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Geography of Growth

Geography of Growth

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Since the 1990s, new economic geography has received a lot of attention as mainstream economists such as Krugman and others began to focus on where economic activity occurs and why. Coincidentally, international trade, location theory, and urban economics all appear to be asking the same question: where is economic activity located and why? The challenge is to explain the economic concentration or agglomeration of a large number of activities in certain geographical space. This volume breaks down the various types of cities and evaluates the key factors used to look at cities, such as innovation, green growth, spatial concentration, and smart cities in order to understand how cities work. Why is it that certain cities attract talent? How do some cities become business hubs? Why is it that few cities become increasingly competitive while others remain stagnant?As development specialists are increasingly focusing on how to make cities competitive, this book can serve as a guide for providing key insights, backed by cases on how cities can possibly become more competitive and productive.
Since the 1990s, new economic geography has received a lot of attention as mainstream economists such as Krugman and others began to focus on where economic activity occurs and why. Coincidentally, international trade, location theory, and urban economics all appear to be asking the same question: where is economic activity located and why? The challenge is to explain the economic concentration or agglomeration of a large number of activities in certain geographical space. This volume breaks down the various types of cities and evaluates the key factors used to look at cities, such as innovation, green growth, spatial concentration, and smart cities in order to understand how cities work. Why is it that certain cities attract talent? How do some cities become business hubs? Why is it that few cities become increasingly competitive while others remain stagnant?As development specialists are increasingly focusing on how to make cities competitive, this book can serve as a guide for providing key insights, backed by cases on how cities can possibly become more competitive and productive.

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Publish date: May 10, 2012
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12/19/2015

Cohen (2004) summarizes the major differences in urbanization experi-
enced by the developing regions and identifies some of the challenges in
the coming decades. The discussion is summarized in table 3.1. Enormous
interregional and intraregional differences are evident in the pattern of

Table 3.1 Regional Differences in Urbanization

Region

Rate of

urbanization (%)

Characteristics of urbanization

1950

2000

Latin America and

the Caribbean

42

75

Urban primacy; many cities with more than 1 million people; reverse polarization; spatial polarization

between rich and poor; long tradition of urbanization in some countries;a most Caribbean countries have

a high rate of urbanization, with Haiti as an exception.

South Asia

18

27

Population becoming increasingly urban; extreme poverty and depravation, creating enormous urban

management challenges; region is home to 5 of the world’s 30 largest cities: Mumbai, Kolkata, and

Dehli (India), Dhaka (Bangladesh), and Karachi (Pakistan); improved modes of transportation have extended

the reach of urban areas and blurred the distinction between rural and urban—

desakota; the majority of

land is under cultivation, but nonfarm jobs are an important source of employment and income; region will

be home to three of the world’s five largest urban agglomerations;b most urban growth in the future will

take place in smaller cities and towns.

East Asia and

the Pacific

38

Areas that have integrated into the global economy experienced rapid urban transformation that is now

being repeated in the newly industrializing economies;c special economic zonesd along China’s coastal

regions were a catalyst for industrialization and urbanization; population projections suggest that the

1.25 billion additional people by 2030 will be absorbed into urban areas and that 54% of the population

will be urban by 2030.

Former Soviet

republics

Historically, government determined the nature, scale, and spatial distribution of economic activities; cities

were planned in concentric circles with large industrial plants and large-scale housing estates; the end of

the Cold War and collapse of the Soviet Union had huge economic, social, and demographic consequences

that were most apparent in the cities.

Middle East and

North Africa

27

58

Less diversity in urbanization among countries in the region compared to other regions; the need for access

to water, rapid industrialization, and high levels of international labor migration to oil-rich Gulf states

resulted in urban population of more than 50% and more than 85% in many countries;e socioeconomic

and political heterogeneity within the region results in a wide variety of urban problems and challenges.

(continued next page)

39

Sub-Saharan Africa

15

38

Least developed and least urbanized region of the world; most cities are small by international standards;

Kinshasa and Lagos are exceptions; colonialism influenced the structure and pattern of economic growth—

cities displaced traditional networks of trade and influence and attracted migrants; colonial urbanization

also affected the physical structure and layout of many cities into two highly uneven zones—

a European

space with a high level of infrastructure and an indigenous space with marginal services; postcolonial cities

grew quickly as a result of high population growth and high spatial mobility; cities are economically

marginalized in the new global economy;f challenges for urban authorities are to provide low-income

housing, high-quality urban services, and employment.g

Source: Compiled from Cohen 2004.

Note:

= Not available.

a. Argentina, Chile, and Uruguay.

b. Delhi, Dhaka, and Mumbai.

c. Indonesia, Malaysia, Philippines, and, the Thailand.

d. For examp,le, Shantou, Shenzhen, Xiamen, and Zhuhai, which were established as testing grounds for a more open, export-oriented development strategy.

e. Bahrain, Kuwait, Lebanon, Libya, Qatar, and Saudi Arabia. The Republic of Yemen is an exception, with just 25 percent of the population classified as urban.

f. “Since the 1970s, urban growth in Africa has been most affected by the region’s economic crisis. A current list of ailments includes declining productivity in agriculture and industry, a

lack of foreign exchange, increasing indebtedness, worsening balance-of-payments position, and declining real wages” (Cohen 2004, 45).

g. In addition to economic mismanagement, several countries have suffered from long civil wars, with large numbers moving to cities. Cities are growing despite poor macroeconomic

performance and without significant foreign direct investment.

