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{forthcoming in Oldfield, S. and Parnell, S. (2014): Handbook on Cities in the Global South, London: Routledge} THE URBANIZATION-DEVELOPMENT NEXUS IN THE BRICS1 Ivan Turok Linking the process of urbanization to forces that can propel economic and social development is one of the major challenges of the 21st Century (Beall et al. 2010). The problem arises because the urban population of low- and middle-income countries is predicted to double from two to four billion between 2000 and 2030 (World Bank 2013). The United Nations reinforces the point: ‘Virtually all of the expected growth in the world population (until 2050) will be concentrated in the urban areas of the less developed regions’ (United Nations Population Division (UNPD 2012: 3). With 42 per cent of the world’s current population, the BRICS will be major contributors to this phenomenon. There is already considerable evidence from countries such as India, Brazil and South Africa that large-scale urbanization without growth and development can cause enormous social dislocation and intractable problems in overcrowded settlements lacking basic services (Martine et al. 2008; UN-Habitat 2010). If and when the population influx fails to gain a foothold in urban labour markets, escalating hardship and frustration in marginalised communities is likely to spark social disorder and conflict (Saunders 2010). This is why about three-quarters of governments in developing countries are concerned about urbanization and have policies to reduce rural-urban migration (UNPD 2012). Yet history shows that in most regions of the world, urbanization has also been accompanied by human ingenuity, higher productivity and greater economic dynamism, although these benefits have often been less conspicuous and slower to materialize than the social and environmental costs (Jacobs 1984; Hall 1998; World Bank 2009; Glaeser 2011). Over time buoyant urban economies generate rising employment, higher living standards, better designed built environments and more taxes to pay for improved public infrastructure and community facilities. China’s recent experience epitomizes this process in some respects and 1 The BRICS is an alliance of Brazil, Russia, India, China and South Africa formed in 2009. The chapter draws on a collaborative research project on Urbanization in the BRICS that was part-funded by the UNFPA and UK Aid (see McGranahan and Martine, forthcoming). Considerable thanks are due to Gordon McGranahan and George Martine for their support and advice on many of the issues discussed in the chapter. 1 explains why urbanization is now seen as vital to economic development and a national priority to bolster flagging domestic growth and rebalance the economy by strengthening consumer demand (Miller 2012). A key question for research and policy is whether the very existence of fast-expanding urban populations in contemporary conditions of the global south helps to spur economic progress, or whether migration is little more than a consequence of the opportunities available in cities. In other words, does the process of urbanization in and of itself have ‘transformative power’ (UNPD 2012: 1)? The answer to this question has an important bearing on whether urban policy has an economic rationale. If it does, then efforts to stem migration could both impede economic progress and exclude sections of the population from the opportunities this creates. If it doesn’t, urban policy is essentially unproductive and concerned with the distribution of benefits and burdens between urban and rural areas. Similarly, if urbanisation is mainly an effect or outcome of uneven economic development, then it is likely to create all kinds of problems for governments if it outpaces the creation of urban jobs and livelihoods. Excessive urbanisation could even undermine the very basis of prosperity. The purpose of this chapter is to examine the contribution of urbanization and associated policies to inclusive economic development in leading nations of the global south. The BRICS is a grouping of fast-growing, middle-income, emerging powers to rival Europe and North America. They accounted for almost half (47 per cent) of the growth in world output between 2000 and 2010, while their share of global production increased from a sixth (17 per cent) to a quarter (26 per cent) (McGranahan and Martine forthcoming). With four of the ten largest economies in the world, what these states say and do is increasingly important – for urbanization as well as for many other international concerns. One of the goals of the BRICS is to chart a new paradigm for world development to challenge the hegemony of the global north and its prevailing model of lightly-regulated capitalism. The new paradigm is ill-defined at present, and its implications for urbanization and economic inclusion are quite uncertain. The BRICS group is diverse, yet they also share features in common, including their resilience to the recent global downturn, or at least its moderated impact. They all recognize the need to shift their development paths in more equitable and environmentally sustainable directions, although they do not necessarily associate this with urbanization. The chapter argues that urban growth is not automatically or 2 inevitably a progressive force because the negative effects can outweigh the positive, but with careful advance planning and investment in appropriate infrastructure it can contribute to fairer and more durable development. The first section outlines the conceptual issues surrounding the relationship between urbanization and development, followed by a summary of the global evidence. The next section considers recent patterns of urbanization and development in the BRICS, followed by their experience of policies to deter migration. Subsequent sections consider each country in turn, before the conclusion draws the threads together in arguing that urbanization can strengthen national economies through concentration, efficient infrastructure and functional spatial forms. THE URBANIZATION-DEVELOPMENT NEXUS Urbanization has been closely associated with economic growth and human progress in the north.2 Historically, the rising share of the population living in cities and towns was accompanied by higher incomes and broader improvements in people’s lives (Jacobs 1984; Hall 1998). Urbanization was bound up with the transition from predominantly agricultural economies to more advanced industrial and service economies, linked to an increasing division of labour and occupational specialization. Economic progress benefited from more people living in cities to stimulate consumer demand, supply labour, and support mutual learning and creativity. It also generated the resources and spurred the civic leadership to upgrade urban infrastructure and improve the spatial arrangement of towns and cities (Briggs 1968; Hunt 2004). The challenges of managing urbanization forced major technological advances in engineering, design and planning of the built environment. Greater efficiency and rising prosperity were the outcomes of what was on the whole a virtuous circle. An unresolved question from historical experience is how important urbanization was as a driver of economic development? Was it a prime-mover or more of an enabling condition? Similarly, did urbanization always and inevitably stimulate growth, or were other conditions necessary for this relationship to hold? These questions are critical in thinking about the 2 Urbanization is defined as the net shift of population and economic activity from rural areas to towns and cities. This is different from the urban population growth, which reflects natural growth (births minus deaths) as well as the rural-urban shift. The level of urbanization is the proportion of the population living in urban areas. The urbanization process can take different forms. It can be concentrated in a few large cities or spread across a range of cities and towns. Within each city it can take the form of compact physical development or urban sprawl and fragmentation. 