Leveraging Urbanization in South Asia

Pakistan Urban ForumKarachi January 10, 2014

Peter D. EllisLead Urban EconomistThe World Bank

SAR Countries Still at Early Stage of Transformation

Least urbanized region in the world with low urban shares.

Source: WB staff estimates based on WUP-2011 data

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0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Urban Share Growth Rate (2011-2030)

Urb

an

Sh

are

Gro

wth

Rate

(%

)

By 2030, 315 million people added to South Asia’s cities.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Urb

an S

hare

(%

)

Latin America and the

Caribbean

Europe and

Central Africa

Middle East and North

Africa

East Asia and Pacific

Sub-Saharan

Africa

South Asia

Urbanized share by Region (2011)

• From 5 now to 9 in next 10 years• Lahore will be added

3

High Concentration of Mega-cities

Source: Taubenbock et al (Feb 2012)

Strengthening of Agglomerations

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Formation of a Transnational Mega-Agglomeration

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Urbanization Process

Urbanization

City size and spatial structure

Crime, Grime, Disease & Congestion

Productivity, Skills, Jobs & Innovation

Outcomes

Prosperity Poverty Livability

Connectivity

Access to

markets

Governance &

financeAccountability, basic services

Urban planning

Land & affordable housing

Migration & SkillsAccess to jobs

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Access to markets

Access to land &

housing

Access to basic

services

Access to jobs

Connectivity

Hard & soft infrastructure improvements

PlanningIntegrated land

use & transportation planning which relaxes, rather

than exacerbates, supply constraints

Governance & Financing

Arrangements which create correct

incentives for efficient provision , & tackle issues of

horizontal & vertical fragmentation

Skills & MigrationAgglomeration economies are facilitated by human capital

accumulation & pull migration

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Main Challenges to Urbanization

Land Management is Critical to City Development

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• Urban planning uses greater granularity in zoning. • Fine-grained approach promoting mixed land-use.• Using land value to guide infrastructure investments.

Mumbai Metropolitan City- 603 sqkm

Singapore- 710 sqkm

Sprawl vs. Densification

New York City Karachi

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Using Zoning to Capture Property Value Gains

• Manhattan• focus on transit nodes • select catalyst sites for piloting

• Seoul• variations in FSI linked to location of metro stations

and network of main streets

• Mumbai• Increase proposed development charge from 8 to 15

% of property value• Expected revenue of Rs. 100,000 Crore (roughly

US$ 16 billion) over 15 years

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Pakistan’s Urban Corridor

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Intensifying Around Key Urban Centers

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Dominance of Karachi consistent with other Cities Across Asia

City/region Population (2007)

City Pop/ national pop

City GRDP/ national GDP

Seoul 9,800,000 20.8% 33.0%

Bangkok 12,000,000 17.8% 35.0%

Kuala Lumpur 4,800,000 17.4% 36.0%

Manila 11,500,000 13.0% 47.0%

Karachi 16,000,000 8.0% 20.0%

Ho Chi Minh City 6,000,000 6.9% 24.0%

DKI Jakarta 9,000,000 4.1% 18.0%

Mumbai 16,400,000 1.3% 6.2%

Shanghai 16,400,000 1.3% 2.9%

City is defined only as core only

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However, Smaller Cities are Becoming

Medium-sized Cities

Note: Calculations from 1998 Census and UNWUP.

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Large Cities Outperform Medium and Small Cities

• Fastest population growth

• Higher per capita incomes

• Lower poverty rates

• Bigger manufacturing shares

• Largest concentration of high-tech firms

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Informal Sector Very Dominant

• Large informal sector: many low productivity firms

• Low tax collection constrains public investment

• Worse problem in smaller cities

Note: Calculations, from Pakistan Labor Force Survey

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Need to connect medium and small cities to improve market potential

Source: Calculations based on 1998 census. Quintiles of market access

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Critical Elements for Urban Transformation

• Clearly articulated vision at national and city levels.

• Identification and implementation of catalytic investments within city.

• Detailed financing plan.

• Extensive stakeholder consultation.18

Pakistan is Well Positioned to Capture the Urban Dividend

• What do Pakistan’s cities need to do in order to meet the demands of their growing populations?

• How does the nationally articulated vision and strategy support city development?

• How will the local government structure be reformed to allow cities to effectively manage their transformation?

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Thank You!

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