Pakistan's urban areas face the same problems as other urban areas in South and South-East Asia. Two of these problems have been of immense concern to “civil society” organisations in Karachi. One is housing and infrastructure. This has been a concern for many decades. The other is more recent and is related to what I call “the neo-liberal urban development paradigm”.

Pakistan requires 350,000 new housing units per year for its urban areas. The formal sector is able to supply only 120,000 housing units per year. The demand-supply gap is accommodated in katchi abadis (squatter settlements on government land) or through the Informal Subdivision of Agricultural Land (ISAL) on the periphery of cities and towns. It is estimated that nine million people live in katchi abadis in the urban areas of Pakistan and another 15 million in ISALs. Both type of settlements are unserviced to begin with but over a 15 to 20 year period they manage to acquire water, electricity, gas and some sort of social infrastructure. However, sewage invariably flows into cesspools or into the natural drainage system.

Karachi, the country's largest city (population 13 million) has an annual housing demand of 80,000 units. In the last five years the formal sector has been able to provide 26,700 units annually. The demand-supply gap has been accommodated in katchi abadis whose population is now over six million. Between 1992 and 2003, 25,438 housing units have been demolished as a result of mega projects and to satisfy the land hunger needs of a strong politicianbureaucrat- developer nexus. Almost all the evictees moved to new katchi abadis far away from the city centre.

Since 1973, the government has been operating a ‘Katchi Abadi Improvement and Regularisation Programme’ funded with loans from the World Bank and the Asian Development Bank. Through this programme people pay for land and development and acquire a 99-year lease. The programme has improved and regularised only 1.5 per cent of katchi abadis per year. This means that the existing katchi abadis would be regularised in 75 years. Thus the programme has not been a success. The major reason for the poor performance of the programme is that there has been no proper community participation in it and as such cost recovery through lease charges has been poor. The programme has increased Pakistan's foreign debt which is difficult to repay (Hasan, Arif; 2001).