3 implications for the south, where urbanization is occurring on an unprecedented scale and more rapidly than it did in the north. The socio-economic and environmental consequences for the whole world are therefore far more significant. These issues have been the focus of increasing research in recent years, although many question-marks remain. In theory there are good reasons for thinking that urbanization should contribute to economic development (Duranton and Puga 2004; World Bank 2009; Glaeser 2011). First, concentrations of population in close proximity create markets for firms that are more efficient to supply because of the economies of scale and savings in transport costs. Second, there is a large and expanding workforce for firms to choose from, enabling them to match their specific skill requirements better. Third, larger concentrations of firms mean bigger markets for suppliers and service providers, hence greater specialization, choice and competition between them. Fourth, bigger cities can bear the costs of more sophisticated infrastructure and logistics, including ports, airports, universities and telecoms for external connectivity. Finally, economic concentration intensifies the flow of ideas and information between firms, leading to greater creativity and ingenuity. Positive feedback loops mean there are dynamic effects at work that go beyond one-off efficiency gains. A self-reinforcing, cumulative process attracts mobile capital and talent, generates more varied and superior products, and locks-in more durable forms of development through continuous adaptation, upgrading and innovation. These advantages of urban growth are counteracted by several negative externalities. Rising congestion and overloaded infrastructure increase business costs and may require firms to invest in their own power supplies, water systems and transport services. Large cities tend to have higher property and living costs because of the competition for space, which can reduce business competitiveness and deter investment. Uncontrolled urban expansion increases air pollution, damages ecosystems and reduces the quality of life for workers with a choice of where to live. These drawbacks increase as cities expand, especially if the form of physical development is haphazard and poorer communities are concentrated in overcrowded and squalid living conditions. It is particularly hard for city governments to accommodate the pressures generated by rapidly-growing mega-cities and avoid dysfunctional outcomes. WHAT DOES THE EVIDENCE SUGGEST? 4 There is a growing body of research that has tried to quantify the advantages of urbanization. This is difficult because of the complexities of disentangling the particular urban effects from other influences on economic growth, and uncertainties about timescales, variations between sectors and feedback effects. Studies have adopted different measures and techniques, which makes it difficult to reconcile their findings. One of the simplest methods is to compare the prosperity of different countries with their level of urbanization, measured by the proportion of the population living in urban areas. Many results suggest that there is a broad statistical relationship – more urbanized countries tend to be more developed (UN-Habitat 2010). Henderson (2010) confirmed a strong correlation between urbanization and average income in 2004 for a large group of countries around the world. Yet the spread of observations around the line of best fit was wide, indicating that other factors are also involved. In addition, a statistical association does not mean a causal connection, let alone specify the direction of causation, since there may be more influential forces at work that are not included in the correlation. As an aside, another important feature of such correlations is that they are non-linear. In other words, the rate of urbanization is most rapid in countries with the lowest levels of economic development. These countries can least afford to invest in the infrastructure required to facilitate orderly urban development and to avoid the bottlenecks and resource constraints that may obstruct economic growth. It is little consolation to explain to the poorest countries facing the greatest social dislocation that everything will turn out right within a generation or two. A range of more sophisticated econometric studies in the north has sought to quantify the benefits of agglomeration. They use different variables to capture the effects and different modelling approaches, so their findings are diverse (Eberts and McMillen 1999; Duranton and Puga 2004; Turok and McGranahan 2013). Many conclude that cities do offer economic advantages although they are not as big as often suggested by agglomeration theory or urban policy proponents. A useful review of the evidence concluded that the productivity gains from doubling the size of a city are between three and eight per cent (Rosenthal and Strange 2004). A subsequent review concluded that the variation is even greater because local and national contexts are so different (Melo et al 2009). 5 Many studies conclude that there are different kinds of agglomeration effect (Duranton and Puga 2004). Some emphasize that the advantages stem primarily from industrial diversity because this confers adaptability. The opposite applies in a second group of studies, where the greatest benefits come from firms clustering within the same industry (Melo et al 2009). A third set of studies emphasize the importance of amenities and the quality of life in supporting the growth of consumption-based sectors, such as entertainment, hospitality, tourism and the creative industries (Glaeser 2011). These contrasting findings indicate that one cannot make simple generalisations about the strength of agglomeration economies. There is no realistic prospect of finding universal laws governing the urbanization-development relationship. Context is bound to be crucial, including (i) the form of urban growth (e.g. highly concentrated or dispersed), and (ii) the role of government policy (e.g. in enabling more functional forms of development through infrastructure investment). Fast-growing cities in low- and middle-income countries are bound to be more vulnerable to the diseconomies of agglomeration because it is harder to finance the infrastructure required to avoid this. EVIDENCE FROM THE BRICS There have been few quantitative studies of agglomeration economies in the BRICS and other developing countries (Overman and Venables 2010). This is a serious gap in the evidence base, given where mass urbanization is clearly happening. In the absence of a detailed analysis, a simple descriptive exercise can yield some useful insights. Figure 1 shows the relationship between urbanization and national economic progress (defined as GDP per capita) for the five BRICS countries at two points in time, 1985 and 2011. It draws on the World Development Indicators database and shows a