Urban Engines or Elite Enclaves? A Reflection on PIDE’s Insights

Cities have historically been engines of economic growth, fostering innovation, cultural development, and human progress.[1] However, in Pakistan, cities like Islamabad and Lahore have become victims of state capture and urban sprawl, preventing them from reaching their full potential as drivers of economic prosperity. This brief presents a reflective analysis of Pakistan Institute of Development Economics-PIDE’s discourse on state-captured land in Pakistani cities. It explores the insights and implications of PIDE’s findings, examining how state control over urban land affects development and economic growth. Based on findings from the PIDE, it is evident that state-controlled real estate and inefficient governance are key factors stifling urban development and innovation.

The current economic discourse in Pakistan, as argued by Dr. Nadeem ul Haque, tends to rely on macroeconomic figures while ignoring deeper systemic problems, particularly those relating to governance inefficiencies. I resonate with this critique. Our economists, while busy advocating for taxes and subsidies, often fail to address fundamental issues like reckless government borrowing, unsustainable fiscal policies, and most notably, the ineffective governance of cities. The superficial focus on balance sheets without addressing productivity, innovation, or reform within urban environments keeps our cities stagnant. This stagnation is reinforced by policies that are reminiscent of the colonial era, as noted in PIDE’s discourse on the need for decolonizing urban spaces.[2]

The term “Plotistan” often used in PIDE to describe Pakistan, highlights a troubling issue: the controversial practice of allotting subsidized land to bureaucrats, judges, and other government officials.[3] Nonetheless, the behaviour of citizens is found to be the same as anyone who earns money, prioritizes a plot to purchase at first. This exposes a deep-rooted malpractice in Pakistan’s governance. It’s shocking that, in a country where most people struggle to afford a piece of land to build a home, prime plots are handed out to a privileged few at absurdly low prices. This practice, reminiscent of colonial-era favoritism, is not only unjust but perpetuates inequality.[4] The dominant form of housing in Pakistan, the kothi structure—single-family homes on large plots—has also contributed to the stunted growth of cities.

The colonial legacy in city planning has severely restricted space for commerce and investment, prioritizing elite suburban living while neglecting the development of modern urban infrastructure. The colonial state, followed by the bureaucracy and military, preserved these exclusive colonial habitats, hindering organized density, commerce, and mobility in city centers. This restrictive zoning forced urban growth into informal sectors through encroachments, leading to cycles of litigation and demolitions. While suburban sprawl expanded for the elite, city centers remained dominated by mansions and clubs rather than the mixed-use, high-rise development seen in global cities, contributing to the unmanageable sprawl of modern urban areas.[5]

Unlocking State Captured Real Estate – Case study of Islamabad

The most glaring example of urban inefficiency is Islamabad, where vast amounts of valuable land are underutilized. According to a PIDE report, prime urban spaces are captured by government housing for bureaucrats, which locks up immense economic potential. This inefficient allocation of land comes at an enormous opportunity cost amounting to PKR 31,712.4 billion (USD 114.9 billion) which is approximately 34% of Pakistan’s GDP. The opportunity cost of such land use is staggering. If rezoning and monetization of these spaces were pursued, PIDE estimates that Pakistan could unlock investments worth PKR 16,228.8 billion (USD 58.8 billion) and generate rental incomes and taxes of approximately USD 1.7 billion each. These numbers highlight just how much potential is locked away under bureaucratic inefficiencies and elite privileges. The current state of Islamabad’s land use highlights a broader national issue—our cities are not functioning as they should, primarily due to the mismanagement of resources and the protection of elite interests (Haque. N. U., Aslam. A. M. & Qasim. A. W., 2024). The statistics observed are found to be significant and are compiled below.

Table 1 Summary of Key Metrics for Public and Government Land in Islamabad, PIDE 2024

[1] See. Haque. N. U. & Nayab. D., (2020). Cities – Engines of Growth, PIDE Publications.

[2] See. Haque. N. U, (2023). Decolonising the City for Sustained Development: Land, Commerce, and Real Estate. PIDE’s Discourse Magazine 2023, page 209-213.

[3] See. PIDE’s webinar brief 88:2022 Plotistan Subsidized Land giveaways and Public Land Management in Pakistan.

[4] See. Mehmood. S., (2021). PAKISTAN OR PLOTISTAN? Originally Published in DAWN on September 24, 2021.

[5] See. Haque. N. U., (2020). CONTEXTUALIZING PAKISTAN’S CITIES. Pakistan Institute of Development Economics, Writings of Nadeem ul Haque, Edited by Zoya Ali, The Opportunity of Dead Capital, Pg. 36-40.