August 26, 2004

Karachi, due to its colonial background, a large population , port city status, literate and vibrant populace, strong working middle class and a long tradition of hosting multinational firms and their interests in the country does fulfill some of the basic criteria associated with a global city, writes Farhan Anwar

“Cram people full of non-combustible data”, the fire captain explains. “Choke them so damned full of ‘facts’ they feel stuffed, but absolutely ‘brilliant’ with information. Then they’ll feel they’re thinking, they’ll get a sense of motion without moving.”

Fahrenheit 451, Ray Bradbury

Bradbury’s novel no longer seems set in a distant future. Thanks to the growth in computer capacity, television and PCs are merging into digital streams of sound, text and images that give people, societies and the corporate sector more information than they can make use of. Today, the information technologies represent the most potent symbol of a new age – the age of globalization.

In its broadest sense, globalization, represents a greater integration and linkage of global financial mechanisms and world trade and cultural aspects, reflecting the more visible and tangible forms of this phenomenon. Globalization is not new, but the present era has distinctive features. Shrinking space, shrinking time and disappearing borders are linking people’s lives more intensely than ever before. The phenomenon represents the growing interdependence of the world’s people.

Peoples’ lives – their jobs, incomes and health — are effected by events on the other side of the globe, often by events they do not know about. Borders are breaking down in economic policy – as multilateral agreements and the pressures of staying competitive in global markets constrain the options for national policy, and as multinational corporations integrate their operations globally. Multinational corporations now dwarf some governments in economic power. The assets of the top three billionaires are more than the combined gross national product (GNP) of all the least developed countries and their 600 million people. Culture has become important economically. Today’s flow of culture and cultural products is heavily weighted in one direction – from rich countries to poor. In the process, people are concerned about the spread of global consumer culture and cultural homogenization.

Global cities: representatives of the age of globalization

Some development theorists have agreed that with the apparent erosion of state power, the centres of power from where are manipulated the levers of control over the globalization process are being increasingly based in a limited number of world cities termed as Global Cities. It is argued that global cities – where banks, corporate headquarters and other command functions and high-level producer service firms are concentrated — have emerged as strategic sites in world economy. Thus the more global the economy becomes, the higher the agglomeration of central functions in relatively few sites – the global cities.

Anthony D. King, a prominent writer on the phenomenon of global cities, traces the historical perspective of the growth of world cities by linking the present scenario with colonial times and identifies the institutions, networks and organizations established during that period as having played the key role in facilitating the modern economic system and consequently the formation of global cities.

However, critical to understanding the dynamics of global cities is the understanding that such cities within themselves show high levels of economic disparity. Manhattan houses both the Fifth Avenue and Harlem with equal ease. While the manufacturing sector has contributed to the formation of a middle class, the service sector and growing industry-driven economy of the global cities has resulted in polarization in the income distribution and occupational distribution of workers. Thus, the need to create smooth-running, pleasant, glamorous uptown areas conflicts in many cases with the interests of the poor – there will be competition for land and high land prices, pressure on resources, lack of space for the unglamorous living quarters and business activities of the poor.

How can Karachi be, if at all, rated in the global city hierarchy – if not in the international, then in the regional perspective? Does the city have a valid case to defend and if so what are the merits and demerits of the debate? In other words, what political, economic and cultural niche does it want to carve for itself among the urban leaders of the world? These are some of the questions that arise when assessing the situation.

Assessing the case of Karachi

The historic evolution of Karachi is rooted in the colonial experience. When the British in 1838 occupied Karachi, it was a small fishing town with a population of 14000. In 1843, the British annexed Sindh and shifted the capital of the province from Hyderabad to Karachi. During their long rule, the British established many institutions and developed infrastructure and systems that helped mould the urban and cosmopolitan character of Karachi.

Throughout the British period, Karachi retained its urbanized European character, profile and merchant class identity. As Karachi did not possess a history of development rooted in any cultural, religious or political experience other than the British model, the psyche of the city and its people was strongly influenced by the western model of governance and cultural experiences.

Karachi was always a multicultural, multiethnic city. At the time of the creation of Pakistan, the population of Karachi was a rich mix of Hindus and Muslims, and there were also a sizable number of Goans, Parsis and Europeans, mostly belonging to the business class. Mosques, dharamshalas and Hindu temples existed in harmony in the native city and Hindu and Muslim festivals were celebrated with fervour.