consistent positive relationship for all five countries – they all became more urbanized and more prosperous over this period. This suggests that there is some connection between urbanization and development, although it is variable in strength, even among this small sample. {insert figure 1 around here} Another important point from Figure 1 is that Russia, Brazil and South Africa were already quite urbanized by the 1980s, whereas China and India were still predominantly rural. Russia, 6 Brazil and South Africa had experienced substantial urbanization alongside industrialization for at least half a century before the 1980s. India’s rate of urbanization began to accelerate in the 1980s, whereas China’s really took off during this decade. China has experienced by far the greatest increase in prosperity since the 1980s, with average incomes rising nine-fold from USD 290 per capita in 1985 to USD 2,640 in 2011 (in constant 2000 prices). Urbanization more than doubled from 23 to 52 per cent. Around three-quarters of the urban population growth was driven by migration rather than natural change. China’s progress has been spectacular, described by Joseph Stiglitz as ‘probably the most remarkable economic transformation in history … Never before has the world seen such sustained growth … (and) so much poverty reduction’ (2006). The country seems to have benefited enormously from its urban transition. Average incomes in Chinese cities are also related to city size (OECD 2013). GDP per capita in the 25 largest cities, for instance, is double the level of the cities that make up the 100-125th size band. India also experienced substantial economic progress, with average incomes rising more than three-fold from USD 264 per capita to USD 838 (in constant 2000 prices). Its level of urbanization increased from 24 to 31 per cent. The pace and extent of economic development and urbanization in India was broadly in line with other Asian countries, although India started from a lower base (Turok 2013). India experienced nothing like China’s all-round transformation, although there was considerable improvement. Brazil and Russia both had much higher levels of urbanization and development to begin with in the 1980s. Brazil continued to urbanize and prosper, while Russia stagnated. This was a traumatic period covering the collapse of the Soviet Union, the forced transition to a market economy and the subsequent gradual recovery. Average incomes barely rose from USD 2,700 per capita to USD 3,050 (in constant 2000 prices), while the level of urbanization increased very slightly from 72 to 74 per cent.3 Meanwhile, average incomes in Brazil rose by nearly 50 per cent from USD 3,300 per capita to USD 4,800 (in constant 2000 prices). Its level of urbanization increased from 70 to 85 per cent. Brazil’s trajectory has been broadly in line with that of other Latin American countries. 3 Russia’s experience is not discussed further in the chapter because of the book’s focus on the global South. 7 In contrast, South Africa started from a relatively prosperous position on a par with Brazil (in terms of average incomes), but experienced far less economic dynamism subsequently. This period also covered a dramatic political transition to democracy. Average incomes in South Africa rose by only 17 per cent from USD 3,260 per capita to USD 3,830 (in constant 2000 prices). The level of urbanization increased with the demise of apartheid from 49 to 62 per cent. South Africa has not benefited from its urban transition like most Asian and Latin American countries (Turok 2013). Local conditions seem to have inhibited the development of its city economies. A more detailed, qualitative analysis drawing on other evidence and research is needed to get behind these important patterns. We consider China’s urban transformation first. CHINA’S PURPOSEFUL URBANIZATION China has the largest population in the world and the second largest economy. Its explosive urban surge in the last 30 years is linked to its dramatic economic transition from an agrarian to an industrial society (Miller 2012; CSCIEAS 2012). The government has played a key role in shaping this trajectory. Until the late-1970s urbanization was resisted in favour of rural development, especially during the Cultural Revolution of 1966-76. During this period the urban population was growing by less than five million a year, compared with 20 million a year in the last decade. Urbanization accelerated after the economic reforms of 1978, when the fierce anti-urban policy was relaxed. China’s efforts to industrialize during the 1980s were still strongly rural, and quite unlike the subsequent city-focussed growth (McGranahan et al forthcoming). Farmers were given more responsibility for their agricultural produce to increase output and efficiency. Many small enterprises were established to support mechanisation and to process the crops and livestock. This spurred rural industrialization and migration towards towns and small cities (McGranahan et al forthcoming). An explicit policy objective after 1979 was to support industry in smaller cities so they could transform the countryside (OECD 2013). Another long-standing objective was to constrain the growth of large cities by building satellite cities around them. These now form the basis of clusters of cities with tens of millions of people within each one (CSCIEAS 2012). 8 The government pursued a highly effective combination of vision and pragmatism whereby particular locations and enterprises showing the greatest potential were given extra support. Special economic zones sited in undeveloped coastal regions offered big incentives to attract foreign investment and export-led industrialisation. Obligatory linkages with local suppliers meant valuable spinoffs from the transfer of technology and managerial skills. These early achievements encouraged other territories in the south-east to be opened-up, and by the 1990s these billowing coastal cities were China’s main economic engines. They were magnets for vast flows of domestic migration and investment which depressed labour costs and fuelled the growth machine. Incomes have risen more rapidly in these cities than elsewhere as a result of higher productivity, strengthening further migration (Webster 2011; OECD 2013). The government recognized, rewarded and sought to replicate success by steering resources to selected regions and continually innovating institutions (McGranahan et al forthcoming). Additional powers and responsibilities were devolved to local governments to incentivize economic development. Smaller municipalities were merged to create larger and more capable entities, and to give cities more control over surrounding land for development. The expropriation of agricultural land and its conversion to industrial and residential uses has been a key feature of China’s urban growth engine. The uplift in land values and growing tax revenues from industry have financed urban infrastructure, facilitated catalytic construction schemes and helped city marketing efforts through flagship projects (McGranahan et al forthcoming). Larger cities also have powers to issue bonds to fund new roads, water and other infrastructure. China’s current five-year plan explicitly calls for more urbanization and supports the emergence of mega-cities (Miller 2012; CSCIEAS 2012). The theory of agglomeration economies is described as “the objective law of urban development” (CSCIEAS 2012: viii). The land conversion process has been highly controversial, contributing to