Building a Foundation: Poverty, Development, and Housing in Pakistan. (Perspectives)
Jacobsen, Kurt, Khan, Sayeed Hasan, Alexander, Alba, Harvard International Review
The ranks of the urban poor are rising in Third World countries. Most families arriving in cities are pushed into squatter settlements, where they suffer from shoddy housing, thugs, discrimination, poor infrastructure, sparse health care, insecurity of property, and unspeakably poor sanitation. More than one half of Asia urban poor--over one billion people--live in squalid shantytowns. While often seen as a spreading blight and an incurable nuisance, these vulnerable people can be transformed into a social boon. The UN Centre for Housing Development (Habitat) estimates that one quarter to one third of urban residents live in absolute poverty and contends that an active housing policy should be seen as a strategic economic and social investment that will generate large multiplier effects in backward and forward linkages and in productivity.
If development experts in Pakistan are viewing the urban housing crisis with renewed optimism, Tasneem Ahmad Siddiqui, the savvy chief of the Sindh Katchi Abadi Authority (SKAA) in Pakistan, should be credited for assembling a realistic and humane policy. The Sindh, which includes the cities of Hyderabad and Karachi, is the southernmost of Pakistan's provinces. A katchi abadi is a "temporary settlement," a euphemism for the local version of the slums mushrooming in Third World cities everywhere. Nearly one half of Karachi's five million people live in illegal settlements, and it is the Herculean task of Siddiqui's agency to "regularize" as many katchi abadis as possible by providing legal titles, upgraded building materials, and basic urban services.
The Plight of the Poor
Development, even when it goes according to plan, uproots rural populations who must fend for themselves against land speculators and crooked officials in cities. The Pakistani government, perennially riddled by corruption, is strapped for cash for the poor, and the private sector simply cannot be bothered. The few public-housing schemes of the late 1970s were milked dry by speculators or pounced upon by middle-class families buying plots as investments. At that time, the availability of land for indigent people was advertised in daily newspapers on a first-come first-serve basis, which was not as egalitarian as a one might imagine. "The local people were illiterate and the down payments were too big," explains SKAA organizer Jawaid Sultan. Speculators and crafty bureaucrats had an advantage, and local councils, easily influenced by powerful developers, frequently yielded to politically influential clients who did not genuinely qualify for plots.
The poor were not entirely prevented from gaining land, but they still faced challenges from "land grabbers" who contrived illegal leases for squatters, chartered water trucks, tapped electricity lines, and charged premium prices for these and other vital privileges. The poor, especially in the Third World, always pay more: their rent-to-income ratios, according to UN data, are considerably higher than those of people in industrial countries. According to an Oxford University Press report, poverty in Pakistan rose from 20 percent in the 1980s to 33 percent this year, and the refugees created by the Afghan intervention have helped to increase that percentage. In addition to mismanagement and corruption, critics point out that the International Monetary Fund's (IMF) structural adjustment programs since 1988 have hurt the poor by lowering aggregate demand for labor, cutting government services and subsidies, and limiting job opportunities.
Pakistan also employs a tax system with barely any effective income tax, extensive subsidies for the wealthy, and heavy dependence on regressive sales taxes. Consequently, there is a massive untaxed black market. Ironically, the TMF structural adjustment programs heavily cut tariff revenues and hiked sales taxes but still yielded a revenue shortfall that required even more borrowing. Land reform is unlikely, and as avid migrants crowd into Karachi seeking work, the population grows at a rate of 5 percent annually--almost twice the Third World urban average. …