RayKalm
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Karachi contributes Rs 16 billion to GDP a day | The Nation
KARACHI - A bloody wave of violence sweeping Karachi has claimed hundreds of lives this year, and experts say it is also taking a punishing financial toll on the city that is Pakistans economic heartbeat.
Pakistans biggest city has escaped the worst of the four-year Islamist bombing campaign that has plagued other parts of the country, but it is wracked with crime and political and ethnic bloodshed.
Last year nearly 1,800 lives were lost as drug, land, gun and extortion mafias linked to ethnically-based political parties threatened to plunge the city of 17 million people into urban anarchy.
More than 300 people have been killed in violence in Karachi in the last three months, according to the Human Rights Commission of Pakistan.
With each political or sectarian killing, parts of the city go into lockdown as armed men take to the streets seeking reprisals, prompting residents to flee to safety and shops, markets and schools to close.
Ateeq Mir, the chairman of the Karachi Markets Alliance, said the city was closed for six full days last week when at least 24 people were killed in violence and the Muttahida Qaumi Movement (MQM), the citys main political party, called a day of mourning for a slain activist.
Our traders have lost the business of more than Rs 20 billion ($220 million) while our industrialists lost at least Rs 45 billion ($495 million), he told AFP.
Karachi is vital to Pakistans economy, contributing 42 per cent of GDP, 70 per cent of income tax revenue and 62 per cent of sales tax revenue, but Mir compared the situation to the countrys insurgency-wracked northwest. Karachi has become an urban Waziristan where the government has lost its writ, he said.
The city is divided among several areas, each is governed by the dominant militant mafia.
Economist A.B. Shahid said Karachis contribution to GDP amounted to around 16 billion rupees a day, and its daily tax revenues to two billion.
Karachi is Pakistans 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, he told AFP.
If one wants to cripple Pakistans economy, one should do nothing but to get Karachi paralysed.
Market analysts say disturbances in Karachi are affecting foreign investment as well.
Most multinationals are based in Karachi, and it has a negative impact when their bosses watch pitched battles on their TV screens in the streets of Karachi, said Mohammad Sohail, the head of Topline Securities brokerage.
He said foreign investment in Pakistan stood at $5.4 billion four years ago, which shrank to $1.6 billion last year and is expected to further reduce to a maximum of $1 billion in the financial year ending on June 30.
Officials admit growing security concerns and targeted killings tarnish Karachis attraction for foreign investors and risk driving business away.
The American raid that killed Osama bin Laden in the town of Abbottabad last May was another punishing blow to Pakistans depleted image, raising renewed questions about whether anyone in authority had colluded with Al-Qaeda.
