Globalization isn’t exactly new. The ancient Greeks

were pretty good at it for the part of the globe they

knew, as were the Renaissance Florentine bankers

and their successors in 19th-century London. More recently, as British General Motors employees in Luton, outside

London, and Ford workers in London’s Dagenham looked

at their last pay checks, they might have reflected that globalization created their jobs in the 1920s and eliminated them

in the 2000s. Capitalism, as Joseph Schumpeter famously

said in 1942, is an endless process of creative destruction.

That is its genius, and its curse.

Of course, globalization has vastly extended its reach over

the last thirty years,as transnational corporations have extended their grip ever more widely across the world.

Technological colonization means that low-wage countries

can acquire state-of-the-art technology almost at the drop of

a hat, provided they offer the right base of hard and soft infrastructure: highways and high-speed telecommunications and

container ports, but also schools and universities and the rule

of law.That requirement increasingly divides the former Third

World into the high achievers (much of East Asia, including

now the coastal provinces of China, plus part of Latin

America) and the still-struggling (most notably sub-Saharan

Africa).The important point, as always, is that organized technology is the driver that makes poor countries and poor cities

rich. If you doubt that, look at Hong Kong and Singapore,

which achieved the trick in one generation, or Guangzhou

Province in China which could do it in even less.

One important question is what this process of creative

destruction does for the cities of the developed world. Some

of the answers are clear, others a lot less so. It is already quite

evident that in the last thirty years cities like London and

New York, Manchester and Pittsburgh, have lost much of

their manufacturing base. Indeed the cities generally recognized as the global leaders, like London and New York, have

suffered just as grievously from this process as more archetypal industrial cities, since—a point often ignored—they were

great centers of manufacturing.They have massively gained in

advanced services—banking,insurance and real estate,specialized commercial services, design services like architecture and

civil engineering and fashion, tourist services, cultural and

creative services—thus helping to keep employment in some

kind of equilibrium, but there have been massive shifts in

GLOBAL OUTLOOK

INTERNATIONAL URBAN RESEARCH MONITOR JANUARY 2001

Globalization and Urban Economic Prospects

SIR PETER HALL

University College, London

WHAT’S INSIDE

Message from the HUD Secretary . . . . . . . . . . . . . . . .2

Message from the Wilson Center Director . . . . . . . . .3

HUD’s New Global Initiative . . . . . . . . . . . . . . . . . . . . .5

New HUD-funded UCGIS International . . . . . . . . . . . . .7

Research Project

Metropolitan Economic Strategy . . . . . . . . . . . . . . . . .8

Recent Wilson Center National Conference on . . . . .12

Metropolitan Economic Strategy, and Upcoming

International Conference on Metropolitan 

Quality of Life

An Economic Vision for the Caribbean . . . . . . . . . . . .13

The Cities Alliance . . . . . . . . . . . . . . . . . . . . . . . . . . .16

The Future of the World’s Megacities . . . . . . . . . . . .18

Recent Wilson Center International Workshop . . . . .25

on Urban Governance

Decentralization, Democratization, . . . . . . . . . . . . . .26

and Urban Management

Urban Housing in Asia . . . . . . . . . . . . . . . . . . . . . . . .27

CONTINUED ON PAGE 4

Rome, Italy

US Department of Housing 

and Urban Development
“May you live in interesting times.” For centuries, the Chinese people have used this

expression as both a blessing and a curse. I

would argue that this period may be among the most interesting and significant in human history.

As we begin the 21st century, unprecedented, fast-paced

innovations in commerce, communications and transportation are blurring traditional national boundaries. Satellites

allow us to see and talk to one another across oceans, and

the advent of the Internet has revolutionized access to information and the ease of global commerce. Increased cooperation and trade have strengthened the links that bind nations

and tie their fortunes to one another.

