Where Pakistan’s Tenacity Is on Full Display

(Bloomberg Opinion) -- While Pakistani Prime Minister Imran Khan is visiting my country, I have been enjoying his. Khan’s trip is diplomatic and includes meetings with President Donald Trump and at the United Nations; mine was to attend a business conference in Karachi and, more to the point, satisfy my curiosity about the world’s fifth-most-populous nation.

I came away optimistic, but not for the reasons I was expecting. Karachi has world-class food, a lively music scene, and some of the warmest hospitality I’ve encountered in any large city. But it cannot compete as a tourist destination until it cleans up its act, quite literally speaking.

Pakistan’s urban infrastructure is worse than I had imagined. It raises the question: Which is easier, making a city cleaner or safer?

The downside of Karachi is evident immediately upon leaving the airport: It has perhaps the worst sanitation problems I have seen in any city, and I have visited some leading contenders for the title. Piles of garbage and crumbling concrete blocks seem to be the two iconic sights of the city. The beaches on the Arabian Sea are unswimmable and often ugly.

Most recently, the city has been beset by a plague of flies — a “bullying force,” says the New York Times, “sparing no one.” The swarm of flies, which I was fortunate enough to miss, was the result of monsoon season, malfunctioning drainage systems clogged with solid waste, and slaughtered animals from the Muslim celebration of Eid. (The same monsoon season, by the way, led to power blackouts of up to 60 hours.) On a livability index, Karachi ranks near the bottom, just ahead of Damascus, Lagos, Dhaka and Tripoli.

There is no subway, and a typical street scene blends cars, auto-rickshaws, motorbikes and the occasional donkey pulling a cart. It’s fun for the visitor, but I wouldn’t call transportation easy.

And yet to see only those negatives is to miss the point. Markets speak more loudly than anecdotes, and the population of Karachi continues to rise — a mark of the city’s success. This market test is more important than the aesthetic test, and Karachi unambiguously passes it.

Pakistanis have been pouring into Karachi for decades, mostly for greater opportunity. After the partition of British India and the creation of an independent Pakistan in the late 1940s, Karachi was still a backwater. These days it is by far Pakistan’s largest city, with an estimated population of about 20 million and growing. It may soon end up as the world’s third-most-populous city, with 30% growth projected through 2030. The city accounts for more than half of Pakistan’s federal tax revenue.

One of my biggest takeaways from five whirlwind days in Karachi is that “urban agglomeration externalities” — the economist’s fancy term for the benefits of living in a city — are larger than I had thought. Urbanization improves human lives more than its aesthetics would indicate. Unfortunately, this same logic helps explain why it is so hard to fix malfunctioning megacities such as Karachi: Improving them encourages more people to come, and overcrowding will make some of the core problems worse.

Around town the visitor sees signs describing Karachi, one of which reads “Karachi: The Place to Be.” That is the bottom line, no matter how improbable it might seem on arrival. I also saw “Karachi: Epitome of Resilience” and “Karachi: Pakistan in Miniature,” both of which are appropriate — and slightly double-edged.

Karachi feels like a city without a clearly defined past, or at least not one that has carried over into the present. In the 1950s it was known as the “Paris of the East,” but that impression has not aged well. In 1941, before partition, the city’s population was about 51% Hindu. Now it is virtually 0% Hindu, obliterating yet another feature of the city’s history. It is currently a mix of Pakistani ethnicities, including Sindhis (the home province), Punjabis, Pashtuns, the Baloch and many more — indeed, Pakistan in miniature.

In addition to the benefits of urbanization, the generally peaceful nature of the city made a big impression on me. I was told by many people that Karachi was a kind of war zone, and that was to some extent true in the 1990s. The city was overwhelmed by money from trade in drugs and armaments, and the rapid arrival of so many newcomers.

But remarkable progress has been made in the last half decade or so, a testament to the city’s dynamism and ingenuity. According to one crime index, Karachi is now less dangerous than Houston, New Delhi or Sao Paulo. Maybe you don’t trust the data, but my casual impressions walking around are consistent with those rankings. It’s not Tokyo or Zurich, but if you have traveled widely and are thinking you might want to come, do not let fear of crime put you off. (Plus, you always can escape to the country’s idyllic north.)

Concrete measures of particular crimes show similar progress. There were 965 targeted killings in 2013, but by 2018 there were only 51. Incidents of kidnapping were 174 in 2013, and 13 in 2018. If nothing else, Karachi has shown it can make huge progress on at least one of its major problems.

What other problems might be next? What about the economy, in Karachi and Pakistan as a whole?

The immediate news is not great. A recent IMF forecast predicted a growth rate of 2.4% for the next fiscal year, down from an earlier range of 4% to 6%. In a part of the world where Bangladesh often has achieved growth rates of 8% or higher, that just isn’t good enough.

Still, that number is not the right way to understand the growth potential of Pakistan. For centuries, the region (now a country, of course) has been no poorer than most of the rest of historic India, and arguably for a long period of time it was somewhat wealthier. So Pakistan is not doomed by its culture. It simply needs more of a single-minded focus on economic growth.

I spoke to numerous involved persons about the venture capital and startup scene in Pakistan, and their impressions were mixed. But at least there is a scene to disagree about. “Reminds me of Indonesia about 10 years ago” was one informed response I heard. Is that good or bad news? Either way, it’s something to build on.

One of my frustrations with the policy dialogue I heard in Karachi was how much of it centers on India and what Pakistan should do to counter its geopolitical influence. This discussion strikes me as premature; in order to have more clout internationally, Pakistan first needs to get much wealthier. In the meantime, the country should make domestic policy more of a priority.

The best economic news for Pakistan is simply that there is a lot to be gained from instituting various relatively straightforward improvements, starting of course in Karachi but hardly ending there.

One set of big but (mostly) fixable problems involves public health. Dengue is a new scourge, and Karachi has the usual ailments of a poor megacity, such as malaria, typhoid, chikungunya virus and respiratory disorders. Some 26% of the country suffers from diabetes. Education could also stand a great deal of improvement, even if there is no simple, quick fix.

Most of all, I am impressed by the tenacity of Pakistan. Before going there, I was very familiar with the cliched claim that Pakistan is a fragile tinderbox, barely a proper country, liable to fall apart any moment and collapse into civil war. Neither my visit nor my more focused reading has provided any support for that view, and perhaps it is time to retire it. Pakistan’s national identity may be strongly contested but it is pretty secure, backed by the growing use of Urdu as a national language — and cricket to boot. It has come through the Afghan wars battered but intact.

Prince William and the Duchess of Cambridge are scheduled to visit Pakistan next month. As a recent visitor, I highly recommend that they spend some proper time in Karachi — and hope that many more will follow in their footsteps.

Disclaimer: My trip was paid for by the Nutshell Conference,and many Pakistanis treated me to meals, against my insistence I might add.

To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include "Big Business: A Love Letter to an American Anti-Hero."

©2019 Bloomberg L.P.