Supporting Jobs & Competitiveness in Punjab: A Strategic Spatial Approach
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1 Supporting Jobs & Competitiveness in Punjab: A Strategic Spatial Approach Fatima Shah, Fuad Malkawi, David Mason Pakistan Urban Forum December 6, 2015 Lahore
2 Overview of presentation Current urban context in Pakistan World Bank-GoPunjab Partnership A spatial planning approach A way forward for Punjab 1
3 Pakistan not reaping full benefits of its rapid urbanization Urbanization and GDP per capita are correlated Based on urbanization rate alone, expect Pakistan s GDP per capita to be nearly 40 percent higher Some regional comparators are performing better Source: WDI 2
4 Pakistan s urban growth exceeds other countries in region Note: UNWUP 3
5 Pakistan s urban population will reach 120 million in 2030 Note: based on UNWUP and LFS. 4
6 Growth concentrated along an urban economic corridor 5
7 Growth intensifies along same urban economic corridor 60% of Pakistan s GDP from Punjab 6
8 Positive relationship between population & economic growth is strongest in Punjab 7
9 Overview of presentation Current urban context in Pakistan World Bank-GoPunjab Partnership A spatial planning approach A way forward for Punjab 8
10 Punjab Growth Strategy supported by five sector plans Objectives by % annual GDP growth Increasing Private Sector Investment from 8 to $17.5 billion 1 million quality jobs every year Increase export by 15% per year Achieving all Millennium Development Goals by million skilled graduates Narrowing Security gap with regional neighbors Overcoming Energy shortages Productivity enhancement Gender Mainstreaming Export led growth Equitable Regional Development Human Capital and Skills Institutional Reforms and Governance 9
11 Manufacturing in Punjab: important and growing SOURCE: WB calculations, based on pooled LFS ( vs ). Location quotients measure of employment concentration in particular sector relative to national employment in that sector (higher number, greater concentration) Manufacturing a major growth driver for Punjab Employment in agriculture, although substantial, becoming less important 10
12 Location Quotients: Cities in Punjab (2011) Manufacturing important for most cities, with particularly large relative employment shares for Faisalabad, Gujranwala, Sialkot, Lahore and Multan 11
13 Change in NL intensity: rapid growth in city clusters, corridors Lahore-Faisalabad-Sialkot Multan-Muzaffargarh 12
14 World Bank-GoPunjab partnership: technical assistance Two-year partnership supporting PGS; developing an approach to Jobs & Competitiveness Broad set of areas covered through technical assistance J&C TA Pillars Policy Reform Areas Business Environment Spatial Development Fiscal Space & Governance Access to imports for exporters Access to power Business regulations, investment support Contract enforcement Agribusiness policy Irrigation water charges Mining policy Access to skills Regional spatial planning Access to industrial land PPPs Land use & building regulations Land records & registration Property tax Urban water Sales tax Tax payment facilities Governance 13
15 World Bank-GoPunjab partnership: proposed Program for Results Business Environment Reforms Spatial Development Ease of Doing Business Access to employment and working conditions Investment promotion and publicprivate dialogue Provincial spatial strategy reflected in improved public investment management process Support to industrial infrastructure (industrial estates in the right places and with common facilities such as central effluent treatment plants) SME Development Cluster support services Improved quality of training provision for industry 14
16 Urbanization: understanding the magnitude Population of Punjab expected 139 million by % will be urban Urban space to accommodate approximately 40 million new urban residents in the next 15 years equivalent to building one city the size of Faisalabad every year Including all infrastructure to support urbanization and industrial development 15
17 The infrastructure gap: Investment needs for physical infrastructure in Punjab Rs 1,000 bln per year Actual spending is one-third of need Closing the gap: Make most efficient use of land & infrastructure investment Leverage private sector through public-private partnerships Develop Province level spatial framework Integrate investments in transport connectivity, industrial estate siting, and urban development Invoke public investment management process to support strategic investments identified through spatial framework Source: P&D Directorate of Monitoring and Evaluation 16
