If there is something that repeated financial crises, whether national or international, have taught us, is that financial independence is crucial for the survival of all levels of government. If there is no financial stability, or if it exists, but each level of government is not financially independent, then there are few possibilities that the respective government continues to do its job. The era of financial agency has disappeared a long time ago. While one of the largest income of local governments is property taxes or municipal taxes, there is another substantial way to generate funds to meet needs at the base level. In the financial world, such instruments are called "Munis"The short shape for municipal bonds. The idea behind municipal bonds is that they provide funds to local governments for development projects at a lower rate than banks would. Essentially, municipal bonds operate in a very similar way to government bonds (commonly called Treasury Bonds) in which the municipality uses its good name, as well as its credibility to find funds from financial and public institutions, who in turn are provided with a fixed rate of performance with the security that there is a minimum risk (practically zero) of non -compliance. Municipal bonds come in two broad types: insured and unknown. The insured bonds are when an asset of a municipality is committed to raise funds. The unusual munis are what they seem to be; That is, they are not guaranteed to the extent that no specific asset is committed. However, they have the guarantee of the municipal government that guarantees that interest payments will be made in the bond and, finally, the director is returned. Karachi is a huge city with exceptional potential. It has become a common political comment in the halls and dinners that Karachi generates the greatest amount of income, however, the same is not spent in the city. I would say that there is more in this calculation of what it seems. It is enough to say at this stage that Karachi does not have the funds at the municipal level to ensure that its development and the city is not financially independent. A ray of hope that appeared on the horizon is by virtue of the collection of MUCT (charges of municipal public services) through K-Electric invoices. This has resulted in a monthly income of almost 200 million rupees. In the 10 months of the last financial year, KMC received an amount of more than 1.9 billion rupees compared to the anterior annual collection of only RS 155 million. One must remember that MUCT is not a new tax and has always existed. However, there has never been a mechanism to correctly collect this tax and perform its potential. The Karachi Metropolitan Corporation, through the ribbon thought and keeping in the view of the land realities of the city, was associated with a public service company to guarantee the recovery of MUCT. This has resulted in a great financial gain for KMC, and the results can be seen every day in the city in the form of its development projects. Although one can question the amount of development by KMC compared to the gigantic size of our city, however, after a long time, the presence of KMC in terms of development, as well as rehabilitation, seems to be visible and has the hope that the same will continue quite much, in a transparent and equitable way. That said, money recovered through MUCT is certainly not enough. Even otherwise, money is now needed, while income is likely to arrive in the next 5 to 10 years. That’s where the concept of municipal bonds can change the game for the city of Karachi. Essentially, what is proposed is the issuance of bonds to investors. Initially, these can be Pakistani investors. However, subject to regulatory approval, foreign investors can also be included. This will help raise money to finance development projects to very low rates, thus ensuring the financial viability and independence of 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 fund development projects. The municipal bond market of India, although nascent, has raised in 5000 million rupees that have been directly translated into development work. Similarly, New York City has financed for decades the expansions, schools and bridges of the Metro through municipal bonds. The municipal bonds have achieved the same feat for all those cities that have issued them. The precedent is clear. At the state level, in Pakistan, the Pakistan government regularly issues bonds to local and foreign investors in order to finance their daily development and needs. Therefore, although this is a novel idea from the perspective of a local government in Pakistan, it is certainly not new to the financial world. The only difference between municipal bonds and those issued by the State will be the level of government that supports it. They would operate similarly. In essence, this structure would train Karachi to raise capital independently, allowing him to finance critical infrastructure and development projects without depending on federal or provincial brochures. The advantages will be of great scope: tax autonomy, timely execution of the project, public confidence of the karachiitas and urban renewal. Bringing such a structure to Karachi through KMC is not just finance. It is about redefining the city’s ability to shape its own future. The time for bold and systemic solutions is now. While Nay Sayers can question it by arguing that the federal government should be contributing or that the Sindh government should finance it since Karachi is the largest taxpayer to the national or provincial treasure, the argument would be useless since Nay Sayers only has to say "No" and not account for their sayings. As mayor, although with a certain effort, I can obtain funds from the provincial government, the federal government is completely apathetic with the needs of our city and I do not see that this lax attitude changes. With such a situation looking directly into my eyes, one stays with two options: first it is to fight incessantly throughout the term and wait for brochures, or secondly take the driving seat and improve the KMC income base. It is not necessary to say that the latter is a more solution oriented approach. I firmly believe that the only way that the city of Karachi progresses and arrives at the same time with international municipalities is as a financial independence. The concept of municipal bonds as proposed will be an important step in this direction not only for the city of Karachi. But it will also prove to be a reference point for all other large cities of Pakistan and municipalities. Hopefully this time we do not get trapped in minor politics, but we will prefer to focus on the general landscape. This city belongs to everyone, and I hope that people from all sectors support this effort, so that we, the karachitas, we can perform the immense potential of this unique metropolis. Let me conclude by drawing influence of a Chinese proverb that I am reformulating "The best time to act was yesterday, the second best is today". It’s time for us to act. The writer serves as the 28 mayor of Karachi
Set karachi: unlock the stagnation