This changing global environment challenges us to

reevaluate our relationships with—and responsibilities to—

our global neighbors. Increasingly the line between domestic and international policy is disappearing. We can no

longer afford to think and act parochially or provincially.

The rapid urbanization of the world’s population poses

special challenges.Twenty-five years from now, it is estimated that 60 percent of the world’s population will live in

cities. This demographic shift is already straining the

resources of governments and communities around the

world as they confront issues of economic development,

environmental protection, affordable shelter, infrastructure

development and urban sprawl.

In recent years, the United States has undertaken an

innovative agenda to address these global concerns here at

home. We have developed a sophisticated housing finance

and construction system that builds strong, safe and affordable homes for most Americans.We have worked to revitalize communities that have been left behind in the booming

new economy, by encouraging business development and

expanding access to capital.

As an advanced and prosperous nation, the United States

has a great deal of experience to share with other countries

around the world. However, when millions of Americans

live with worst-case housing

needs, and communities struggle to create economic opportunity, it is clear that we can

learn a great deal from the varied approaches and experiences of our global neighbors.

In the past four years, the

US Department of Housing

and Urban Development has

renewed its international presence. We have signed or

renewed bilateral agreements

with China, Israel, Mexico and

South Africa. We have launched long-term disaster recovery

projects in Honduras, the Dominican Republic and other

neighbors in Central America and the Caribbean.We have initiated joint planning efforts in cities along our common border with Mexico. Our partnership with South Africa has contributed to the passage of landmark home mortgage disclosure

legislation that will expand social justice to all South Africans.

But in the coming years, there is much more work to do.

The learning, understanding, and cooperation that we have

achieved with our international partners is just beginning.

That is why we are pleased to partner with the Woodrow

Wilson International Center—a respected voice in international affairs—to produce this quarterly urban research

monitor.The Global Outlook will chronicle these ‘interesting times’ and provide a forum for thoughtful discussion.

With this publication, we hope to increase awareness and

understanding of critical global issues.

President Wilson once said, “Friendship is the only

cement that will ever hold the world together.”Today, with

the Global Outlook, we are undertaking an initiative to foster that friendship. Through our partnership with the

Wilson Center, we hope to foster an honest dialogue about

the common challenges that nations face around the

world—and the shared solutions needed to bring justice

and opportunity to people and communities in an increasingly connected world.•

GLOBAL OUTLOOK

2

Message from US Housing and Urban Development

Secretary Andrew Cuomo

Secretary Andrew Cuomo in Israel with Prime Minister Ehud Barak, 

after establishing the US-Israel Bi-National Commission on Housing and

Community Development.

President Wilson once said, “Friendship

is the only cement that will ever hold

the world together.” Today, with the

Global Outlook, we are undertaking an

initiative to foster that friendship.
INTERNATIONAL URBAN RESEARCH MONITOR

3

The Woodrow Wilson International Center is dedicated to bringing together scholars and practitioners,

public policymakers and private sector leaders, to

meet the challenges of promoting greater understanding of

human interaction, public issues, and international relations

throughout the world. We connect history and the future,

academia and action, and most importantly, we do so based

on our commitment to promoting a global perspective on

meeting the future needs of people and places through policies, programs, and research projects. As part of our overall

activities in scholarship and public service, we have for many

years sponsored urban research and seminars, both through

our Comparative Urban Studies Project, and through our

Division of United States Studies. It is in fulfillment of this

mission that we have enthusiastically entered into a partnership with the US Department of Housing and Urban

Development to produce a new quarterly publication,

Global Outlook.

This “International Urban Research Monitor” will be

published quarterly and widely distributed both in printed

form and electronically

through the worldwide web.

It will review the latest and

most interesting ideas and

activities in urban research

and best practices from communities, cities, regions, and

countries on every continent

around the world. It is an outgrowth of an ongoing project

at the Wilson Center, coordinated by Public Policy

Scholar Marc Weiss, on the

global future of cities and

metropolitan regions. Dr.