18 Current weaknesses in integrated public investment planning sectoral allocations promote silos Industrial land is limited and industrial estates are poorly sited Only 6.5 percent of Lahore is zoned for industrial use Only 7 of 22 of PSIC industrial estates have occupancy of 60 percent or more FIEDMC estates 40 percent occupancy Lack of supportive on-site infrastructure and coordination with off-site infrastructure investments Reliable power sources Combined effluent treatment plants for export requirements Housing, services, transportation networks Lack of support for firms and SMEs Investment promotion services Cluster development and training for new workers Few women in manufacturing jobs 17
19 Investment opportunities in transport connectivity, industrial estate siting and urban development need to be coordinated with national plans and initiatives such as the CPEC. 18
20 All population figures are metro areas Spatial footprints compact cities, more efficient infrastructure investments Atlanta 5m Barcelona 5m London 13m New York City 19m Lahore 9m Mexico City 21m 19
21 Lahore Built up area increase at least 3.55% per year *Between 2005 and Source: Urban Unit 20
22 All population figures are metro areas Spatial footprints Atlanta 5m Barcelona 5m London 13m New York City 19m Lahore 9m Mexico City 21m 21
23 Spatial footprints 22 Illustrative simulation of Lahore footprint in 2030 at current peri-urban density
24 Overview of presentation Current urban context in Pakistan World Bank-GoPunjab Partnership A spatial planning approach A way forward for Punjab 23
25 Spatial planning definition Arrangement of public investments and activities in space Ordering of investments and support for urban and economic development according to spatial rather than sectoral logic Identification of existing geographic, economic, historical and social advantages Orders short and long term needs specific to local and regional contexts Provides framework for assessing opportunities and costs of alternatives Utilizes a participatory approach with multiple interests and stakeholders to determine needs Is not predictive or directive but prospective 24
26 Understanding spatial planning Spatial Planning Benefits A spatial planning approach is used to assess and order environmental, economic and social objectives CASE: KOREA Used spatial planning to harness urban development for economic growth Strategic identification of growth areas with nascent manufacturing potential Financed key infrastructure needs to support growth (e.g. road and rail connections, water, sanitation) Coordinated siting of industrial estates It provides a framework for rationalizing and sequencing public investments through a spatial lens in order to meet these goals
27 Understanding Spatial Planning Spatial Planning gains importance in a decentralized system to coordinate between the various organizations that provide services at the local level. Spatial plans are prepared at different levels; national, regional, and local. Each level considers the context of the higher level. Spatial planning can give advice about the kind, size, location and timing of an infrastructure project. It is faster and simpler than past practices; e.g. sectoral planning The Kingdom The Region National Spatial Development Strategy Saudi Arabia The City The Residential Community 26
28 Ireland spatial strategy C o r e S t r a t e g y CASE: IRELAND The National Spatial Strategy of Ireland sets out how Ireland can be spatially structured and developed over a period of twenty years in a way by targeting strategic centers with the potential to be drivers of development at national level and within their own regions, and by including county towns, smaller towns, villages and rural areas in this process, a dynamic urban and rural structure can be achieved. Summary of Ireland s spatial policies: - More efficient Greater Dublin Area - Strong Gateways in other regions - Hubs - County and other town structure - Vibrant and diversified rural areas 27
29 Understanding spatial planning H u b s, G a t e w a y s a n d A c t i v i t y C o r r i d o r s Gateways (international importance) and Hubs (national importance) are defined in several Spatial Strategies but with a different focus: Ireland: making regions competitive according to their strength and not against one another Australia: ensure cities globally competitive, productive, sustainable, livable, socially inclusive and well placed to meet future challenges and growth Corridor development should be pursued as a stimulus to economic growth in the Province. 28
