THERE is an ‘anti-encroachment’ operation ongoing in Karachi where, in addition to street vendors being removed, shops that are found to be extending their operations onto the streets are being shut down. In the absence of a viable, workable solution, such operations will continue without yielding any positive dividends.

Karachi possesses a rich tradition of street vendors, selling goods and extending services to an expanded clientele. These vendors form part of a much larger, though not fully documented economic sector in Pakistan. The Pakistan Institute of Development Economics, in a 2020 research survey, estimated that around 936,000 people, accounting for one per cent of the urban population in Pakistan, are operating as street vendors. Research by the Urban Resource Centre estimates that there are 150,000 hawkers operating in Karachi.

However, it is deeply concerning that despite the fact that vendors form a significant part of the economy, serving diverse socio-economic classes, their informality gets cross-referenced with illegality. Informality only assumes a wider footprint when a state fails to provide security, justice and opportunity for economic growth and serves as a reflection of state dysfunctionality. So, a successful transition from informality to formality, from a status of illegality to legality can only be achieved through improved government writ and efficiency.

Continued existence of this informality-cum-illegality serves as a denial of dignity in work for thousands of associated marginalised communities. Such a policy action will help bring compliance with Pakistan’s commitments to a number of relevant ILO treaties and conventions, and the SDG framework. Furthermore, synergy will be created with the fundamental rightsenshrined in the Constitution.

It is concerning that street vendors get cross-referenced with illegality.

Legitimising this economic sector opens up opportunities for empowering communities on the margins — women, religious minorities, people with special needs and in general the poorest of the poor. This can happen both through better support to communities already part of the economy and also by incentivising the unemployed to enter this sector, creating a synergy with empowerment platforms such as BISP, Sindh Poverty Reduction Strategy and other such programmes. Global best practices are documented and can be referenced on how successfully policymakers worldwide have incorporated measures for reducing poverty, unemployment and empowering the marginalised by legalising the street economy.

The government, by not extending legal recognition, is also losing out on a substantial revenue base. Financial returns that could have been deposited in the municipal revenue banks which are already stretched thin, through taxation and land rent end up in the pockets of corrupt officials through rent-seeking. Financial inclusion, by devising mechanisms such as savings accounts, loans, digital wallets and business transactions, can positively impact operations and economic growth for medium and small-scale enterprises. Opening up of a new, digitised and growing economic sector would complement the government’s strongly stated resolve to digitise the economic sector.

Policy research indicates that SME banks are willing to offer loans and services, such as for funding operating costs, in the case of street vendors, but would feel confident if the government gives the sector proper legal recognition and institutes fiscal measures such as offering subsidies and infrastructure access.

There is a strong rationale for impro-ved urban pla-nning and de-velopment. A spatial design intervention for creating vendor zones can become part of a larger urban planning initiative that can be triggered by the preparation of an urban street designmanual for Karachi. Interventions for vending zone design can create multiple design and operational zones that may be located at the neighbourhood, market, institutional or recreational level.

The ongoing preparation of the Greater Karachi Regional Plan 2047 can provide a space for official recognition and acceptance for such planning and design interventions.

It is understood that given the extended period where this illegality has been tolerated, strong vested interests and institutional inertia have developed, resisting change. However, the Sindh government has shown the resolve to take decisions to bring transparency and accountability to government functions. Given the strong rationale highlighted for making this policy shift, it is expected that appropriate action will be taken.

The writer is an urban planner and associate professor of practice, Habib University.

farhan.anwar@ahss.habib.edu.pk

Published in Dawn, January 23rd, 2026