In Karachi, a first world economy and sociology but with a third world wage and political structure

Pakistan’s inflation and recession are taking place at a time when the older squatter colonies have been consolidating and such colonies constitute the majority of informal settlements.
These are no longer purely working-class settlements and the younger generation living in them is overwhelmingly literate. Many have become doctors, engineers, college teachers, bank managers and white-collar workers. Many of the small workshops and looms that were established by the first generation of entrepreneurs and artisans, with support from middlemen, have now developed direct links with the formal-sector industries and exporters whom they service. Similarly, schools (which started out as informal ones) have developed links with NGO and government support agencies, and some health clinics have started to access government facilities for population planning and immunisation.
Interest groups have organised to present their claims and protect their gains. There now exist vocal transporters’ organisations, loom operators’ associations, neighbourhood groups, sports and cultural clubs (that manage to access government funds) and hawkers’ associations.
Almost every informal activity sector now has an organisation registered under the Societies Act and, increasingly, these organisations are being led by second- or third-generation city dwellers, who have broken with their rural culture and background. They are better educated than their parents or grandparents and more comfortable dealing with those in positions of power. Instead of seeking access through middlemen and political-party touts, they approach the establishment through the power of their organisations which, increasingly, have yearly audits and elections.
As a result of the changes mentioned above, there has been a change in lifestyles, supported by the communications revolution. Nuclear families are replacing joint family systems. Clan and tribal organisations that the migrants brought with them have ceased to be effective and are being replaced by new community organisations or by a dependence on state institutions.
The communications revolution has made television and video important entertainment tools. Television is the main source of information for the vast majority of Karachi households and more than 50 percent of them have access to some form of cable television.
Thus, video shops and cable operators, all too expensive in the formal sector for the lower- and lower-middle-income populations, have become a necessity.
Informal enterprise has made all variety of entertainment and news channels available now in homes in all low-income settlements in Karachi and in the tea shops and eating places located within them. This has brought about a clash of values and cultural confusion.
It has also brought about a generation gap, which seems unbridgeable and is one of the major reasons for an increase in honour killings of women in first-generation urban families. Vocabularies have also changed. Words of respect for elders or for those from a higher class have been substituted by “uncle” and “aunty”, and those too in the English-language equivalent. The whole feudal vocabulary, which the migrants had brought with them, has simply vanished with the new generation.
Liberalisation and the communications revolution have also brought the corporate culture to Karachi. There is a great demand for information technology professionals, operators and technicians, not only for the local market but also for employment abroad. Training for these professions is provided by both government and private institutions. In the case of government institutions, this training is affordable to low-income groups, but is on too small a scale to service the demand. As such, only those who are exceptional students can get into government institutions. Private institutions are far too expensive and only the rich can afford them. Thus, a large gap has been created between demand and formal sector supply.
The corporate culture has introduced an affluent nature to the city that was previously unknown. Golf clubs and various recreational and cultural facilities have been developed which are sponsored by companies for their clients, employees and for advertising purposes. Unlike before, these activities take place in new locations, in elite areas or in five-star hotels, and not in municipal or public buildings in the inner city. As a result, the inner city as a space for multi-class entertainment is dead. These corporate-sector-promoted activities and the glamour and pomp that surround them are in sharp contrast to the physical and social conditions in lower- and lower-middle-income settlements. There is an increasing feeling of insecurity among the promoters of these activities and so they, and the corporate-sector employees and clients, are surrounded by security systems and armed guards. This is in sharp contrast to the Karachi of the pre-liberalisation period.
Liberalisation has also meant the introduction of fast-food chain outlets and the popularisation of various consumer items. Huge advertisements, colourful and well-lit, dominate the urban landscape and dwarf badly-constructed and poorly-lit businesses and homes. New post-modern buildings with smart interiors, belonging to the corporate sector, stand in sharp contrast to the sedate government buildings of the previous decades. As a lot of young people from Karachi’s informal settlements work in this environment, ties, blue or white shirts and the “corporate haircut” are becoming common phenomena; also, everyone knows what a credit card is and wishes to acquire one.
This is really the emergence of a first world economy and sociology, but with a third world wage and political structure. It is the emergence of new aspirations related to consumerism and the desire to belong to the “contemporary” world as portrayed by the media but without the means of achieving these aspirations and desires through formal institutions and processes. Thus, the most important role (and it is a new one) that the informal sector is trying to play today, and is likely to continue to play for the foreseeable future, is helping to bridge this aspirations-means gap. In Karachi, a whole new world has emerged to do just this.
