*WASHINGTON: A new World Bank report has said Pakistan’s rapid urbanisationcould support the efforts to transform its economy.*
“The country is the most urbanised large country in South Asia, with 36percent of the population living in urban areas and urban centres whichaccounts for over half of Pakistan’s GDP,” it said.
According to the report, the pronounced youth growth, coupled withcontinuing rural-urban migration, provides a large labour pool. While untilthe late 1990s, much migration was towards Karachi, but the past 20 yearshave seen significant migration from smaller cities to larger cities inSindh, Khyber Pakhtunkhwa (KP) and Punjab.
“Some urban centres are showing emerging signs of functionalspecialisation. For instance, manufacturing, finance and high-tech sectorsare mainly concentrated in larger cities, whereas construction, mining andagriculture-related sectors are more prevalent in smaller cities,” said thereport.
The WB said the concentration of economic activities in urban areas broughtconsiderable benefits, it could also create congestion costs (traffic,pollution, price increases and crime) that could at times outweigh thebenefits of agglomeration, negatively affecting productivity and growth.
“Whether the agglomeration benefits outweigh the congestion costs willdepend on interventions to maximise the benefits and to manage and mitigatethe costs. Digital development holds great promise as a driver ofstructural transformation,” it said.
The World Bank said the proliferation of the internet supported structuralchanges through two channels.
First, the internet is creating new types of jobs, work arrangements andopportunities for entrepreneurship, as it cuts search costs and marketentry barriers, and makes it easier for workers, employers and customers tofind each other, irrespective of their locations.
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Digitally enabled work can be inclusive, as services including delivery,ride-sharing, or housework tend to employ informal workers in urban andsuburban areas of the country, and flexible work arrangements can encouragegreater female labour force participation.
Second, modern technology can enhance productivity in traditional sectors,and thus trigger structural transformation. In agriculture, for instance,digital technologies can overcome information barriers and open marketaccess for many smallholder farmers, increase technical capacity throughnew ways of providing extension services, and improve agriculture supplychain management.
Pakistan has already derived some of the benefits from digitization, butthe scope for further growth remains.
Pakistan has already derived some of the benefits from digitization,however there remains the scope for improvement with respect to theinclusiveness of digitally-driven growth.
Demand for access to the internet has increased rapidly, from 6 millioninternet subscribers in 2013 to an estimated 48 million in 2017 (PakistanTelecommunication Authority).
