Pivoting Toward Sustainable Urbanization in Pakistan

Soaring population. Recent projections estimate Pakistan’s population will exceed 400 million by 2050, making it one of only eight countries projected to account for over half of the world’s population increase by that year. By 2030, the urban population is expected to reach 99.4 million, or 40.7% of the total population, intensifying pressure on cities and exacerbating deficits in urban infrastructure and services.

Hazardous urban sprawl. The rapid growth of Pakistan’s urban population has led to a commensurate and hazardous urban sprawl. Illegal development and informal settlement, which often bypass planning rules and building codes, result in substandard living conditions, disrupt city functions, and degrade the urban environment.

Failing public services. Severe shortages in urban infrastructure and services have persisted, contributing to the deterioration of quality of life and urban environment in many cities.

• Housing. The average annual supply of 150,000 new urban housing units falls significantly short of the 350,000 units needed. The deficit, totaling about 10 million housing units as of 2018, has led to 57% of urban residents living in informal settlements under overcrowded and squalid conditions.
• Water supply and sanitation. Despite improvements, services remain inadequate. As of 2022, 43% of the urban population lacked access to a safely managed water supply, and 18% lacked access to basic sanitation services. Most underserved groups reside in informal settlements and city peripheries.
• Solid waste management. While access has improved, services remain limited and inefficient. In 2020, 67% of the population reported no garbage collection system, down from the 76% in 2014. However, this indicates that two-thirds of the population still resorts to open dumping and burning of waste.

Weakening economic productivity. Pakistan’s economy, already in decline before the COVID-19 pandemic, has been marked by boom-and-bust cycles. Gross domestic product (GDP) dropped to 0.9% in 2019 from 3.1% in 2018 and 6.1% in 2017. While it bounced back to 5.8% in 2020 following government’s expansionary fiscal and monetary policies, it again plummeted in 2022 and 2023. Although there are signs of modest recovery for 2024, with the economic adjustment program supported by the International Monetary Fund and other development partners, the macroeconomic outlook remains uncertain.

Climate change impacts. The costs of climate-related disasters are substantial and rising, with Pakistan ranked eighth among countries most affected by extreme weather events in 2000 to 2019. Suffering one of the worst floods in its history, the estimated cost of the July–August 2022 disaster was pegged at $30 billion or about 8% GDP loss in 2022, spilling over to a further 2.2% GDP decline in 2023.

Urban governance issues. Many urban development and management issues stem from the partial devolution of powers.

• Devolution issues. The 2010 18th Amendment to Pakistan’s Constitution mandated the devolution of powers from the federal to the provincial governments, and further decentralization of fiscal, political, and administrative authority to the local governments. However, the partial implementation has led to a complex urban governance model with unclear mandates, overlapping functions, and competing interests. The lack of adequate funding and authority for local governments also hampers the effective delivery and management of services.
• Governance fragmentation. The complex governance structure and differing approaches to devolution, with multiple stakeholders and unclear responsibilities, has resulted in inefficient service delivery and lack of accountability. Recent provincial amendments to the local government acts further complicate urbanization and the delivery of municipal services and other urban governance functions.

Urban planning challenges. The absence of a national urban policy and institution has reinforced weaknesses in urban governance.

• Fragmented approach. The absence of a national approach to urbanization has resulted in a patchwork of trial-and-error approaches that saw most provinces develop their urban-related policies and/or sector strategies in silo. Precluding possible synergy, this has also limited the potential for learning and innovation among local governments.
• Complex procedures. Despite the evolution of urban planning practices (e.g., land use plans, master plans, zoning plans, development and structure plans), the complexity of the approval process has resulted in poor compliance with planning regulations at the local level.
• Land use management. Responsibility for land registration and acquisition lies with the provincial governments, while approval and enforcement of spatial, zoning, and land use plans are delegated to the municipal or district local governments. In the absence of a master plan, local governments can establish their own land use plans and regulate land development approvals through local bylaws and regulations. This approach often results in inconsistent and ineffective land use management.
• Local development authorities. In larger cities, local development authorities are responsible for preparing master plans and implementing and regulating spatial, zoning, and land use plans. Although these authorities are intended to operate under the municipal or local governments, they often lack binding service agreements and subject to political influence.

With the mounting challenges of urbanization, Pakistan needs to direct greater policy, planning, and investment support to transform its cities into safe, resilient, and livable spaces, and provide better income, education, and livelihood opportunities.

The assessment report recommended that Pakistan implement a new urbanization model to address the challenges undermining the economic and social benefits of urban agglomeration. The new model should:

• internalize the economic, environmental, and social benefits associated with higher levels of agglomeration;
• strengthen planning and evaluation capacities that extend vertically (clearly define governance responsibilities), horizontally (address multisector service requirements), spatially (optimize land use), and temporally (invest in development needs); and
• steer proactive institutions that underwrite the social and economic well-being of urban citizens with the public services and infrastructure necessary to sustain growth without detrimental social and environmental consequences.

Establishing this model requires progressive reforms in urban governance and a proactive urban planning framework to replace the current reactive approach to urbanization.

Urban governance

The report calls on provincial governments to:

• bridge the gap between local government acts and their implementation, and
• establish a consistent vertical and horizontal urban governance model with the following designation:
  • Provincial government: Responsible for establishing the laws, policies, regulations, and standards for all urban development subsectors, and regulating failure through oversight, spot checks, and clear‑cut reporting and accountability systems.
  • Local government: Handle the licensing or contracting of urban service providers (public or private; locally, provincially, or federally owned) and ensure compliance with provincial laws and pieces of legislation.
  • Service providers: Deliver quality services, generate revenues, invest in service improvements, and return any dividend to the utility owners.
  • Independent commissions: Resolve discrepancies between legislation and practice, focusing on local government, local government finance, and elections.

Urban planning

The report recommends the implementation of a sustainable urban planning measure, with the following approaches:

Forward-looking

• Multisectoral planning. Allocate land, capital, and labor across boundaries to maximize social, environmental, and economic returns.
• Reinterpret urban spaces. Reduce negative externalities by integrating housing, energy, transport, water, health, education, recreation, social services, and environment considerations. Channel land value to public services
• Increase public revenues from urban land development and user fees (e.g., road tolls and metered water) to enhance and expand services.

Redefine land allocation and development approval

• Assess urbanization trends. Regularly review changes, such as increases in housing and transport densities, decreases in green spaces, and evolution of business areas.
• Stage development planning. Divide large-scale development projects into smaller, more manageable stages, outline the division of responsibilities (whether municipality or developer) in the provision of public, environmental, and social services in accordance with local bylaws, zoning regulations, and the nature of the development.
• Coordinate master plans. Develop and routinely update multisectoral urban master plans to improve compliance and timely execution.

Promote mixed-use, pedestrian-friendly, and vertical urbanization

• Create public and community spaces. Accommodate a broad range of urban activities, such as commercial, cultural, environmental, and educational.
• Encourage investments. Incentivize high-rise, inner-city regeneration projects and the vertical redevelopment of informal settlements.
• Implement property developer policies. Promote investments in affordable housing, energy efficiency, and green spaces.

Asian Development Bank. 2024. Pakistan National Urban Assessment: Pivoting Toward Sustainable Urbanization.