inefficient land uses, road-oriented development and environmental degradation (Johnson 2013). It has also been a source of property speculation among developers, a black market in land, corruption in municipalities and much illegal construction (Miller 2012). Ambiguous property rights have been manipulated to secure land from rural collectives and peasant farmers in order to sell it for development. National rules have encouraged this by enabling municipalities to retain most of the proceeds. The process has become so important to China’s growth trajectory that central government has sought to gain greater control over it in order to boost or cool the 9 economy as required. For example, a law was introduced in 1999 to slow down the rezoning of agricultural land for urban development (OECD 2013). There has also been growing resistance from below among displaced farmers forced make way for redevelopment, prompting counter-efforts to strengthen their property rights (Johnson 2013). Nevertheless, rapid urban growth has been supported by fast-track regulatory procedures, an absence of public participation, and unprecedented levels of investment in infrastructure, real estate and other fixed capital. China spends about 50 per cent of its GDP on such investment, including roads, power generation, railways, dams, ports, telecoms, factories, office buildings and housing. This is ‘the highest share in recorded history. During their great booms in the 1960s and 1970s, Japan and South Korea never topped 40 per cent’ (Leonhardt 2010). External observers have warned of the risks of over-development and property bubbles. However, the incessant demand from an expanding real economy and massive household growth have averted this (Miller 2012). Although China’s urban development machine has delivered impressive growth, certain groups have been excluded from the benefits. A household registration system (hukou) was introduced in the Mao era to control urbanisation. The permits have been eased to allow temporary migration, but these groups don’t enjoy the same rights to schools, health facilities and social services. The policy reduces the cost to municipalities while meeting industry’s demand for cheap labour. Rising prices in the booming cities also make housing unaffordable for poor migrants. Some farmers have received flats in high rise complexes to compensate for losing their land. Other migrant workers live in shared accommodation and hostels provided by their employers. Many migrants leave their families behind, which limits their children’s education, health and overall life chances (OECD 2013). Their second-class status means insecurity and lower disposable incomes than those with proper homes and social protection, who spend more on consumer durables (Miller 2012). Therefore the hukou system hinders the rebalancing of the economy as well as being unfair and divisive. Reform is beginning to happen, but it is complicated because migrants might have to surrender land rights in their rural areas and the possibility of having a second child, which is prohibited in urban areas. Another source of growing social inequality and associated political tensions is the spatial disparity between cities in the coastal belt and inland regions (Webster 2011). The government’s has recently extended the special support available to the coastal cities to the 10 interior and begun to invest heavily in roads, high speed railways and other connecting infrastructure in ‘logistics corridors’ (CSCIEAS 2012). There are some signs of firms moving inland to access cheaper labour, but it is obviously too soon to say whether inland cities will be able to narrow the gap. Environmental concerns have also moved up the political agenda, following decades of ecological damage and pollution to air and water courses from unrestrained industrialisation, dirty energy generation and rising car ownership. Chinese cities tend to be reasonably compact, but vast industrial parks make inefficient use of land, reflecting the frantic industrial development efforts of municipalities. Measures are being taken to reduce the carbon footprint and increase energy security, including major investment in renewable energy, public transport, green buildings and experimental green cities (CSCIEAS 2012). Severe congestion in the big cities is another reason for the growing emphasis on urban subways and other public transport. In summary, China’s experience over the last three decades illustrates the economic forces that can be unleashed by urbanization. Aggressive investment in infrastructure and land development have complemented rapid industrialisation, resulting in major increases in productivity, jobs and living standards. Rural-urban migration has fuelled the process by providing a continuous stream of workers to replenish the workforce. Urban policy has been geared above-all to fostering economic growth, with less concern for social equity and environmental sustainability. This is changing as the government seeks to rebalance the economy and stimulate domestic consumption. Consumer-driven growth will be led by the major cities and influenced by the extent to which migrant households gain greater security, become more integrated socially, and adjust from savers to spenders. This also implies a new kind of urban growth, based on creating more liveable and inclusive cities. INDIA’S RELUCTANT URBANIZATION India has the tenth largest economy in the world, and the second largest population. Its colonial history and complex religious, caste, ethnic and territorial divisions left a legacy after World War 2 of a backward economy, poor transport system and inefficient state bureaucracy. The colonial priority given to agricultural exports, mineral extraction and revenue transfers to the UK meant limited investment in manufacturing and infrastructure. 11 Public facilities were concentrated in a few leading port cities that catered for the privileged few (Kundu forthcoming). Cities were segregated into two parts – indigenous and European – to reduce the spread of infectious diseases and impact of social unrest (Chaplin 2011). Slum clearance was the preferred way of tackling overcrowded and insanitary neighbourhoods, with little compensation for the resettlement of displaced communities. Independence in 1947 brought important political changes and greater public investment in heavy industries, lagging regions and connecting infrastructure. The state began to play a growing role in the ownership and control of leading sectors and corporations, and promoting import substitution to increase self-reliance. Yet widespread inefficiencies meant little improvement in economic performance or living standards. Meanwhile, urban populations were growing strongly, mainly through natural change. Poverty remained very high because of poor urban growth management and under-resourced municipalities (Chaplin 2011). The provision of agricultural subsidies and support for improved farming practices gave some backing to impoverished rural areas. Major economic reforms were introduced around 1991 to reduce protections for domestic industries from foreign competition and to privatize nationalized entities. The objectives were to attract foreign investment, encourage domestic competition and increase global trade through exports. These and other policy changes, such as financial liberalization, helped to accelerate economic growth to between five and nine per cent a year over the following two decades. Growth has been strongest in the major