Owing to a wave of immigrations in the post-independence period, Karachi has now become a melting pot of races, ethnicity and related cultural practices, and for this reason is popularly known as Mini Pakistan. However, it has not been able to extract any positive mileage out of this human mix. Race relations are identified with turf battles over possession of land, access to public services or control of political power rather than in the holding of cultural events and festivals. The reasons are political, social and economic, require extensive analysis and can be overcome principally with a show of political will on the part of all concerned. Presently, this is missing.

Karachi also presents the classic rich-city, poor-city scenario. In the British period, the city had become divided into the native city, consisting of the old town and its suburbs, and the European city, consisting of the cantonment, civil lines and Saddar Bazaar. However, it was a city at peace with itself. Today, the disparity between, say, the posh housing areas of Defence/Clifton and the squatters of Akhtar Colony could not be starker. Those at the margins and those at the center do co-relate, however, the relationship can hardly be termed as equitable.

Where does Karachi stand in the global cities hierarchy?

Karachi, playing the role of a potential global city, is linked to Pakistan assuming the status of a politically and economically active regional state. Pakistan, even with all its political instabilities, weak financial and social sectors and technological backwardness, could have an important role to play in the evolving political and development dynamics of the region owing to its geo-strategic status.

Karachi, due to its colonial background, a large population, port city status, literate and vibrant populace, strong working middle class and a long history of hosting multinational firms and their interests in the country does fulfill some of the basic criteria associated with a global city. However, there are severe constraints. Karachi is plagued with acute crises of governance, both at the political and at the administrative level. Institutions of urban governance are faced with problems of corruption, mismanagement and inefficiency, manifesting in producing a level and quality of life for the majority of citizens that is not normally equated with a global city.

The law and order situation is far from satisfactory. While high levels of urban crime are not uncommon for large global cities, for Karachi, the nature and form of urban violence is different. Politically motivated crimes and particularly brutal violence rooted in religious and ethnic turf battles tend to destabilize the whole city, not just isolated streets or neighbourhoods. There are issues of political and fiscal instability and lack of continuation of policies at the national level. Tensions with neighbouring India and Afghanistan do not inspire investor confidence.

Then there are the constant political tensions between Karachi and the federal government. Even in countries where such tensions did not earlier exist, problems have surfaced as a result of the globalization experience. The more successful the city is in attracting an international business presence and joining the global economy, the greater this tension may be.

Karachi definitely possesses the right kind of historical background, geographical significance and human indicators to register a valid claim and a place in the global city hierarchy. However, unless and until the city overcomes the violent nature of its racial, ethnic, and religious relations, instils a sense of political stability and substantially improves the systems and standards of urban governance, it would find it difficult to join the ranks of regional or international global cities. However, the possibility cannot be discounted out of hand should events beyond the parameters of national decision-making processes propel Karachi up within the global city hierarchy.

The significance of Karachi assuming the role of a global city could be profound not only for the city itself but for the entire nation. Experience has shown that nations are not always voluntary participants of the globalization process. It is therefore important for the policy makers to attempt to carefully visualize and plan greater integration in global compacts and systems, whether they like it or not. The prospects for sustainable growth and development of the country in an increasingly destabilized and uni-polar world will depend on the decisions taken now. Steps need to be taken to prepare the nation for what seems to be an inevitable integration in the globalization juggernaut.

What does a global city do?

• Concentrated command points in the organization of world economy

• Key locations for finance and the specialized sector that has over the years replaced the manufacturing sector as the key urban-based economic sector

• Sites for productions that include new forms, like production of financial innovations

• Markets for products and innovations n —F.A.

—Saskia Sassen, Professor of Urban and Regional Planning, Columbia University, USA

The global city...

Since the 16th century, London’s financial district, known as the City or the Square Mile, has been one of the most powerful business centres of the world. Today, with 539 foreign banks, it is the most international city: More than 437 billion dollars flow through its foreign currency markets every day, far more than anywhere else in the world. The value of London’s economy — $162 billion — is larger than that of many countries, including Poland, Singapore, and even Switzerland. —F.A.

A potential economic powerhouse...

Even before the colonial times, Karachi functioned primarily as a trading city. Legend has it that Karack Bunder was an important port on the Arabian Sea in the late 17th and early 18th century. It handled South Indian-Central Asian trade and was situated about forty kilometres west of Karachi bay on the estuary of the Hub River. The estuary was silted up due to heavy rains in 1728 and the harbour could no longer be used. As a result, the merchants of Karack Bunder decided to relocate their activities to what is today known as Karachi.