30 SCOTLAND MALAYSIA 78,387 km 2 5 million 329,847 km 2 30 million Punjab: 205,344 km 2; 100 million
31 Indonesia spatial strategy C a s e S t u d y - S p a t i a l E c o n o m i c D e v e l o p m e n t F r a m e w o r k CASE: INDONESIA Indonesia issued a 15-year master plan to accelerate and expand national economic development. The plan constitutes six economic centers. The central government made a strong effort in increasing the infrastructure investment as a main priority towards strengthening the connectivity. The nominal value of investment has increased for almost eight fold by eight years. 30
32 Connect hot and cold growth centers: NEC Expand rail service to underperforming cities Expand job markets and access to lower-cost housing Focus investments around station areas - TOD Future Moynihan Station West Hub on the NEC Hot and Cold Index of the Northeast: U. Penn 2004 Source: RPA 31
33 Vietnam 332,698 km2 90 million 32
34 Overview of presentation Current urban context in Pakistan World Bank-GoPunjab Partnership A spatial planning approach A way forward for Punjab 33
35 A proposal for Punjab World Bank support to GoPb for improving public investment planning and support for industrial estates companies Leverage economic growth from efficient urban growth Improve connectivity and logistics Identify and support agglomeration and cluster economies Spatial strategy to coordinate and align public investments over 20 years across sectors Supportive program of capacity building and technical assistance for local governments and line ministries to develop and implement strategy A framework for industrial estates companies and the private sector to develop more accurate studies and assessments for specific industrial estate investments 34
36 A proposal for Punjab - spatial strategy The Provincial Government of Punjab should embark on the preparation of a Provincial Spatial Development Plan with the following features: Intent Coherent planning framework for Punjab for the next 20 years Strategy options for socio economic development & prepare comprehensive spatial & land use plans Comprehensive, feasible optimal, relevant, flexible, and translatable Aim Help prioritize and coordinate public investment decisions in industrial sector in terms of: Location of industrial estates Investments in large-scale infrastructure projects Municipal infrastructure investments 35
37 Integration Stage Implementation Investment Framework Scope and phases of activity Data and Geographic Information Systems - Topographic - Environmental - Demographic - Economic activity - Policy and Legal - Land uses - Utility networks - Public facilities - Open public spaces - Solid waste Management - Development patterns - Building stock Core Strategy for Punjab Province Spatial Portrait Defining Issues Spatial Vision Spatial Objectives Spatial Policies Consultation Process Core Strategy Approval Spatial Economic Dev. Framework that includes: - A Proposal for Industrial Nodes & Development Activity Corridors - Identification of 10 Cities and key investment priorities for them - Connectivity and Infrastructure Plan, including China Pak Corridor - Industrial development plan that identifies economic cluster areas Integrated Strategic Development Framework - Infrastructure & capacity info. - Local dev. programs - Public & private Investment - Land use decisions Local Spatial Development Plans Alternatives Land Use Plans Zoning Plans Infrastructure Project phasing Implementation Tools Assessments/ Feasibility Phase I Phase II Phase III Phase IV Phase V 36
38 Punjab Spatial Strategy Outputs Core Strategy produced through a consultative process 10 cities prioritized by economic development potentials Amended Land use rules and building regulations (legislative changes) Implementation Plan for the Punjab Spatial Economic Development Framework Spatial Economic Development Framework Industrial development plan that identifies economic cluster areas Institutional framework for coordinating land use planning Projects and public investment programs needed to achieve spatial plan Connectivity and infrastructure plan, including the China- Pakistan corridor Guiding framework for prioritizing infrastructure investment Institutional & legislative framework that identifies organizations & their roles Capacity Enhancement Program 37
