INTERNATIONAL evidence shows that on average, an increase of 10 per cent in a country’s urban population leads to an increase in the per capita output by 30 per cent. Cities are open to people with different backgrounds and offer jobs and self-employment.

Dense cities are the centres for providing opportunities to the poor and promote domestic commerce at all levels. Currently in Pakistan, 78 per cent of the national GDP is contributed by the economic activity in cities. A focus on cities implies an improvement in local markets – including the markets for agricultural produce.

It is in cities where much of the rural products are bought and sold and where the major chunk of rural income is generated.

Wholesale and retail trade, markets for street-vendors, construction activity, storage and warehousing activity, hotels and restaurants, shopping malls, entertainment – all these activities (and more) create employment for the poor.

As such, through unfriendly zoning and building regulations, Pakistani cities cater only to the rich population, primarily housing for the rich. To change this trend, zoning and building regulations must become commerce and business-friendly. By allowing space for street markets, for example, not only will poor entrepreneurs and street vendors get the opportunity for business, cities will become more open to the poor.

Through amending building regulations and allowing high rises to be built, cost-effective apartment buildings can be built and large suburban type houses will be pushed outside city limits. Following these recommendations would lead to a construction boom – and jobs for the poor. Construction growth linked with the growth of commerce will allow space for the inclusion of women, youth as well as the demand for many new skills.

Dense urban clusters also promote entrepreneurship and innovation at all levels, if the market is developed. Proximity and density create large markets for goods and services; and in turn, large markets build social capital; allow interactivity; nurture innovation and entrepreneurship. Innovation occurs in dense clusters, where there is intense competition.

Also, reforming and strengthening institutions such as the legal and judicial framework, the civil service and the taxation system could provide an impetus to innovation and entrepreneurship – both employment generating growth drivers. As such, the aggregate of the programmes suggested could vastly improve the investment climate and reduce the cost of doing business, alongside creating employment.

The ‘Framework for Economic Growth’ prepared by the Planning Commission presents several new ideas and perspectives that we should take time to consider and reflect upon. Providing opportunities to the poor is at the forefront of this growth strategy. It is estimated that sustained economic growth at over seven per cent is required to productively absorb the workforce. If we do not think creatively about our cities and how they are the potential hubs of commercial activity and employment, we could be heading towards what the social scientists call. a demographic disaster.

Sana Shahid Ahmed is a consultant at the Planning Commission on markets and governance. sana.s.ahmed@gmail.com