Achieving Heights
Islamabad, being a thriving, business-minded capital, lies in the center of Pakistan’s growing urbanized scene. From the white-marbled Faisal Mosque to important landmarks, commercial property for sale in Islamabad , like the Blue Area, historical monuments, business centers, and whatnot, the twin city is known to be a central point for investors, businesses, tourists, and foreigners.
Considering the fact of being the federal capital, strategically located, and home to state-of-the-art developments, the city is expected to be the next financial hub of Pakistan.
Apart from this, the city encompasses environmental-friendly neighborhoods, well-designed structures, modern infrastructures, world-class public transport, and many more amenities, which help the city to attract more foreign investments, leading the city of heritages to become the financial capital of the country.
Islamabad – a future financial Capital of Pakistan
Financial Capital of Pakistan
Currently, Karachi is the industrial/financial hub, contributing to the country with the highest revenue. As per statistics,
“The most urbanized province of Pakistan and the Capital of Sindh, Karachi has an imperative role in the country’s developed demography. 30 % of national output and 20% of industrial output in Pakistan economy is dominated by Karachi which clearly depicts that the economic hub contributes towards Pakistan economy in a high proportion.”
Let us explore the reasons or the immediate factors that propose the city to be the financial hub of the country.
What makes a City Economic Capital?
Every country has a financial backbone that is vital to sustaining the overall growth of the economy; such capital cities help the country to build infrastructure for investment that drives entrepreneurial endeavors and the growth of multiple industries and communities.
A financial hub contributes to the sustainable development and financial literacy of the country, as a whole.
Current Financial Capital of Pakistan – Karachi
Statistically speaking, Karachi is the financial hub of the country. It generates more than 70% of the total revenue. This city of lights is a hub for Pakistan’s banking and financial services and is home to the State Bank of Pakistan.
Nearly all banks that operate in the county have their headquarters in the city. Karachi is also known to be the country’s premier industrial and financial center with an estimated worth of $190 billion (2021), which is the largest.
In terms of tax contribution, Karachi collects around 35% of Pakistan’s tax revenue, which generates 25% of Pakistan’s GDP.
In 2019, Karachi had an estimated GDP of $164 billion, out of which, half was customs duty and sales tax on imports; this amount was half of the total collections of the Federal Board of Revenue of the same year.
Currently, Karachi produces more than 30% of value added in large-scale manufacturing; according to the World Bank, Karachi is the most business-friendly city in Pakistan.
Unfortunately, the city is on the verge of losing its financial standing, let’s closely look at them.
The rising economic challenges of Karachi
These are the economic challenges, Karachi is facing, which may lead to the loss of the city’s financial credibility, if not fixed in a timely manner; according to the economist A.B. Shahid,
“Karachi is Pakistan’s economic engine, whenever it shuts, it affects the whole economy. Its taxes and industrial and services sectors feed the exchequer and its port being the gateway gives life to the rest of the country,”
From unplanned urbanization to excessive pollution, transport crises, ruler floods, over-population, water crises, poor sewerage systems, and a myriad of negligence and mismanagement… Karachi needs immediate attention – to retain its financial position.
Some of the over-arching issues in Karachi are;
Lack of Active Governance
Karachi, the hub of economic activities, is under population threat as the city is overcrowded with people, eventually, increasing the pollution (waste, noise, water, etc.) levels in the city. Topped with weakening governance and least to zero maintenance.
Since independence, the city’s infrastructure is not yet fully developed, looking at other major cities, like Islamabad, Lahore, Multan, Peshawar, etc., they have developed tremendously, with better roads, at least.
One of the major turn-offs for investors is the city’s infrastructure, which is deteriorating continuously, becoming difficult for citizens to commute; eventually, businesses and investors (local and foreign) would stop investing in the city and invest in developed cities, like Islamabad, Lahore, etc.
Weakening Law & Order Situations
The situation in Karachi has deteriorated over the period. The crime rate has accelerated – it’s at 54.87%, and the safety net of the city is less than 50%; the city is still at 106th number out of 250 crime-affected cities.
With rising mugging deaths in the city, the safety threshold is deteriorating, discouraging people to live in the city, and losing investors’ confidence. The rising safety concerns will eventually let people move to safe cities and do their businesses there.
Not only this, but the rate of real estate scams in the city is also rising – from unreliable property agents to fake/incomplete documentation (NOCs), incomplete projects, false claims and promises, multiple buyers, ownership frauds, impersonated gains, and whatnot.
These scams further discourage people from investing in Karachi, leading to the loss of the current financial standing of the city; scammers often trap young investors due to a lack of professional guidance, knowledge, and research.
Why Islamabad should be the Financial Capital of Pakistan
Islamabad, a city with the latest developments and home for foreign delegations and international visitors, is speculated to be the next financial hub of the country.
To support this idea, analysts have already shared some key reasons;
- Islamabad – Home to World-class Properties: Being already developed, the city hosts a myriad of state-of-the-art commercial and residential projects. There are many corporate towers/high-rises in the pipeline, attracting businesses and investors alike. It’s also expected that areas, like New Blue Area has shops for sale in Islamabad, will yield the maximum annual capital gain, up to 18% and highest rental return in the coming years.
- Islamabad – Least Polluted City of Pakistan: Due to the over pollution of cities like Karachi, Lahore, etc., people are moving towards the greener cities, for better lifestyle and of course, to earn better returns. Even investors are also moving towards cities with controlled population and improved infrastructure, as these help the proposition to yield better results.
- Islamabad – a city with Improved Transportation: To improve the inter-city and out-city movement, there are a lot of improvements going on, like the 11th Avenue, expansion of Islamabad highway, underpass at the Shakarparian Intersection, and interchanges across many intersections within the city and on Kashmir Highway.
The Future of Islamabad
Considering the latest developments and the future potential of the twin city, it would be wise to say that Islamabad can be a financial capital of the country.
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