Weiss is serving as editor of

Global Outlook, and many of

the Wilson Center’s senior

staff, fellows, and public policy

scholars will be working closely with HUD staff and the editorial advisory board to develop this new publication. The

inaugural issue includes two

short articles on recent Wilson

Center urban conferences and

other major events on the

horizon. We are pleased to

share international information

and insights with you, and look

forward to your involvement

with the Wilson Center, whether you visit us here in

Washington, DC, or via the internet at our website:

www.wilsoncenter.org.Thank you for your interest in creating and sustaining a brighter future for our increasingly

urban world.•

Message from Wilson Center Director Lee H. Hamilton

GLOBAL OUTLOOK, the International Urban Research Monitor, is published quarterly by the Woodrow Wilson

International Center for Scholars, One Woodrow Wilson Plaza, 1300 Pennsylvania Avenue, NW, Washington, DC

20004; and the US Department of Housing and Urban Development, Office of International Affairs, 451 Seventh

Street, SW, Room 8118, Washington, DC 20410.

EDITORS: Marc A. Weiss, Woodrow Wilson International Center for Scholars

(202) 691-4229 (ph); (202) 691-4001 (fx); WeissMA@wwic.si.edu 

Alven H. Lam, US Department of Housing and Urban Development

(202) 708-0770 ext. 5827 (ph); (202) 708-5536 (fx); Alven_H._Lam@hud.gov

Prague, Czech Republic
both industrial and occupational composition. As a result,

these cities exhibit the kind of structure Tom Wolfe caricatured for New York in The Bonfire of the Vanities:masters of the

financial universe,juxtaposed with pockets of unemployment,

poverty, and social problems.

Some have argued that the process of change in the new

global marketplace destroys low-level jobs and generates only

top-level ones: in economic terms, the rent to brawn declines

to zero, as male muscles are replaced by forklift trucks, while

the rent to brain constantly increases.In addition,some recent

research on the American labor market suggests it is more

complex than that: the real rent attaches to cognitive skills,

which correlate only imperfectly with years of formal education. In other words, a B.A. degree may give you a handsome

certificate but it doesn’t necessarily give you the kinds of

knowledge and intelligence you need to hold down a top job

in banking or real estate.The resulting labor surplus hunts for

jobs lower down the scale of skills and salaries,displacing high

school graduates who in turn displace school drop-outs.

Contrary to what most people think, the American economy

has generated huge numbers of entry-level jobs, in such areas

as catering and tourism and office support systems and health

care; one problem is that a number of them are being performed by over-qualified and over-educated workers.

Something like this may be happening in European cities

as well. The big difference is that there, with the possible

exception of the UK, labor markets are more rigid and welfare programs more generous, resulting in higher levels of

urban unemployment.Whatever the differences, urban labor

markets display odd kinds of discontinuities: in the poorest

neighborhoods, recent immigrants from Africa—many with

college degrees or professional qualifications—find entrylevel jobs in washing cars or cleaning offices, while thirdgeneration Afro-Caribbeans remain among the long-term

unemployed.There are some hidden stories concerned with

the informal and underground economies, no doubt;

researchers find that interviewees suddenly fall silent when

questioned about critical aspects of their sources of income,

or their neighbors’. People are getting by in such lowincome communities, or even moving on, despite glaring

lack of evidence as to the nature of their life support systems.

There is a question for the future.Technology never stands

still, and creative destruction will again follow in its wake.The

big changes this time could occur in the service industries.