With the coming of the British, Karachi faced its first taste of multinationals in the functioning of the British East India Company. The port was improved. The Sindh Railway, developed in 1861, was subsequently extended into the Punjab and later linked with Northern India. As a result, by 1868, Karachi had become the largest exporter of wheat and cotton in India. Karachi also received a boost with the opening of the Suez Canal in 1869, which made it the nearest port in India to Europe.

With the creation of Pakistan, Karachi witnessed rapid industrial development. 139 industrial units in 1941 multiplied to 3148 in 1960. Even today, with all the law and order and political complications, Karachi manages to maintain its central importance within the economic growth of Pakistan. One of the most growth-oriented employment mode of the city is the services sector. The value addition that takes place here in the banking and insurance sectors, amounts to almost half of that of the entire country.

The other forms of the economy such as the informal economy, which figure prominently in sustaining the growth of the global cities is most active in Karachi. According to the Karachi Master Plan 2000, 75 per cent of the population of Karachi works in the informal sector. However, unemployment is still over 10 per cent and income disparities are quite prominent. Almost 50 per cent of the population lives in squatter settlements with limited access to public utilities and gainful employment opportunities.

The footprints of the corporate multinationals are on the increase in Pakistan and the headquarters of a majority of the large corporate players are based in Karachi. For example the headquarters of a majority of all the multinational banks operating in Pakistan (14 out of a total of 39 commercial banks operating in Pakistan) are located on the Wall Street of Karachi – I.I. Chundrigar Road. —F.A

The experts speak...

Professor Noman Ahmed, Chairman, Department of Architecture and Plannning, NED University of Engineering & Technology, and a noted urban development expert, feels that although Karachi does enjoy a critically important geo-strategic status, the lack of economic and security safeguards severely limit and curtail the chances of it ever becoming a real global city. The law and order situation is deteriorating fast and the fickle nature of our fiscal policies do not inspire investor confidence. Professor Ahmed cites the Open Sky Policy introduced in Nawaz Sharif’s time that had great potential for economic betterment but was revoked without due reason. He terms the steady erosion in performance levels of the local institutions of governance as a key element in restricting Karachi’s growth potential. Decisions are taken on an ad-hoc basis with no regard for accruing the benefits of long term planning. Prof. Noman does not share the government’s enthusiasm regarding the potential economic growth when Karachi is linked with trading activities with the Central Asian region. He feels that the Federal government would strictly control all elements of this trade that would create what he terms a ‘crude capitalism’, promote smuggling and would give rise to new frustrations for the city rather than opening up new avenues of growth. He points out to the Sui gas pipeline case where undue federal control is breeding bitterness and violence at the local level.

Prof. Ahmed finds some ray of hope in the banking and communication sectors in the city that have survived many challenges and are prospering, giving some confidence to potential investors. He also identifies the local government organizations as possible leaders in lobbying the case of a Global City Karachi. However, he stresses that before they can assume such a role they would have to tackle some serious issues like removing legal anomalies that hinder their work, identifying inequalities within the city and putting in place the required planning and implementation procedures and practices. They would have to take charge of their own destiny, otherwise their role would always be marginalized and the residents instead of looking to them for solutions to their problems would keep waiting for some special development ‘package’, from the federal government to assuage their needs!

Dr Kaiser Bengali, Acting Managing Director, Social Policy Development Centre, and a well-known urban economist, paints a gloomy picture for Karachi as a global city. He feels that the writ of the state is non-existent in the city. There is complete lawlessness and various mafias run the city. The institutions of the state have neither the will nor the capacity to take on these gangs and mafias. Politicaly motivated hoodlums and area thugs blackmail and demand extortion money from local businesses and commercial concerns with impunity and the government turns a blind eye to all this. Who would take the risk of investing in such an environment? Even those who have invested are finding it difficult to operate. It is a common practice now that high level corporate meetings involving operations in Karachi are either held in Dubai or in Islamabad as corporate heads are afraid of coming to Karachi. Dr Bengali gives an interesting example – when a foreign airline has a night stopover in Karachi, the airline crew flies to Dubai, spends the night there and returns the next morning to fly out from Karachi!

Dr Bengali is of the opinion that Karachi possesses enough potential to find a proud place in the hierarchy of the top cities of the world but the political will just does not exist of ridding Karachi of the demons that torment its soul. He finds little hope of things changing for the better any time soon. —F.A.

Karachi city:a future global city

An important consideration would be the competition Karachi would face from other regional cities vying for the same role. India in particular carries much more political and economic clout in the global arena than Pakistan and its major cities may be better placed in terms of political stability, economic strength and improved standards of urban governance. —F.A.

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