cities, especially Delhi, Mumbai and Kolkata, where it has fostered a new middle class. This has spawned the expansion of consumer goods and services (such as retailing and hospitality) and new consumption practices and lifestyles (Fernandes 2004). ‘Global city’ aspirations have also influenced urban planning (Dupont 2011), although the government has been reluctant to divert resources towards the big cities. For example, Bangalore has secured an important position in the global IT industry, upgrading from call centres and back office work to higher value-added services, software programming, research and development (Van Riemsdijk 2013). India’s urbanization has also been oriented towards large cities because of the lure of jobs, but compounding the problems of concentrated poverty and squalid living conditions (Kundu forthcoming). Some of the physical growth has spilled over into satellite towns which may in due course become part of the metropolitan area as municipal boundaries expand. Large 12 factories, call centres and other enterprises are often established beyond municipal limits because of environmental restrictions within the city and special economic zones established outside. Poorer migrants build shelters nearby to try and find jobs or commute into the central city. Business owners, managers and engineers generally live in the central city (or in new suburban gated complexes) and commute to peripheral workplaces along rapid transport corridors. Low income residents are often displaced by urban growth, ending up in outlying squatter settlements. Meanwhile, residents’ associations and NGOs formed by upper- and middleincome groups have succeeded in exploiting participatory forms of local governance to pursue their own interests and oppose national slum upgrading programmes (Chakrabarti 2008; Kundu 2011). Transparency has improved as a result of this decentralisation of power, but at the expense of essential services for the poor (Chaplin 2011). Different levels of amenities are provided depending on peoples’ ability to pay, and little effort is made to expand the supply of affordable housing (McDuie-Ra 2013). Public spending on slum improvement has tended to decline and exclusionary practices such as evictions have increased, partly to ‘cleanse’ the cities of slums and enhance their image among investors (Dupont 2011). The chief concerns of residents’ associations in middle- and upper-income areas are security, improved amenities and privatisation and enclosure of public spaces, shopping malls and residential areas. They seek to sanitize their neighbourhoods by removing encroachments, squatters and informal enterprises seen as threats to their health and safety (Fernandes 2004; Kundu 2011). The outcome is a more general anti-urbanization stance and exclusion of poor communities, reinforced by India’s entrenched social stratification, high levels of destitution, and enduring infrastructure deficiencies (Kundu forthcoming). McDuie-Ra (2013) describes the discrimination against and harassment of migrants seeking housing and work opportunities in Delhi’s call centres and shopping malls. There is little apparent understanding of, or sympathy for, the needs of poor migrant families for shelter, livelihoods and better living conditions. The problems are compounded by government policies that seem to ignore the economic potential of urbanization. There have been many attempts to stem migration flows, both through overt urban restrictions and policies to skew economic support to rural regions. Some 13 are indirect, such as inferior public services and inadequate police protection for migrants experiencing hostile attacks. Recent national development plans recognize the value of large cities, but they also criticize the concentrated pattern of growth. Instead they talk about promoting spatially-balanced urbanization through satellite towns, small towns and new townships. Nonetheless, India has never had a coherent urban development policy, despite the deterioration in environmental conditions (Chaplin 2011). A major infrastructure programme was launched in the mid-2000s, called the Jawaharlal Nehru National Urban Renewal Mission. It aimed to streamline local government in 63 cities in order to expedite improved water supply, sanitation, sewage treatment, roads and flyovers. Yet there was no provision to improve facilities in low income areas where services are unaffordable (Kundu forthcoming). A subsequent initiative called Rajiv Awas Yojana was launched in 2009 with more of a pro-poor emphasis (Chaplin 2011). Both programmes suffer from under-spending and illustrate deep dilemmas about how state support should be distributed between different cities and towns. The largest cities are best equipped to leverage additional public, private and global finance, but supporting the smaller cities may help to avoid the excesses of growth concentrated in a few mega-cities. A difficulty with recent economic trends in India is that the leading sectors are not strongly labour absorbing or do not generate the scale of multiplier effects of manufacturing. Service industries such as IT, banking, media, publishing and hospitality also employ few manual workers. Consequently, the employment intensity of India’s recent growth has lagged behind its GDP performance, unlike China’s vigorous industrialisation and employment growth. Some observers blame India’s high levels of unemployment and informal employment on long-standing labour regulations which inhibit recruitment (Van Riemsdijk 2013). There could be at least another 400 million people in India’s workforce by 2050, over and above the current 500 million. Agriculture and related activities currently provide a subsistence living to about 220 million. These sectors cannot absorb the additional labour without further reducing existing low incomes. India will have to undergo a major economic transition to secondary and tertiary industries, hand-in-hand with mass urbanisation (Kundu forthcoming). The country’s future prosperity and stability depends on how this occurs. 14 The larger cities could become more inclusive and absorb more people (Kundu forthcoming). Careful forward planning, industrialisation and provision of cheap housing and services could provide channels for social mobility, skills acquisition and consumer demand to help broaden India’s economic dynamism. Public health and environmental programmes need to shift from crisis management towards preventative and pro-active measures that benefit all sections of society (Chaplin 2011). Such measures are resisted by urban elites, whose political power has grown with economic success. However, excluding millions of people in the countryside while a wealthy minority enjoys an exclusive urban lifestyle is a recipe for conflict. India’s economy has shown its strong growth potential, but its urban policies will influence whether this is sustained and diversified over time to benefit the many. To sum up, India’s far-reaching economic changes over the last two decades have improved living standards for many people. However, employment has lagged behind output growth and urbanization remains low and exclusive by international standards. The drive for global competitiveness and foreign investment is somewhat narrow considering the country’s demographic pressures and inability of rural areas to absorb many more people with viable livelihoods. It seems that the cities will need to become both more productive and more inclusive if they are to make a fuller contribution to