Already, the business school professors are telling us that the

internet is beginning to have a huge effect on “B2B”—business to business transactions—by eliminating much of the

transaction costs that have always been a bottleneck in our

highly networked economic world. Consider one of the

fastest growing sectors of the 1990s: the ubiquitous call centers, that take your inquiries for airline tickets or auto insurance. Already, a significant minority share of all this business

has fallen victim to direct transactions on the worldwide web,

and much more is to follow: British low-fare airline Easyjet

does most of its business this way, and has just launched a

web-based low-price car rental service. Significantly, most call

center jobs seem to have been generated not in the large

globally oriented cities, but in the medium-sized provincial

cities: not in New York or London, but places like Salt Lake

City, Omaha, Glasgow, and Newcastle upon Tyne. (It’s well

known that whenever you pick up the phone in London, it

seems to get answered by a Scottish voice: even the new

London Development Agency has located its call center in

Scotland).These jobs, so rapidly generated in the 1990s, could

be just as rapidly eliminated a decade later.

Clearly, other kinds of urban jobs will not soon disappear. The worldwide web might eliminate some kinds of

teaching jobs, from elementary schools to universities, but it

will most likely generate others in creating new educational materials.Personal services jobs—nurses,waiters in restaurants, gardeners, tour guides—are not going to be automated very easily. Growth sectors, like health care and tourism

and culture, will continue generating more and more such

jobs. In fact it is highly likely that these will be the key

dynamic urban industries of the next two decades.

This means that cities should promote themselves above

all as centers of excellence in higher education, in advanced

health care, in specialized business and professional services

which can be exported to other places, in culture and in

tourism. What that implies is cities should be most concerned about their quality of life.As places like Glasgow and

Bilbao have shown, formerly grimy, metal-bashing blue collar meccas can convert themselves into European cities of

culture and tourism. As Birmingham in England demonstrates, a city can move from car-manufacturing to conventioneering.And as its rival Manchester is busy proving, a city

that promotes and develops its airport—now emerging as

one of Europe’s busiest—can compete as a magnet for

advanced services.The possibilities are endless. But the race

is constant, for the Schumpeterian principle will rule as long

as capitalism survives—a great deal longer, it appears, than

Schumpeter himself gloomily suggested sixty years ago.•

Sir Peter Hall is a Professor in the Bartlett School of

Planning, University College, London. He is author of

Cities in Civilization and many other books.

GLOBAL OUTLOOK

4

CONTINUED FROM PAGE 1

Bratislava, Slovakia
More than 1.5 billion people will be added to urban

populations across the globe during the next 25

years, when 60 percent of all the world’s people

will be living in or near major cities. Not only are the people and economies of rich and poor nations becoming

increasingly urbanized, the cities of the world are becoming

increasingly globalized. With the establishment of crossnational entities like the European Union, and the devolution of national power to cities and their surrounding metro

areas, these city-states have become loci of political power

and decision-making. Cities now function as focal points in

international labor and financial markets, are subject to

international regulations, and produce environmental

impacts that are viewed not only as regional issues, but as

issues that cross national borders.

Capital and labor are attracted to cities that perform well,

and, with devolution, the quality of city governments is

increasingly important for cities’ own citizenry, as well. For

citizens to hold government accountable for outcomes, it is

first necessary to establish reliable measures of performance.

With the establishment of urban performance indicators,

local and national governments can monitor urban trends.

This burden falls with special weight on the Department of

Housing and Urban Development (HUD), the agency

responsible for urban and housing policy in the United States.

To respond to calls for leadership from international organizations and partner countries, and to help the department better

anticipate and meet the needs of people in America’s urban

communities,under the leadership of HUD Secretary Andrew

Cuomo, HUD has established an Office of International

Affairs within its Office of Policy Development and Research.

Through its international work, HUD studies best practices

abroad, adapting those practices to domestic policy formulation, and helps foreign governments and non-governmental

organizations adapt successful American development models

to their own needs. Through this inaugural issue of Global

Outlook and future issues,we will be passing on the lessons we

are learning through international exchange.

In order to gauge the success of cities in increasingly

decentralized countries, moreover, and to set realistic development targets, we have a role to play in developing the

benchmarks which citizens can use to hold their governments accountable for improving community outcomes. In

subsequent issues of Global Outlook, HUD will publish a

series of housing and urban indicators, such as the incidence

of poverty, housing affordability, transportation services and

environmental quality.

