After the election in Pakistan, the fight between Lahore and Karachi has come in media once again on allocation of China Pakistan Economic Corridor (CPEC) projects. Till now Lahore business lobby was stronger because former Prime Minister Nawaz Sharif represented the interests of Lahore business elites. In fact, his family itself is part of the Lahore business lobby. However, election of Imran Khan on highest decision making chair has changed the equations, Karachi business lobby supported Khan in election and now its asserting itself in policy making. The rivalry of two of the largest cities of Pakistan goes back to creation of Pakistan, almost seven decades.
Lahore was used to one cultural, intellectual center in Mughal and British India. But the rise in importance of ports in trading, and energized migrants from North India established Karachi as the business capital of Pakistan in the 60s and 70s. However, in later decades as Pakistan government became puppet in the hands of the military and the country moved from rule based capitalist economy to ‘patronage based economy’, the political elites of Lahore who are more powerful, seized the opportunity to move businesses near home. Since last few decades, the battle continues and the party in power at central legislature favors one or the other depending on reciprocal benefits. Therefore last five years were in favor of Lahore lobby because Sharif was in power but next five years will be in favor of Karachi’s business elites.
Sharif government awarded many CPEC contracts to Lahore’s businessmen who were operating in joint venture with Chinese companies. With the election of Imran Khan, Karachi’s lobby wants their share in the pie. Karachi-based businessman, Abdul Razak Dawood who is also an Advisor for Commerce, Textile, Industry & Production, and Investment to the prime minster had raised question on CPEC deal and allocation of projects. “The previous government did a bad job negotiating with China on CPEC – they didn’t do their homework correctly and didn’t negotiate correctly, so they gave away a lot. Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at, because it’s not fair that Pakistan companies should be disadvantaged,” said Dawood in an interview. His criticism of CPRC deal and project allocation is significant because he is considered to be very influential in the present government. In fact, current Pakistan’s finance minister, Asad Umar is the previous CEO of Engro Corp which is owned Dawood’s family.
His family is one of the 22 richest families in Pakistan and he represents Karchi lobby which played important role financing Imran Khan’s campaign to get rid of Nawaz Sharif who favored Lahore lobby. 18 billion dollars worth energy and infrastructure projects were awarded during Sharif government (2013-18) in which Lahore’s businessmen and Chinese companies benefited most and Karachi’s businessmen were sidelined. Dawood’s own company bided for
engineering, procurement and construction contracts of five CPEC power projects but the projects were awarded to Chinese companies. Lahore’s businessmen benefited from this because many of them have joint ventures with Chinese automotive, cement, power generation and textile companies.