national development in the years ahead. BRAZIL’S CARELESS URBANIZATION Brazil urbanized earlier than the other BRICS (particularly between 1940 and 1980) and has continued since then, albeit at a slower rate (Martine and McGranahan forthcoming). The country has prospered over the last two decades, partly through strong global demand for its commodities and substantial state support via cheap credit for ‘national champions’, i.e. large private and state-controlled companies in sectors such as oil, iron ore, agro-processing and aircraft manufacturing (Leahy 2013). It now has the seventh largest economy in the world, and the fifth largest population. Brazil illustrates how urbanization and industrialization tend to proceed hand-in-hand, rather like China. The country has gained an international reputation for innovation in urban design, planning and governance since the advent of democracy in 1985. A new approach towards cities was signposted by a chapter on urban policy written into the new constitution. The urban agenda has been driven by strong social movements and professionals working for municipalities and 15 universities in housing, planning, architecture, engineering and law (Fernandes 2011; Rolnik 2011). Previous regimes consistently tried to resist urbanization. Their failure to prepare contributed to severe transport congestion and the infamous favelas that cover the hillsides with overcrowded, unplanned and unsafe settlements. Intense poverty and environmental hazards persist for these communities, despite sustained economic growth. Brazil’s early settlement pattern was shaped by Portuguese colonial rule between the 15th and 19th centuries. Their main objective was to exploit the country’s natural resources and foodstuffs. An extractive agricultural and mineral economy was developed, with port towns and cities created as gateways into the hinterland and transhipment points for getting the produce back to Europe (Martine and McGranahan forthcoming). A new source of urban dynamism emerged during the late 19th century with the commercialisation of coffee production in São Paulo state, leading to a growth axis emerging to Rio de Janeiro. Import-substituting industrialization was the catalyst for rapid urbanization, especially after the coffee economy crashed in 1929 with the Great Depression. The country’s population was growing rapidly during the inter-War years through falling mortality. Serious international debts, balance of payments problems and difficulties in importing supplies forced the state to invest in industrial production. This initiated a powerful, self-reinforcing dynamic of urbanization and industrialization focused on the major cities, and bolstered by the entrepreneurialism of the domestic and international migrant communities (Martine and McGranahan forthcoming; Feler and Henderson 2011). Wartime production boosted import substitution further and the state intervened extensively to develop the transport and communication sectors with a view to creating an integrated national market for domestic producers. Central planning was strengthened, major roads constructed and substantial assistance given to develop car manufacturing with its strong backward and forward linkages. Following a military takeover in 1964, the new regime tried to modernize agriculture through incentives favouring large farms. Mechanisation boosted demand for the machinery and chemical fertilizers produced in cities, but displaced millions of small-scale farmers and farm workers. Frontier areas in the Amazon region were opened up to absorb agricultural migrants, and even here new towns and cities thrived (Martine and McGranahan forthcoming). 16 The number of towns and cities in Brazil with over 20,000 residents grew from 59 in 1940 to 867 in 2010. This coincided with growing concentration in larger cities. Between 2000 and 2010, one-million-plus cities accounted for 54 per cent of urban population growth. This is now slowing down, for three reasons: fertility decline, economic difficulties, and industrial dispersal from São Paulo towards less-congested regions (Martine and McGranahan forthcoming). Brazil’s urbanization occurred despite the opposition of most political regimes. It was resisted because of the administrative, social and environmental problems it was thought to create, but denial simply worsened conditions. The negativity peaked during the most rapid urbanization period between 1950 and 1980. Yet it was fuelled by the state’s own industrial and agricultural policies (Feler and Henderson 2011). During the 1960s explicit measures were taken to stem the process, ranging from roadblocks to fiscal incentives. Regional planning initiatives tried to reduce migratory pressures by stimulating activity in outlying regions. When migration continued, the government tried to curb urban growth by restricting or removing the unplanned slums, or depriving them of basic services. Failure to prepare for population growth damaged the cities’ ability to expand in a sensible manner. It was particularly harmful for the poor majority who had to fend for themselves in tight housing markets with scarce land available. They were forced to build makeshift shelters wherever they could on steep slopes, areas prone to flooding and other precarious locations. Some informal settlements were reasonably central but many were on the city outskirts with little prospect of securing public services. Environmental and social problems have accumulated and dwellings have been consolidated, leaving a complicated legacy to be addressed through a mixture of upgrading, renewal and redevelopment. Since 1985 the government has emphasized participation and decentralization. Problems are to be resolved through dialogue rather than diktat. Urban reform has moved up the political agenda and is central to making democracy real and reducing inequality. A 2001 law called the Statute of the City established the foundations and was followed by the creation of a Ministry of Cities in 2003. Bottom-up urban planning and participatory decision-making are encouraged through all sorts of public forums. Landowners and other powerful groups have to defend their interests in public rather than behind closed doors, and municipalities have to balance different considerations more carefully in regulating development (Fernandes 2011). 17 Meanwhile, legal reforms have given low-income citizens greater rights to the property they occupy, which will improve their security and assets. In practice, progress in integrating informal settlements and improving living conditions has been patchy and sometimes slow. This is partly because local plans take time to formulated and implemented, the solutions are not straightforward, financial resources are constrained, and the politics are complicated with many disputes over the use of land (Fernandes 2011; Rolnik 2011). A proactive approach to providing housing for the poor is still unusual, and migrants encounter persistent resistance when trying to settle in particular cities or neighbourhoods. Meanwhile, national government has introduced a range of important education and social welfare reforms that have already had a measurable impact on inequality. Participatory budgeting is another feature of democratic urban management. Civil society is directly involved in defining priorities for municipal spending in more than 200 cities. Porto Alegre is the most famous, following the election of a mayor from the Workers’ Party in 1989 (who later became the first Minister of