The global urban challenges before us span issues of

rapid growth, affordable housing, environmental concerns,

and employment opportunity. In all of these, good governance and community planning are vital. In much of the

developing world, urbanization has magnified challenges

traditionally faced by congested cities. Governments everywhere are pressed to keep up with increased demand for

infrastructure and services, for example, maintaining potable

water supplies. According to a recent study by the U.S.

National Intelligence Council more than 3 billion people—

almost half the world’s population—will live in “waterstressed” regions in 2015.

Rapid urbanization also will keep the adequate supply of

affordable housing at the top of municipal and national agendas for decades to come.The experience of the United States

and other nations has demonstrated that a key to meeting the

challenges of rapid urbanization is expanding opportunities

for affordable homeownership. Homeownership empowers

citizens to solve the problems of their community by giving

them a financial stake in improving and maintaining their

environment, and by giving them access to capital through

real estate markets and supporting housing finance systems.

Recognizing three major international needs–increasing

homeownership, promoting community-based planning,

and providing accurate performance data to monitor outcomes—HUD has structured and staffed its Office of

International Affairs Office based on a matrix of three

spheres of policy concern: housing finance, community

development, and the use of information technology for

data-sharing. HUD’s international program also has a country specific focus, currently, in five geographic areas—

Central America and the Caribbean, Mexico, China, South

Africa, and Israel—where there is both great need and much

to be contributed from our partner countries. In each of

these countries, information is exchanged through academINTERNATIONAL URBAN RESEARCH MONITOR

5

HUD’s New Global Initiative in Policy Development and

Research: The Office of International Affairs

SUSAN M. WACHTER

US Department of Housing and Urban Development

Laid-off factory workers in eastern Beijing, China, have built shelters next

to their own homes, for renting to migrant workers.
ic research and also through the practical, hands-on knowledge gained from HUD’s collaboration with national governments as well as local communities.

HOUSING FINANCE

HUD is working with officials in the Dominican Republic,

Israel, and China, on housing finance pilot projects that tailor U.S. models to each nation’s challenges. For example, in

China, which is in the midst of the world’s largest housing

reform effort, HUD is working with the ministries of

Construction and Finance to design a pilot project which

will result in the issuance of mortgage-backed securities.This

research project will assist in China’s efforts to build primary

and secondary mortgage markets enabling hundreds of millions of low-income urban renters to become homeowners.

URBAN AND COMMUNITY DEVELOPMENT

Community development and community empowerment

are key to the U.S. approach to addressing housing and

urban development needs. An important component of

HUD’s international program is sharing HUD’s successful

programs in community development. In Central America,

for example, where countries are recovering from the devastation of Hurricanes Mitch and Georges, HUD’s Office of

International Affairs has committed time and resources to

improving municipal planning through effective disaster

management, improved data utilization, and the development of integrated community development plans. HUD is

involved in community development initiatives in countries

throughout Central America, the Caribbean, in Mexico and

in South Africa.

USING INFORMATION TECHNOLOGY FOR

DATA-SHARING

To promote the use of the new information technologies in

community planning, HUD is establishing a relationship

with the University Consortium for Geographic

Information Science. This project will pair American universities with universities in developing countries to create an international network for urban policy

research based on GIS-linked indicators. The consortium will establish an extensive database with a

wide variety of key variables and

indicators, similar to HUD’s State

of the Cities project for US urban

areas. By late 2001, urban indicator

data-sets and GIS training materials from this project will be available on the internet, as well as preliminary outcomes from the developing countries. The goal of this

new database is to enable governments throughout the world to

better address urban problems.

HUD’s UCGIS work will reinforce existing work being undertaken by the United Nations

Center on Human Settlement

(UNCHS). The Global Urban

Indicators project is an ongoing

effort by the UNCHS to create

GLOBAL OUTLOOK

6

Hurricane Mitch devastated communities throughout Honduras, leaving almost two million 

adults and children homeless.

