Karachi faces economic losses

Posted: August 7, 2010 in Central Asia Online

By Zia Ur Rehman
For CentralAsiaOnline.com
2010-08-05

KARACHI — The wave of political violence and targeted killings in Karachi have crippled business and inflicted economic hardship on the city’s residents.

“I couldn’t go out to work … because of the prevailing riots in the city and the unavailability of public transport”, said Arshad Ali, a father of four. “Now my pocket is empty and therefore my children will sleep hungry.”

”]

More than 100 have died in riots sparked by the August 2 assassination of Raza Haider, a Muttahida Qaumi Movement (MQM) lawmaker. Local industries and businesses shut down August 3-4, and rioters torched dozens of shops, restaurants and vehicles.

Karachi, home to about 18m people, provides nearly 70% of the government’s revenue and accounts for a quarter of Pakistan’s GDP.

“Local markets have lost revenue worth more than Rs 2.5 billion in two days”, said Atiq Mir, head of the All Traders Alliance in Karachi. “Shopping centres and major markets of the city were affected badly as traders preferred to stay home.”

Karachi had been free of violence and was contributing heavily to the country’s weak economy, but now terrorists want to cripple Pakistan’s economy by fuelling ethnic and sectarian violence in the city, Mir said.

Violence has forced several established businesses to close permanently, he said. About 40% of businesses are on the verge of collapse, he said. Mir called on the government to restore peace to the city.

Sultan Chawla, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told media that Pakistan lost about Rs 15 billion on August 3 alone.

About 70% of the mill and factory workers who live in the restless areas of the city were not able to go to work, Chawla said.

But there are more long-term concerns for Karachi’s economy too.

“No foreign investors will come to Pakistan if local investors are disturbed and dissatisfied with the government response to violence in the city”, said Karachi Stock Exchange official Rizwan Ashraf. “Violence in Karachi affects market sentiments.”

The government should make tough decisions to curb the violence and let traders and business owners do their jobs, he said.

“We are trying hard to convince foreign investors to come here and many of them agree to, but the violent riots force them to pull back,” said Zubair Motiwala, the Sindh government’s advisor for investment.

Most of those killed in the recent wave of targeted killings were daily wage workers from Khyber Pakhtunkhwa.

More than 75 buses, public vehicles and trucks have been set ablaze by rioters since August 2, inflicting losses of about Rs 50 million, according to Karachi Transport Ittehad president Irshad Bukhari.

Transporters shouldn’t have to risk their lives because of the government’s failure to protect them, Bukhari said. The government should offer compensation for torched vehicles, he said.

“Transporters suffer very much in the violence because most of the transports including buses, mini-buses and trucks are owned by the Pashtun community,” said Mukhtiar Mehsud, a leader of the truck owners’ organisation.

Damage and closures have inflicted further losses on area fuel stations.

“There are nearly 400 fuel stations, and a fuel station in the city sells on average 10,000 litres of petrol and 5,000 litres of diesel (daily)”, fuel station manager Asghar Khan said. “The petroleum industry faces losses worth billions of rupees while the population of the city also faces the shortage of fuel”.

The violence’s total financial impact on the city may be incalculable, senior commerce journalist and analyst Wakeel Rehman said.

“We can’t calculate the exact loss to the country’s economy in case of violence or terror attacks on Karachi because it involves many factors. But any day Karachi closes, it loses many billions of rupees,” he said.

End


Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s