Islamabad: Emerging Economic Hub of Pakistan

Islamabad, the capital city of Pakistan, has been making headlines as the new economic hub of the country. The city's rapid growth and development have attracted businesses and investors, making it a hub for economic activity. In this blog, we will explore the reasons why Islamabad is becoming an economic hub, its potential to surpass Karachi and Lahore in the next decade, the geographical advantages that make it an attractive destination for businesses, and the economics behind its growth.

One of the primary reasons why Islamabad is becoming an economic hub is its expansion in the information and communications technology (ICT) sector. The city has three Software Technology Parks located in Evacuee Trust Complex, Awami Markaz, and I-9 sector. These parks house numerous national and foreign technological and IT companies, making Islamabad an ideal destination for IT-related businesses. Awami Markaz alone houses 36 IT companies, while Evacuee Trust houses 29 companies. Additionally, the city is targeting call centers for foreign companies as another significant area of growth, with the government reducing taxes by as much as 10% to encourage foreign investments in the IT sector.

Another factor contributing to Islamabad's emergence as an economic hub is its favorable business environment. According to the World Bank's Subnational Studies Islamabad was ranked as the best place to start a business in Pakistan. The city offers various incentives to investors, such as tax exemptions, subsidies, and a relaxed regulatory environment. These incentives have encouraged businesses to set up their operations in Islamabad, leading to the city's economic growth.

Islamabad's Gross State Product (GSP) has also been a significant contributor to its economic growth. In 2020, Islamabad's GSP was estimated at $23 billion, making it the third-largest contributor to Pakistan's economy after Karachi and Lahore. The city's economy is driven by several sectors, including information technology, telecommunications, real estate, and tourism. The booming IT sector, in particular, has played a significant role in driving Islamabad's economic growth.

Islamabad also offers several geographical advantages that make it an attractive destination for businesses. The city is located in the heart of Pakistan, with easy access to all the major cities, including Lahore and Karachi. It is well connected with the rest of the country through an extensive network of highways, railways, and airports. Additionally, the city's natural beauty, surrounded by the Margalla Hills, gives it a pleasant and peaceful environment, making it an ideal place to live and work.

Looking ahead, Islamabad has the potential to surpass Karachi and Lahore in the next decade, becoming the new economic center of Pakistan. Islamabad's emergence as an economic hub is a positive development for Pakistan and its people. The city's expansion in the ICT sector, favorable business environment, growing economy, strategic location, and natural beauty make it an attractive destination for businesses and investors. As Islamabad continues to grow and attract more businesses, its economy is expected to continue to thrive, paving the way for a brighter future for the city and the country as a whole.

References

https://www.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB10-FullReport.pdf, n.d. s.l.:s.n.

(https://pakistan.tmembassy.gov.tm/en/turkmenistan/economy, n.d.)