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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.
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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
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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.
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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?
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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).
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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,
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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.
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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).
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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
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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
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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.
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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
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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
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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.
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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.
When the functions of land-use planning and infrastructure are neglected, the social and
environmental costs of haphazard urban development are considerable, as shown by South
23
Africa, Brazil and India. Democratic government can reduce the risks of exclusionary urban
policies, but it needs to be backed by effective powers and resources to influence stubborn
spatial patterns. Serious gaps in knowledge mean there is a major research agenda for
exploring how the imperative of economic development relates to processes of inclusive and
sustainable urbanization in different contexts of the global south.
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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