IN Pakistan, the size of the national economy or gross domestic product (GDP) is officially measured by the Pakistan Bureau of Statistics. The only time the official estimates of gross regional product (GRP) were prepared was in 1964.
A National Income Commission was set up which came out with separate estimates of GRP for the then provinces of East and West Pakistan in 1964.
The exercise was done in the background of the debate on the increasing inter-wing disparity in income per capita. Since then, there has been some reluctance to resume the exercise at the official level.
In today’s fast changing world, where states or provinces within countries compete with each other and globally for business, this hackneyed thinking has to be abandoned.
In today’s fast changing world, where states or provinces within countries compete with each other, and globally, for business, the hackneyed thinking of not calculating the Gross City Product has to be abandoned
In the Ease of Doing Business Index, a few important indicators are based on city-wise performance. It is, therefore, not surprising that gross product is being estimated at the level of cities as well.
In the absence of official estimates, the only possible approach is to break up national data by using secondary sources.
In 2005, Dr Kaiser Bengali and Mahpara Sadaqat estimated the provincial GDPs from 1973 to 2000 for the provinces. In 2015, Dr Hafiz A. Pasha estimated the GDP of Punjab for the Institute of Public Policy.
The Lahore Chamber of Commerce and Industry used this methodology, with some modifications, to update the estimates for the period of 2010-11 to 2014-15. It also estimated the Gross City Product for Lahore.
The 2017 Census shows that Lahore remains, as it was in the 1998 Census, the second largest city of Pakistan, However, it is the only city whose population has more than doubled in the intercensal period, from 5.14 million to 11.13m. With an urban population growth of 4.02 per cent, the Lahore district is now around 99pc urban.
Based on an analysis of individual sectors, the following were calculated: (i) Lahore’s share in the national economy in agriculture, industry and services sectors (ii) sectoral composition of the Lahore economy (iii) share of Punjab in the national economy in agriculture, industry and services sectors (iv) sectoral composition of the Punjab economy.
The Table 1 gives the sector-wise share of Lahore and Punjab in the national economy and a point of note is that while Lahore’s share in national value added in agriculture and industry remains unchanged, it’s share in the services sector has increased by almost 2 percentage points during 2010-11 to 2014-15.
It appears that the main source of growth during the time period for the city was the services sector rather than industry or agriculture.
The analysis also reveals that Lahore’s contribution in national GDP is 11.5pc. During the first five years of this decade, the city’s share in national GDP has increased by one percentage point while it’s share in the provincial GDP also increased by 1.2 percentage points.
The Lahore economy constitutes 19pc of the Punjab economy. Similarly, for Punjab, the industry’s share increased by 2.5 percentage points and the share of the services sector increased by 4.5 percentage points while agriculture’s share decreased by 2.5 percentage points.
In 2014-15, Punjab’s share in the national GDP was 56.4pc. In the first five years of the decade, the region’s share in national GDP has increased by 2.6 percentage points.
The economy of Lahore, like most vibrant urban centre, is largely services-oriented. The manufacturing sector is small and its share is declining. Agriculture is less than one per cent. Livestock is the overwhelming economic activity in the agriculture sector.
The most important result of the study is that Lahore has a large economy of over a trillion rupees. In 2010-11, the size of the economy of Lahore was around Rs945.6 billion. It went up to Rs1,227 billion in 2014-15.
Not only is the Lahore economy large, it is also a thriving one. In the period of the study, the annual GDP growth rate of the city was higher than that of Punjab and Pakistan.
As the Table 2 indicates for the period 2010-11 to 2014-15, the Lahore’s economy grew at a rate of 6.7pc per annum as compared to the five per cent growth rate of Punjab and 3.9pc growth rate for Pakistan.
The writer is director research and development at the Lahore Chamber of Commerce and Industry
Published in Dawn, The Business and Finance Weekly, January 15th,2018