Cities). Part of the municipal budget is put up for local negotiation with social movements and citizens. They discuss local needs and priorities in 16 districts every year. Decentralization has also fostered greater creativity and experimentation in urban design. For example, imaginative new affordable housing is being built in the large Heliopolis favela of São Paulo, along with new public spaces and schools to transform the area. A broader culture of institutional learning and capacity building is being established by sustained state support for independent bodies such as the Brazilian Institute of Municipal Administration (IBAM) and the Curitiba Institute of Urban Planning and Research. The Ministry of Cities is also tasked with strengthening municipal capabilities. A National Council of Cities engages diverse stakeholders in discussing national urban policy. Of course Brazil’s urban problems remain formidable and it is premature to expect major achievements. Democratic efficacy depends on an organized civil society and informed citizens, which emerge slowly given the legacy. The capacity of different groups to advocate their interests is very variable, as in India. Historic backlogs in urban infrastructure and housing are very costly to address. The government has been criticized in some quarters for providing excessive support for national champions and insufficient investment in transport 18 and other economic and social infrastructure (Leahy 2013). This may be why Brazilian urban economies have been under-performing in recent years in the face of tough international competition (Martine and McGranahan forthcoming). Other factors may include high levels of crime, informality, under-funded municipalities and inadequately regulated land markets. In summary, state-sponsored industrialisation in Brazil drove a long-term process of urbanization. Persistent efforts to resist urban population growth made little difference, except to create an exclusionary form of urbanization. Poor communities were forced to occupy precarious locations and live in cramped conditions without public services. Belated efforts to manage urban growth more strategically and redesign the built environment on more inclusionary principles are inevitably more complicated and costly, implying that social and environmental problems will probably persist for several decades to come. Since the 1990s urban planning has been taken much more seriously, reflected in a range of important social, environmental, legal, transport and design innovations. The impact of these deserve to be monitored closely by the international community. SOUTH AFRICA’S CONTESTED URBANIZATION South Africa is one of the most urbanized countries in Africa, with the largest economy. Industrialization was the driving force behind urbanization, in China, India and Brazil. The catalyst was a mining boom in the late 19th century that continued through most of the 20th century. South African urbanization has been affected by similar destructive influences to those in Brazil and India, albeit in a more extreme form because of overt discrimination. It was forcefully resisted under the apartheid political regime at enormous human and social cost. Apartheid also skewed the built form in distinctive ways, leaving fractured cities with dense poverty traps on the outskirts. There is a continuing legacy of inequality, informality, infrastructure backlogs and transport congestion, which hamper progress to this day. Urbanization has been controversial for over a century, posing dilemmas for successive governments and resulting in wide-ranging interventions, initially to accelerate it and later to control it. In the late 19th and early 20th centuries, a stark form of racially-segregated urban development was instituted. This reflected industry’s insatiable appetite for cheap migrant labour, alongside political nervousness among the white elite about black urbanisation (Wilson 1972). 19 The need to assemble a large workforce had profound ramifications (Yudelman 1984). It transformed South Africa from a patchwork of agrarian states to a unified industrial nation with a strong political centre in the early 20th century. Gold mining was the mainstay of the economy for decades, and almost the only source of export revenues. The mining boom stimulated other industries, such as chemicals, civil and mechanical engineering, and banking (Harrison and Zack 2012). Growing rural-urban migration, gold exports and increasing urban demand for rural produce prompted major investment in the country’s transport and communications infrastructure to link the ports and surging inland towns and cities. Large population shifts were essential to the mining boom. Early on, most labour came from neighbouring autonomous African states on a temporary basis, establishing a pattern of ‘circular’ migration. Companies introduced large residential compounds or hostels to keep migrant workers on site for control and to prevent poaching. These closed complexes offered food, accommodation and cheap beer, but were also notorious for disease, malnutrition and cramped conditions. The mineral revolution also had a big impact on political developments. In order to secure a regular flow of workers to the mines, the colonial government began to annex neighbouring African states and introduce rural taxes to coerce migration. The Anglo-Boer War in 18991902 can also be traced to the mining boom and the British desire to remove potential threats to mineral exports and facilitate industrial expansion. Mining had a profound impact on social relations and lay behind the draconian apartheid system of legalized racial discrimination and subjugation. This shaped urban patterns for a century through various forms of social and spatial engineering (Turok forthcoming). The political desire of white leaders to restrict migration came into increasing conflict with the economic imperative for additional cheap labour. The system of transient migrant labour was a compromise, with black workers forced to bear the costs of spatial dislocation. It benefited the mining companies because workers’ families were left in the rural areas to carry on farming, which moderated their wage requirements and housing costs (Wilson 1972). Companies could also adjust their workforce in line with changing production needs more easily than if they were permanent employees. The essential features of the migrant labour system persist today and were partly responsible for the Marikana disaster in 2012. 