KARACHI: One afternoon a stranger arrived at Mohammad Faizanullah’s stationery shop and wordlessly handed the man behind the counter two items: a piece of paper with a phone number scrawled on it, and a bullet.
“The letter contained a demand for Rs200,000,” said 20-year-old Mr Faizanullah. “The man said ‘Just call this number and pay the amount, otherwise, the bullet is meant for you.’” Businesses are facing a surge in extortion demands from criminal gangs, forcing many owners to delay new investment or to relocate their families to escape the sense of insecurity gripping the city.
The worsening law and order situation in Karachi, which generates 25 per cent of the country’s economic activity, presents one of the many challenges the new government must overcome to fulfill promises to set Pakistan on a path to faster growth.
An expanding middle class is fuelling consumer spending but extortion is hurting confidence among thousands of family-run firms that form the backbone of the economy.
With Ramazan due to start in July, a traditional time for extortionists to come calling, traders and shopkeepers are braced for what police say will be a record year of demands.
“The extortion racket has blown out of all proportion the previous year,” said Ahmed Chinoy, chief of the Citizens-Police Liaison Committee (CPLC).
The growing demands reflect the shifting dynamics of a city of 18 million people where new challengers, including the Taliban, are locked in an increasingly violent, neighbourhood-by-neighbourhood battle for control.
Figures collected by the CPLC show there were more than 630 extortion complaints registered in Karachi from January to mid-June, compared to 589 last year. Most cases were registered by people who have refused to pay.
Police say the actual number of incidents is many times higher since the vast majority of extortion demands go unreported and victims usually decide to pay. There is no way to know the sums involved, but police say payments run into hundreds of millions of rupees annually and that 2013 will be a record year.
Ten days after the extortionist paid his visit to Mr Faizanullah’s shop in the bustling Alam cloth market, two men riding motorbikes stopped him, his father and uncle as they were driving home from work.
One of the men, a gun visible in his waistband, told him: “You people don’t seem to understand our polite attitude. We will have to shoot you.” They demanded the men’s cellphones and roared away.
“We live under constant stress,” Mr Faizanullah said. But he insisted that his family refused to hand over any cash.
Professionals, not just shopkeepers, are also targets.
When Javed Hanif, a doctor, answered his cellphone in June the caller reeled off a list of Dr Hanif’s personal details: his work in a government hospital, the registration number of his car, and preparations for his son’s wedding. The caller then demanded Rs500,000.
Hand grenades Traders say paying extortion has long been part of the cost of doing business in Karachi.
Police say thugs working for the Muttahida Qaumi Movement (MQM), the dominant political party in Karachi, are the biggest extortion menace in the city.
The police have also linked other political parties to extortion though the MQM and other parties in Karachi repeatedly deny any involvement. During the past year, the rules of the game have changed as competing political parties, militant groups’ and criminal entrepreneurs’ intent on challenging MQM’s grip on Karachi have expanded their extortion rackets to fund the ever deadlier turf wars, police officials say.
The number of killings in Karachi jumped to more than 2,300 in 2012 from 1,700 the previous year. More than 1,400 murders have already been recorded since the start of this year. The increasing death toll has made it easier for gangs to coerce people into paying money, although there have been few reports of extortion-related killings.
“The extortion racket in Karachi has become an industry,” said senior police officer Niaz Ahmed Khosa. “There are around 50 no-go areas in Karachi, which police cannot enter. Most of the extortion rackets and other crime are being generated from these population pockets.” The police blame much of the increase in extortion on the banned Lyari-based People’s Amn Committee that the police say is expanding into new parts of the city. The gang, the police say, is linked to the Pakistan Peoples Party that ruled the country until its defeat at May general elections.
“If some political party says they are not involved in the extortion racket, they are lying,” said Majyad Aziz Balagamwala, a former president of the Karachi Chamber of Commerce and Industry.
Police say the Tehreek-i-Taliban Pakistan also ramped up extortion operations in the city over the past year.
In spite of the climate of fear, business sentiment is not universally bleak. Retail is booming in Karachi, symbolised by the opening of a flashy modern shopping centre called Dolmen Mall Clifton in 2011.
But nobody is immune from an extortionist’s call. Byram D. Avari, the owner of a prominent hotel chain and a well-known figure in Karachi, refused to pay the demands of a caller who threatened to set off hand grenades at his hotels and home. But many others dare not say no.—Reuters