The Informal Economy in Urban Violence: Karachi - Pakistan i Project Background This study was undertaken as part of a 2.5 year research project on Economic Recovery in Post-Conflict cities: the role of the urban informal economy, funded under the DFID-ESRC Joint Fund for Poverty Alleviation Research (Project ES-M008789-1). The research explores the role of the urban informal economy in poverty-reduction, peace-building and development in post-conflict cities, and its scope to provide both livelihoods for the extreme poor and a platform for economic recovery. Post-conflict recovery is a long and cyclical process and this research examines cities with different drivers of conflict, including urban areas in post-civil war settings, and cities affected by protest, violence or on- going turf wars. The research explores the drivers of conflict and links to the informal economy, examining both structural and individual factors that support/inhibit the informal economy’s role and growth in post-conflict settings. Fieldwork is being carried out in four cities: Cairo, Hargeisa, Karachi and Kathmandu, exhibiting different facets of conflict and violence. Research Partners Cardiff University: Professor Alison Brown; Dr. Peter Mackie; Kate Dickenson NED University of Engineering and Technology: Dr. Saeed Uddin Ahmed, Masters’ Research Assistants Peace Negotiator: Joan McGregor NGOs: NOW Communities, Takhleeq Foundation Content © Cardiff University 2017 Photos © Najia Zaidi and Alison Brown, Cardiff University 2017 i Contents PROJECT BACKGROUND ............................................................................................................................................. I CONTENTS ................................................................................................................................................................. II TABLES AND FIGURES ............................................................................................................................................... III 1. INTRODUCTION .................................................................................................................................................... 1 1.1 INTRODUCTION TO THE REPORT ........................................................................................................................................ 1 1.2 STRUCTURE OF THE REPORT ............................................................................................................................................. 1 2. SETTING THE CONTEXT: CONFLICT & THE CITY ...................................................................................................... 3 2.1 INTRODUCTION ............................................................................................................................................................. 3 2.2 CONFLICT IN KARACHI .................................................................................................................................................... 3 2.3 POLITICAL AND SOCIO-ECONOMIC CHARACTERISTICS OF KARACHI ............................................................................................ 5 2.4 LOCAL GOVERNMENT IN KARACHI ..................................................................................................................................... 7 2.5 THE INFORMAL ECONOMY IN KARACHI ............................................................................................................................... 8 3. METHODS .......................................................................................................................................................... 11 3.1 INTRODUCTION ........................................................................................................................................................... 11 3.2 CONFLICT MAPPING AND RESOLUTION ............................................................................................................................. 11 3.3 INFORMAL ECONOMY ANALYSIS ...................................................................................................................................... 11 4. KARACHI’S INFORMAL ECONOMY TODAY .......................................................................................................... 15 4.1 INTRODUCTION ........................................................................................................................................................... 15 4.2 DESCRIBING THE CONTEMPORARY INFORMAL ECONOMY IN KARACHI ..................................................................................... 15 4.3 CHALLENGES AND PROBLEMS IN THE INFORMAL ECONOMY TODAY ......................................................................................... 19 4.4 POTENTIAL PROTECTIONS FROM PROBLEMS AND CHALLENGES .............................................................................................. 25 4.5 KEY FINDINGS ............................................................................................................................................................. 28 5. THE INFORMAL ECONOMY IN CONFLICT ............................................................................................................. 31 5.1 INTRODUCTION ........................................................................................................................................................... 31 5.2 GENERAL EFFECTS OF CONFLICT ...................................................................................................................................... 31 5.3 EFFECTS OF CONFLICT ON THE INFORMAL ECONOMY ........................................................................................................... 34 5.4 THE INFORMAL ECONOMY IN TRANSITION ........................................................................................................................ 37 5.5 CONTRIBUTION OF THE INFORMAL ECONOMY TO DEVELOPMENT ........................................................................................... 38 5.6 KEY FINDINGS ............................................................................................................................................................. 41 6. CONCLUSIONS AND RECOMMENDATIONS ......................................................................................................... 43 6.1 INTRODUCTION ........................................................................................................................................................... 43 6.2 KEY FINDINGS ............................................................................................................................................................. 43 6.3 RECOMMENDATIONS ................................................................................................................................................... 45 REFERENCES ............................................................................................................................................................ 49 APPENDICES ............................................................................................................................................................ 52 ii Tables and Figures Table 3.1: Age group ............................................................................................................................................... 12 Table 4.1: Education level ....................................................................................................................................... 16 Table 4.2: Education level by birthplace ................................................................................................................. 16 Table 4.3: Business district by ethnicity .................................................................................................................. 16 Table 4.4: Business type by business district .......................................................................................................... 17 Table 4.5: Business type by ethnicity ...................................................................................................................... 17 Table 4.6: Business premises by business type ....................................................................................................... 18 Table 4.7: People in business by business premises ............................................................................................... 18 Table 4.8: Daily income by business type ................................................................................................................ 18 Table 4.9: Business challenges by ethnicity ............................................................................................................ 19 Table 4.10: Type of problem with local authority ................................................................................................... 21 Table 4.11: Challenge with local authority by business premises ........................................................................... 22 Table 4.12: Informal fees by business type ............................................................................................................. 23 Table 4.13: Problem with operating space by business type .................................................................................. 23 Table 5.1: Crime statistics ......................................................................................................................................