What are the motivating thoughts?
- The average urbanization in OECD countries is 67%.
- Pakistan's population is 220 million in 2020.
- By the time the ideas in this note come to fruition if it is put in practice, Pakistan's population might be 300 million in 2040.
- A good target for urbanization in Pakistan should be 50%, i.e., 150 million.
- Urbanization and industrialization can be closely linked; that is to say, that industrialization can cause urbanization as well as the reverse, that urbanization can aid industrialization.
- Urbanization can help deliver social services, education, health, documentation and taxation, more easily.
- Urbanization can cluster human resources in a population centre within which economic and entrepreneurial activity can take place.
How might be an urbanized population be distributed in Pakistan?
- Karachi - 20M
- Lahore - 15M
- Faisalabad - 10M
- Rawalpindi - 5M
- Islamabad - 5M
- Peshawar - 5M
- Quetta - 5M
- Hyderabad - 5M
- Multan - 5M
- Gwadar - 2.5M
- Sialkot - 2.5M
- Gujranwala - 2.5M
- Sargodha - 2.5M
- 130 District Headquarters x 500K
In the case of Karachi and Lahore, it is expected that they will be depopulated as a result of this plan. Depopulation will result in space being created in these cities for improvement of infrastructure. To incentivize the depopulation, other cities should be developed first to give people a reason to migrate away from these big cities, in search of better life prospects and work opportunities.
What would be good standards of services to achieve in the urbanization project?
Let us assume a household to be 5 members, with 2 in full-time employment, and 3 in full-time education and/or training.
Let us assume jobs should pay USD 1000 per month.
This means, the urbanization project would have to deliver the following:
- Jobs - 60M at 2 workers per household
- Households - 30M at 5 members per household
- Schools - 10K at 1000 pupils per school
- Colleges - 20K at 500 apprentices per college
- Universities - 2K at 5000 scholars per university
- Hospitals - 3K at 250 beds per hospital and 5 beds per 1000 population
This also means that:
- the GDP of this urbanized population would be 60M x 1000 x 12 = USD 720B
- a tax collection of 25% of GDP would result in USD 180B in taxes
How can such an ambitious project be undertaken?
Money in the modern sense is just a measure of productivity in the economy. Most countries have a fiat currency. This means that so long as there is economic activity under-pining it, money can literally be printed. It can be created out of thin air.
This is the central idea here, that is, start economic activity that generates even more economic activity, and make that activity balloon up till it reaches the proper scale.
As an illustration, to generate the urbanization outlined above, the following types of urban infrastructure might be needed:
In residential areas:
In business parks:
The above will be connected via traffic, transit, and telecom networks.
To build all of the above, the following materials (and many more) might be needed:
- Steel rebars
- Paving slabs
- Street lights
- Street signs
- Elecric wiring
- Electic switches
- Electric lights
- Interior paint
- Exterior paint
- Roofing tiles
- Interior tiles
- Double-glazed windows
- Solar panels
- Solar batteries
- Washing machines
- HVAC systems
If we know the final size of the cities in the list above, if we have detailed master plans of them stretching over 20 years, we can determine how much of the materials in the list above would be needed to achieve that urbanization.
Bear in mind that this is only half of the population. There would be another half living in a rural setting, which will also require raising of living standards, and so, production of items listed above.
These items are not high-tech, strategic items that will face resistance in transfer of technology. In fact, designs and specifications of many of them can be developed in-country through our existing expertise.
If there is a credible plan for such urban development, if there are designs, specifications, technologies and processes ready and available for Pakistani entrepreneurs to invest in manufacturing facilities, then Pakistan can enter into a virtuous cycle of wealth creation, industrialization, and urbanization.
Imagine all the jobs created to manufacture all the materials needed. Imagine all the jobs created to provide man power to all of the schools, colleges, universities, hospitals, markets, local bodies, etc.