General Faiz Hameed, the once powerful head of Pakistan’s intelligence agency, was recently arrested on charges of intimidating a land developer to extort valuable land.
A big hurdle here is also current Urban/Rural classifications. While the official administrative definition suggests that about 60 percent of the population lives in rural areas, this does not hold to ground truthing. Mapping the Global Human Settlement Layer (relying on high-resolution pop density, built area etc) onto Pakistan, presents this number to be closer to 20 percent. In an environment where private schemes and large-scale mansions ("farmhouses") are classified as rural, no urban property tax can be collected from these areas.
Is it a requirement that everyone in society/ country must invest in productive assets? The ability and willingness of the Elite ( with exceptions) is limited by their limited financial education/experience and due to the complexity of operating a productive asset in an emerging market with high levels of regulatory/ state touch ( not to mention reliance on the vast labor pool). Could it be that actors are making an inefficient choice because the headache to deal with everything else doesn’t provide enough return beyond let’s say their first productive investment? Could one pivot by creating options for passive capital conversion to a more active asset allocation via stronger Capital Markets?
Atif, that’s an excellent analysis. Ive never quite thought of the Chinese model being along Georgist lines though. China doesnt have effective property taxes — hence the elite that bought into prime real estate in Tier 1 cities has enjoyed windfall gains, while extracting punitive rents from the productive professional who live in those cities.
A big hurdle here is also current Urban/Rural classifications. While the official administrative definition suggests that about 60 percent of the population lives in rural areas, this does not hold to ground truthing. Mapping the Global Human Settlement Layer (relying on high-resolution pop density, built area etc) onto Pakistan, presents this number to be closer to 20 percent. In an environment where private schemes and large-scale mansions ("farmhouses") are classified as rural, no urban property tax can be collected from these areas.
I am glad to see you have a good taste for Urdu poetry.
Based on my recent conversations in Pakistan, this land game is ending slowly as it has no cash yield and prices are no longer rising.
Is it a requirement that everyone in society/ country must invest in productive assets? The ability and willingness of the Elite ( with exceptions) is limited by their limited financial education/experience and due to the complexity of operating a productive asset in an emerging market with high levels of regulatory/ state touch ( not to mention reliance on the vast labor pool). Could it be that actors are making an inefficient choice because the headache to deal with everything else doesn’t provide enough return beyond let’s say their first productive investment? Could one pivot by creating options for passive capital conversion to a more active asset allocation via stronger Capital Markets?
You have adeptly put the darya (economic plight) into the kooza (poetry).
Atif, that’s an excellent analysis. Ive never quite thought of the Chinese model being along Georgist lines though. China doesnt have effective property taxes — hence the elite that bought into prime real estate in Tier 1 cities has enjoyed windfall gains, while extracting punitive rents from the productive professional who live in those cities.
Yes, the policy failure subsequent to land sales is not instituting property taxes properly
Brilliant. I enjoyed reading it. My question is in the UK all land belongs to the King. How does that benefit the masses, please?
no, it does not belong to the king