The prime minister has recently referred to unused government land in cities as ‘dead capital’ to be turned into ‘valuable assets’ by building skyscrapers and residential towers. In economics, land is not capital as it does not generate wealth. Rent is merely the scarcity value of land. The increase of scarcity value at one place leads to a decline in value at another place. Increasing scarcity and using rent as a source of income is bad economics. Unchecked expansion of cities becomes unmanageable and leads to social, economic and political problems. Construction of skyscrapers and residential towers will increase congestion, pollution and unnecessary commuter traffic etc. All available government land in cities should, instead, be used for making parks, schools, hospital, and public libraries etc.
It is advisable that the government limit residential, commercial and industrial construction in and around major cities. It is better to have a large number of small- and medium-sized towns all over the country to avoid urban migration.
Abdul Majeed
Islamabad