Although the younger generation has new aspirations, state culture and family pressures prevent or hinder them from pursuing their desires. There is a major conflict between the individualism of the young and the conservative social values of the older people who seek to protect the joint family and clan systems. This is one of the major reasons, other than financial, why young Pakistanis wish to migrate abroad. Obtaining a visa and a job and establishing connections after migrating to a first world country are not easy for young Karachiites from low- or lower-middle- income settlements. Middlemen have emerged to cater to this need, to help acquire genuine and/or forged visas and arrange jobs abroad. Newspaper reports suggest that these operators have contacts in the visa sections of embassies and large sums of money change hands in this trade. To acquire an American or a Japanese visa, young Pakistanis claim to have paid up to Rs 200,000 to middlemen. An entire inner-city street in Karachi deals with arranging the necessary paperwork for migration and employment, and from observation one can see that the number of middlemen and clients is increasing daily.
All Karachi neighbourhoods, including low-income and even marginalised ones, have not one but many video shops, all of which rent out pirated videos. Video copies of Indian films arrive in Karachi even before they have been released in India; similarly, videos of American films arrive well before they have been released in Karachi. All attempts at curbing piracy have failed. If they were to succeed, the vast majority of Karachiites would not be able to hire video cassettes and the same holds true for the purchase of audio cassettes. More recently, cable television has made a big appearance in Karachi. Most of the cable companies are illegal and informally use the telephone network for providing home connections. They service all areas of Karachi, irrespective of class. The telephone department officials and the police are informally paid by the cable companies to let this happen. The cost of a cable connection varies from Rs 450 per month for a connection from a legal company to Rs 150 for an illegal one. At a modest estimate, there are over 150,000 people involved in video and cable-related trade.
All low-income settlements (formal or informal) have video halls. These are large asbestos-roofed shacks showing video films of all kinds. The films are advertised on notice boards outside the halls, along with the names of the stars, and are held at regular hours. During the interval, tea and chips are available. Under the law, this is an illegal activity but it provides entertainment to the male-only, day-wage labour that lives around the port and the wholesale markets. The video-hall operators consider this as a “joint venture” between them, the police and the excise department officials.
New aspirations and exposure through the media to a new and glamorous world has led to the opening of a number of “beauty parlours” and tuition centres for spoken English. The number of neighbourhood beauty parlours is growing in low-income settlements and they advertise various hairstyles named after Indian film stars. Being well-groomed and able to speak English has become an added asset for a woman in the marriage “market” in Karachi’s older informal settlements. The pioneering beauticians have been trained informally by hairdressers in upper-middle-income beauty parlours. Now their apprentices, who are growing in number, are taking over in the informal settlements. This trade has become so important that popular radio programmes now give regular beauty tips for women and for the trade operators.
The most important informal-sector activity today is related to information technology. Training schools, actually no more than tuition centres, have opened up informally in all low- and lower-middle-income areas.
These centres require no qualifications for admission and offer no qualifications either. Their trainees are employed after having been tested by prospective employers. If they are well trained, the employers prefer them to qualified persons since they can pay them a much lower salary for the same work. Similarly, there is a whole sector that deals with pirating computer software and marketing it to both informal and formal outlets.
All attempts at curbing this activity have failed and, as a result, both international companies and the government have simply given up. The cost of such software can be as little as five percent of its original value and, without this sector, information technology would be unaffordable to the lower- or even middle-income groups in Karachi.
New lifestyles promoted by the media and the corporate sector have also had an influence on the poorer sections of the population. They too wish to consume soft drinks and beefburgers. They too are interested in designer shirts and brand-name perfumes. However, these are all unaffordable to them. But then fake cold drinks, costing half the price of the original, are manufactured in informal factories and marketed in a big way in the original bottles. Fake brand-name perfumes and fake designer shirts are also manufactured and marketed. A cheap alternative to the beefburger is available in every Karachi locality.
These new informal-sector activities, which are the result of liberalisation and related changes, really try to serve the better-off and the slightly upwardly mobile residents of old consolidated or consolidating informal settlements. At the same time, this process marginalises large sections of these settlements and deprives them of employment and access to diminishing government subsidies and benefits. This division has caused an increase in crimes such as armed robberies, car theft and purse-snatching in Karachi. These “criminal” activities are not easy to carry out in Karachi’s affluent areas due to the presence of the police and private guards and security systems. However, they continue to occur and grow in number in the lower-income settlements. Hence, residents of many of these settlements are organising informal neighbourhood policing systems and are trying to get government approval to operate them. So far, such approval has not been forthcoming and these neighbourhood policing systems continue to operate and grow in defiance of state rules and regulations.

Extract from the research paper ‘The changing nature of the informal sector in Karachi as a result of global restructuring and liberalisation’ by renowned architect and planner Arif Hasan