If there is one thing that repeated economic crises, whether domestic or international, has taught us, it is that economic independence is crucial to the survival of all government levels. If there is no financial stability or if it exists, but each government level is not financially independent, there is a small opportunity for the respective government to continue its job. The time of financial addiction has long passed. While one of the largest income from the local authorities is property taxes or municipal taxes, there is another significant way to generate funds to meet the needs of the grass rotary. In the financial world is called such instruments "Munis"The short form of municipal bonds. The idea behind municipal bonds is that they provide funds to local authorities for development projects at a speed lower than the banks would. Essentially, municipal bonds work very much in the same way as government bonds (often called treasuries), where the municipality uses its good name as well as its credibility to seek funding from financial institutions as well as the public, which in turn gain a fixed return with the security which is minimal (practically zero) risk of standard. Municipal bonds are available in two wide types: secured and unsecured. Secured bonds are when a municipality in a municipality is pledged to raise money. Unsecured Munis is what they seem to be; That is, they are unsecured to the extent that there is no specifically active pledged. However, they have the guarantee of the municipal government, which ensures that interest payments on the bond will be made and eventually returned the principal. Karachi is a humongous city with extraordinary potential. It has become a regular political comment in drawing rooms and dinner parties that Karachi generates the highest income amount, yet the same is not used on the city. I would argue that there is more in this calculation than meets the eye. It is sufficient to say at this time that Karachi does not have the funds at the municipal level to ensure that its development and the city are not financially independent. A beam of hope that appeared on the horizon is by virtue of MUKT (municipal usage and taxes) collection through K-electric Bills. This has resulted in a monthly turnover of almost 200 million Rs. In the 10 months of the last financial year, KMC received an amount of more than RS 1.9 billion as opposed to the previous annual collection of only 155 million RS. One must remember that MUCT is not a new treasure and had always existed. However, there has never been a mechanism to properly collect this tax and realize its potential. Karachi Metropolitan Corporation, through out-of-the-Box thinking and attitude, in view of the city’s land realities, collaborated with a tool company to ensure the improvement of muck. This has resulted in greater financial gain for KMC, and the results of it can be seen every day in the city in the form of its development projects. Although one may question the quantity of the development of KMC compared to the gigantic size of our city, it seems to be visible after a long time of a long time in terms of development as well as rehabilitation, and one is hopeful that the same will continue fair, transparent and equal. That said, the money recovered through MUCT is certainly not enough. Even otherwise, there is a need for many times money now, while the revenue is likely to come in the next 5 to 10 years. This is where the concept of municipal bonds can be a game election for the city of Karachi. In essence, what is proposed is the issuance of bonds to investors. Originally, these may be Pakistani investors. However, foreign investors may also be included subject to regulatory approval. This will help raise money for financing development projects at very low rates, thereby ensuring economic viability and independence for the city of Karachi. Municipal bonds are used worldwide in cities such as New York, London, Ahmedabad and Pune, among others to borrow money and finance development projects. India’s municipal bond market, although recently, has raised the INR 5000 Crores, which has directly translated into development work. Also, for decades, New York City has funded metro extensions, schools and bridges through MUNI bonds. Municipal bonds have achieved the same farm for all such cities that have issued them. The precedence is clear. At the state level, in Pakistan, Pakistan’s government regularly issues bonds to local and foreign investors aimed at funding its development and daily needs. While this is a new idea from a local government’s perspective in Pakistan, it is certainly not new to the financial world. The only differentiation between municipal bonds and those issued by the state will be the level of government support it. They would operate in a similar way. At its core, this structure would allow Karachi to raise capital independently, enabling it to finance critical infrastructure and development projects without being dependent on federal or provincial distributions. The benefits will be far -reaching: fiscal autonomy, timely project execution, public trust from Karachiites and urban renewal. Bringing such a structure to Karachi through KMC is not just about funding. It’s about redefining the city’s capacity to shape its own future. The time for bold and systemic solutions is now. While Nay Sayers may question it by claiming that the federal government must contribute, or the government in Sindh should be funding for it, as Karachi is the biggest contributor to the national or provincial Exchequer, the argument would be meaningless as Nay Sayers just has to say "no" and not accounting for their words. As mayor, however, with some effort, I am able to get funding from the provincial government, the federal government is completely apathetic to our city’s needs, and I do not see that the relaxing attitude is changing. With such a situation that stares me right in the eye, one is back with two options: First, to fight incessantly throughout the expression and hope for distributions, or secondly to take the driving seat and improve KMC’s own income base. It is unnecessary to say that the latter is a more solution -oriented approach. It is my regular belief that the only way for the city of Karachi to move forward and get on par with international municipalities is through financial independence. The concept of municipal bonds as proposed will be a big step in this direction not just for the city of Karachi. But it will also prove to be a benchmark for all other major cities in Pakistan and municipalities. Let’s hope that this time we are not stuck in small politics, but would rather focus on the bigger picture. This city belongs to all of us, and I hope that people from all quarters will support this endeavor – so that we, Karachites, can realize the enormous potential of this unique metropolis. Let me end by drawing the influence of a Chinese saying that I reformulate as "The best time to act was yesterday the second best time is today". It’s time for us to act. Author serves as the 28th mayor of Karachi
Fixing Karachi: Locking of Gridlock
