The Impact Of Urbanization In Pakistan

The rapid growth of urbanization is a continuing process in developing countries including Pakistan. Urbanization is highly effective for economic growth as cities are called engines of growth. Urbanization produces economies of scale for entrepreneurs and provides higher wages and dividends. It also plays its part in reducing rural poverty. Mathur (2013) says there is strong relationship between urbanization and increased GDP and migration to the city provides a route out of poverty for many people. The study of Haque & Nayyab (2007) shows that cities are contributing to over 80 per cent of global GDP and also these are acting as innovations, centres of knowledge, inspiration, creativity, that is leading to promote learning and development

Domestic Commerce:

At global level, the small business activities are creating new jobs. There are various hurdles that urban entrepreneurs face mainly includes access to financial, social, and human capital, regulatory problems, and high taxes.

Domestic commerce consists of retail and wholesale trade warehousing and transport making different linkages to each other. Well developed and large scale domestic markets provide a testing ground for new products and techniques. New brands have greater chances of succeeding and becoming well known internationally when tested in well-developed domestic markets. Leading international brands have flourished through opportunities they were able to avail in their home markets (MOC, 2006).

According to the Ministry of Commerce, “The state of domestic commerce in Pakistan is partly apparent by the poor condition of the retail markets in our cities. They are mostly small, cramped and congested areas with limited square feet allocated to every shop. There is an excess demand for not only retail space but also office space, hotels and mixed use

The retail sector in Pakistan has been progressing at a healthy rate but is still lagging behind, in size and development, to retail and wholesale sectors in other comparator countries. Many of the retail and wholesale businesses in Pakistan are not registered under the Companies Act or under the Shop Act and most of them are not paying taxes also. Further, there is not such enforcement of the Acts on small businesses (MOC, 2007). The study of Auerswald, P at al, (2010) highlight the fact that there are so many entrepreneurs in Pakistan but most of them are putting their energies toward rent-seeking rather than productive