39 A Planning System for Punjab L i n k i n g S p a t i a l F r a m e w o r k s T o C a p i t a l I n v e s t m e n t Collaborative framework involving multiple stakeholders across levels of government and sectors Support and capacity building program to enable development of spatial framework Coordination of priority investments to leverage regional or locational advantages Linking spatial framework to current PC2, ADP, and MTDF processes Prioritization of budgeting for projects in spatial framework 38
40 A Planning System for Punjab L i n k i n g S p a t i a l F r a m e w o r k s T o C a p i t a l I n v e s t m e n t S p a t i a l D i m e n s i o n o f D e c i s i o n M a k i n g 39
41 A Planning System for Punjab Integration of Spatial Planning in LG Planning Process Investment programming Instruments of Spatial Planning within an Integrated LG Planning Process Strategic Planning GUIDELINES FOR LOCALIZATION OF OTHER PUBLIC AND PRIVATE SECTOR INVESTMENTS/ACTIVITIES Budgeting Spatial Strategy SPATIAL STRATEGIC DEVELOPMENT FRAMEWORK LG Multi-year rolling investment program Annual Operating Plans LG Budget LOCAL PLANS AND REGULATORY INSTRUMENTS OF SPATIAL PLANNING (Zoning and Building Regulations) Property taxation impact 40
42 Linking the Spatial Strategy with Local Government Planning Local governments are key implementation entities for planning Strategy will promote coordination in land use and public investment among cities Reduced duplication/redundancy of public investments Better identification of local needs Improved efficiency from location of shared public services (e.g. schools, hospitals etc) Improved connectivity between cities Alignment of city level master and community plans with regionwide priorities Bottom-up as well as top-down planning 41
43 Thank you! 42
44 43 ANNEXES
45 Sindh Province: Dominant in Finance, Relatively Declining in Manufacturing SOURCE: Authors calculations, based on pooled LFS ( vs ). Finance and real estate: rapid growth, but still a very small portion of total employment. Agriculture is a growth driver; employment in the sector is large, increasing over time. 44
46 Khyber Pakhtunkhwa: Declining Role of Agriculture, Increasing Importance of Manufacturing SOURCE: Authors calculations, based on pooled LFS ( vs ). Agriculture is a very important sector in K.P., but it is becoming less important over time. Potential growth sectors: construction, transport and communications. 45
47 The Continuing Importance of Agriculture in Balochistan SOURCE: Authors calculations, based on pooled LFS ( vs ). Agriculture dominates; other sectors are small and becoming less important over time. 46
48 Location Quotients: Cities in Sindh (2011) Karachi has a very large relative concentration of manufacturing, public administration. Especially central for finance and real estate. Hyderabad also has a large concentration in finance and real estate. Trade (including wholesale, retail trade) and tourism (which includes employment in hotels and restaurants) have large relative employment shares for all of Sindh s cities. 47
49 Location Quotients: Cities in Balochistan and K.P. (2011) Large concentrations of employment in public administration for Provincial capitals (Peshawar and Quetta). Manufacturing concentrations are not as large as cities in Sindh or Punjab. Kohat: smaller than national share of employment in manufacturing. Limited coverage from LFS prevents us from providing similar statistics for more cities. 48
50 Significant Variation in Economic Growth within Pakistan Tehsil-Level Growth Rates, Annualized ( ) Substantial variation in economic growth both within and across provinces. Fastest growing provinces: Punjab and Sindh Fastest growing cities: Rawalpindi, Multan, Bahawalpur Slowest growing cities: Karachi, Faisalabad, Khairpur, Sargodha Slowest growing provinces: Balochistan and K.P. 49 SOURCE: Authors calculations.
51 Market Access and Spatial Clusters Appear to Drive Growth Growth is concentrated along several clusters Map of Population Market Access Growth is driven by access to markets, which is produced by proximity and access to transport infrastructure 50
52 Compact cities allow for more efficient public investments 51
53 Planning hierarchy Economic Growth Strategy Funding allocation Regulation Division Spatial Development Framework Associates growth strategy and location Sets criteria for sector infrastructure investments Defines system of cities Enabling regulation defining who does what to implement SDF. Clarifies boundary and functionality overlaps Operationalizing the SDF Coordination between cities, towns and rural areas Cities City-wide planning (i.e. Master Plan, Detail /Partial Development Plans); enforcement Towns Town-wide planning (i.e. Outline Development Plans); enforcement 52
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