20 During the first half of the 20th century a series of laws were passed that restricted urban development and denied land and citizenship rights to blacks in urban areas. Their aim was racial separation and containment of an ‘undesirable tide’ of black urban migration (Maylam 1990). But mining and industrialization were exerting an irresistible pull on rural migration, which stoked political nervousness among the white elite. After the Second World War, these sentiments prevailed and draconian controls were imposed to suppress black urbanization in order to sustain white lifestyles and political domination. A suite of new laws began to entrench segregation by compelling people to live in different places classified by race. Residential areas were separated by physical barriers (‘buffer zones’ and freeways) and laid out in ways that permitted military control in the event of unrest. The resulting disconnect between jobs and homes was worsened by economic restrictions preventing blacks from starting enterprises within the cities. Poor public transport meant long and costly journeys to work. Strict influx controls criminalized peoples’ efforts to secure livelihoods and created a hostile climate of surveillance and intimidation. Although the restrictions did not halt urbanization, they slowed it down, particularly during the height of apartheid in the 1960s and 1970s (Turok forthcoming). South African cities now have low population densities in central and suburban locations and high densities on the periphery. This distorted urban form has harmful human and environmental consequences. It creates poverty traps on the periphery and favours road-based transport. Cities remain the dominant centres of economic activity, but they are not performing to their potential or reaping the benefits of agglomeration because of their inefficiency and infrastructure constraints (Msulwa and Turok 2012). A modelling exercise found that ‘over 10 years, a sprawling city will cost R57 billion more than a compact city, equal to 1.4% of projected GDP’ (Financial and Fiscal Commission 2011: 3). The post-1994 democratic government recognizes the problems of a fragmented urban form, but its interventions have been too short-term and sector-specific to initiate change. Spatial planning has struggled to rebuild its reputation, having been an instrument of apartheid. Some pro-poor policies (such as the way in which public transport is subsidized) have reinforced people’s exclusion by subsidising the cost of living on the periphery, rather than supporting better location decisions (Turok 2013). ‘Service delivery’ has become the dominant narrative across government, implying the roll-out of separate housing, electricity, water and other 21 programmes run by different departments. They respond to where the population is growing, which tends to be where there is cheap or leftover land available, rather than planning ahead based on a vision of more integrated, functional and productive cities. The practical effect has been to perpetuate inherited spatial patterns of segregation and exclusion rather than to reshape them. With the demise of apartheid, repressive controls were withdrawn and urbanization rates recovered. The government now seeks to treat cities, towns and rural areas even-handedly, in line with the constitutional principle of equity. There is no explicit policy either to support or discourage migration, because of its sensitivity and perceived negative effects on both sending and receiving areas. This neutral stance has generally avoided the serious social damage of the past, but little has been done positively to transform the legacy of urban segregation. Similarly, the pursuit of economic development in cities is less vigorous than in many other countries. Ambivalence about urbanization also translates into a reactive and somewhat indifferent approach towards informal settlements and backyard shacks (Huchzermeyer 2011). South Africa’s experience since 1994 holds important lessons for other urbanizing countries. It shows how formulating progressive policies and passing laws are not enough to initiate integrated urban development and harness the potential of urbanization. Broad policy aspirations and sectoral programmes need to be translated into concrete city-level strategies set within a long-term vision of a better future. Such strategies need to engage local communities, the private sector and other stakeholders in order to channel their energies in common and constructive directions. Brazil’s experience has been similar, except that there is more urban creativity and experimentation, economic conditions have been more favourable, and inequality has been addressed more systematically. A broader lesson is that the processes of urbanization and industrialisation are politically mediated and may not automatically improve the livelihoods of migrants. People moving to cities may have to organize themselves to press for well-located land on which to settle, better living conditions and skills to access to labour markets. Constitutional rights for the poor can promote their cause, especially if backed by political will and government resources to meet their basic needs. Equally important are determined city-level leadership and 22 investment plans that manage urban development more effectively, boost jobs and livelihoods, and work with communities to improve their well-being. CONCLUSION Countries in the south can learn useful lessons about the relationship between economic development, poverty reduction and urbanization from the BRICS nations. The contribution of urbanization to the overall transformation of these countries is not widely appreciated. The role played by their governments in managing the urban transition is also crucial. Each nation faced great dislocation as they urbanized, especially when they tried to resist the process, or when people were steered towards unsuitable locations. In addition, the comparison provides examples of how urbanization can strengthen national economies through concentration and efficient spatial forms. It seems that carefully planned urban growth can strengthen prosperity and well-being. Finally, the BRICS experience indicates the importance of steering urban development onto a more compact and sustainable path because of the damage caused to the natural environment by negligence. The question posed at the outset was whether urbanization helps to spur economic progress. From the evidence assembled the answer is that there appears to be a close relationship between urbanization and development, but it is not automatic or linear. A variety of other conditions seem to be important in influencing the extent to which urbanization raises living standards. Industrialization proved significant in creating the kinds of jobs required by lessskilled rural migrants, and in generating multiplier effects on a scale required to constitute an engine of growth. The role of the state was also significant – potentially positive but also damaging if decisions are dominated by narrow sectional interests. China and Brazil show the state’s catalytic role in industrialisation and income generation, but also problems of inertia and inflexibility if it inhibits adaptation and diversification to shifting conditions. The role of city government deserves fuller treatment than has been possible here. There is evidence that municipalities are more responsive to changing realities on the ground than national authorities, particularly for managing the built environment. The availability of welllocated, serviced land to accommodate physical growth seems to influence whether urbanization is functional for development, illustrated by China’s urban growth machine. 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World Bank (2013) Planning, Connecting and Financing Cities - Now, Washington DC: The World Bank. Yudelman, D. (1984) The Emergence of Modern South Africa: State, Capital, and the Incorporation of Organised Labour on the South African Gold Fields, 1902-1939, Cape Town: David Philip. 28 1985 2011 GDP per capita GDP per capita (constant 2000 Share of urban (constant 2000 Share of urban US$) population % US$) population % Brazil 3334 69.86 4803 84.6 South Africa 3262 49.37 3825 61.98 China 290 22.87 2640 51.77 India 264 24.34 838 31.29 2700 72 3050 74 Russia Figure 1: The relationship between urbanization and development in the BRICS share of urban population,% 90 Russia 75 Brazil 60 China 45 30 South Africa India 15 0 80 800 8000 GDP per Capita, constant 2000 US$ 29