Table 3.1

(continued)

Region

Rate of

urbanization (%)

Characteristics of urbanization

1950

2000

40

Urban Transition and Growth 41

urbanization from the 1950s to the present. In each case, the socioeco-
nomic and political history interacts with the geographic landscape to
determine the urbanization experience and is affected by globalization,
democratization, and decentralization. As each region’s and, indeed, each
country’s socioeconomic, political, and geographic landscape is different,
so too has been their path of urbanization.
Latin America and the Caribbean is primarily an urban region with a
long history, at least in some countries. The overall rate of urbanization
masks intraregional differences, whereby Argentina, Brazil, Chile, French
Guiana, Mexico, Uruguay, the República Bolivariana de Venezuela, and
several Caribbean countries or territories (Anguilla, The Bahamas, Cuba,
Guadeloupe, Martinique, Puerto Rico, Trinidad and Tobago) are more
than three-quarters urban, while the Dominican Republic, Guatemala,
Guyana, and Jamaica are around 50 percent urban. Haiti has the lowest
rate of urbanization in the region, at around 30 percent. Large-scale rural-
to-urban migration, coupled with industrial policies that targeted cities
and were predicated on import substitution and protection of infant
industries, led to a high rate of urban primacy. Cities with more than
1 million people in the region increased from 6 in 1950 to more than 50
in 2000, and “the four largest cities—Buenos Aires, Mexico City, Rio de
Janeiro, and São Paulo—have grown to previously unimaginable sizes”
(Cohen 2004, 40). Rural-to-urban migration is expected to continue.
However, industrial policy has shifted to favoring areas outside of the
megacities. This shift, coupled with congestion costs, economic recession,
and programs of structural adjustment in the 1990s, has adversely
affected many Latin American cities and the megacities in particular.
Urbanization will continue, but at a slower pace.
At the other end of the spectrum is Sub-Saharan Africa, one of the
least urbanized regions and where urbanization has been largely predi-
cated on demographic factors and not always for benign reasons (see the
notes to table 3.1). The region’s colonial past affected the manner in
which the physical aspects of urban space developed, incorporating two
zones—a European zone “enjoying a high level of urban infrastructure
and services and an indigenous space that was marginally serviced”
(Cohen 2004, 45). Data problems make it difficult to describe urban
trends. And while fertility rates are falling, population momentum sug-
gests a fast pace of urbanization, such that “before 2023, African society
will become predominantly urban” (Cohen 2004, 45).
The Middle East and North Africa region is home to some of the
world’s oldest cities, yet urbanization was slow to take off, with just

42 Geography of Growth

27 percent of the population classified as urban in 1950. By 2000, there
had been an eightfold increase in urban inhabitants. Cairo, Istanbul, and
Tehran are among the largest urban agglomerations in the world, home to
more than 7 million inhabitants each. Most countries within the region
are at least 50 percent urban (Cohen 2004). The challenges for urban
planners are many, given the socioeconomic and political heterogeneity
within the region. For example, rural-to-urban migration and population
growth in the Arab Republic of Egypt have led to many slums and hous-
ing shortages in Cairo. Urban issues in postconflict Iraq “have to do with
establishing the infrastructure of urban government and other issues of
rehabilitation and reconstruction” (Cohen 2004, 44).
China and India dominate the East Asia and the Pacific region, and the
combined urban population in the region contains just under half of the
world’s urban population. The vastness of the region makes generaliza-
tions difficult. Cohen (2004) classifies countries based on their experi-
ence with economic development and urbanization (table 3.1). Some
countries have opened up to the world economy, benefiting from global-
ization and experiencing increasing rates of urbanization. Many of the
coastal cities have undergone rapid urban transformation as a result. The
designation of special economic zones in China also led to rapid urban
transformation in cities such as Dalian, Guangzhou, Qingdao, Shenzhen,
Tianjin, and Xiamen.
The pace of urban change in South Asia has been relatively modest
due largely to the more rural nature of the countries. Significant urban
challenges abound in an environment with extreme poverty and inade-
quate physical infrastructure. Increasing industrialization has benefited
urbanization, as have improved modes of transportation that have
extended the reach of the urban areas, blurring the distinction between
urban and rural areas. Nonfarm jobs have become a feature of the
desakota zones around the cities, contributing positively to employment
and income.

Urbanization in the former Soviet republics was dictated by govern-
ment decisions relating to the nature, scale, and spatial distribution of
economic activities. The absence of a land market in cities led to a large
amount of unused land throughout the city. Large-scale industrial pro-
duction was favored over the service or retail sectors. Moreover, many of
these industrial production plants were kept in operation long after they
had ceased to be profitable. The fallout once the Soviet Union collapsed
was felt most strongly in the cities, with enormous declines in output,
“rapid impoverishment of large sections of society, great uncertainty

Urban Transition and Growth 43

about the future, and a fundamental reevaluation of the location, func-
tioning, and organization of productive activity” (Cohen 2004, 43). The
social, economic, and demographic consequences were also unprece-
dented, with declining rates of marriage, birth, and male life expectancy.

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