km long approaching channel providing safe navigation for 75,000 DWT tankers and modern container ships visiting the port. Last year the port handled a cargo volume of 21.8 million tons, which is 6.6 percent higher.
Port Qasim, the second deep sea port located on the eastern shores of Arabian sea, is meeting more than 40 percent of shipping requirement of the country. During July 2004-2005 a cargo volume of 16 million tons was handled at the port which is handling cargo of furnace oil, edible oil, coal, wheat, fertilizers, molasses, machinery, iron ore and crude oil.
Gwadar port is now fast approaching completion, which would be the third big port of the country. Located 460 km west of Karachi on Balochistan coast and close to Persian Gulf it is expected to enjoy high commercial and strategic importance. The port is being constructed in two phases.
Karachi had overcome all political efforts to thwart city's industrial development. The first major blow to Karachi came when the capital was shifted to Islamabad. Second attempt came when the government unleashed an era of nationalization in early 70's, which drastically cut down investment in various sectors. Third time under the garb of law and order in mid eighties, the successive democratic government scared the investors away. After surviving all these traumatic experiences Karachi remained on course of development. Induction of a new government in October 1999 brought in a new life to the investment which is on rapid rise since then.