New housing construction in Chiapas, Mexico

The experience of the United States and

other nations has demonstrated that a

key to meeting the challenges of rapid

urbanization is expanding opportunities

for affordable homeownership.
standardized international data on urban areas.As part of this

agenda, the UN General Assembly will evaluate progress on

the “Habitat Agenda” from the Global Conference on

Cities, or Habitat II, which was held in Istanbul in 1996.

HUD’s Office of International Affairs will take the lead in

preparing for the follow-up conference, Istanbul +5, which

is being held in June 2001.

HUD’s Office of International Affairs office is collaborating with the Woodrow Wilson International Center to make

this international urban indicator data available through the

Global Outlook.These data and, more generally, the analyses

they will allow, will improve understanding of urban and

housing issues and will inform scholars and practitioners

about urban development trends throughout the world.•

Dr. Susan M. Wachter is Assistant Secretary of Policy

Development and Research at the US Department of

Housing and Urban Development in Washington, DC. She

is on leave as a Professor of Real Estate and Finance at The

Wharton School of the University of Pennsylvania.

INTERNATIONAL URBAN RESEARCH MONITOR

7

The US Department of Housing and Urban

Development’s Office of Policy Development and

Research recently granted $240,000 to the University

Consortium for Geographic Information Science (UCGIS)

for a major project on “Global Urban Quality: An Analysis

of Urban Indicators Using Geographic Information

Science (GIS). The UCGIS is a non-profit organization of

universities and other research institutions dedicated to

advancing international understanding of geographic

processes and spatial relationships through improved

theory, methods, technology and data. UCGIS members

include leading colleges and universities, research organizations, professional societies, and private affiliates that

are devoted to fostering multidisciplinary geoscience

research and education and promoting the use of geographic information science and geographic analysis.

UCGIS and HUD will be conducting two symposia to foster cooperative efforts between consortium members and

other interested agencies and institutions. The first symposium will be held in Washington DC on February 2-3, 2001.

This symposium will: 1) demonstrate the capacity of UCGIS

member universities to analyze global urban quality; and, 2)

investigate the availability of data in developing countries to

be studied utilizing the various analytical models. The symposium will consist of invited presentations from UCGIS

member universities describing work currently being done

on urban indicators and on related geographic information

science activities within developing countries. Additional

participants are welcome at the symposia. 

As part of the overall HUD-funded project, five UCGIS

member universities will be paired with institutions in

emerging nations to carry out internet-based training and

analyses using urban indicators. These five international

research teams will develop and disseminate new stateof-the-art GIS and urban indicators databases that can be

used over the internet by local government policymakers,

researchers, and national and global agencies involved

with urban issues. By providing internet access to the

maps and data, detailed information about cities, communities, and metropolitan regions will become much

more widely available. 

The long-term goals of this research project for HUD

and UCGIS are to:

• Gain knowledge, for cities in developing countries

around the world, of indicators that can be used to

monitor change and assist in creating and evaluating

policies and programs designed to improve the quality of urban life. 

• Establish a quantitative baseline of data that can be

used in the future to evaluate the effectiveness of new

policies and programs designed to generate prosperity for communities facing economic difficulties, to

expand affordable homeownership opportunities, and

to reduce poverty and homelessness.

• Increase expertise in evaluating urban indicators using

spatial analytical techniques and geographic information systems, and help transfer such enhanced knowledge from UCGIS universities to participating organizations within the emerging nations. This vital information exchange will primarily be through web-based

training programs. 

• Build a local capacity within developing countries for

collecting and utilizing policy-related urban indicators.

• Establish relationships between the UCGIS member

universities and their collaborators from emerging

nations in order to increase the capacity within developing countries to continue urban indicator analysis

on a long-term basis.

The five above-stated goals will require ongoing, longterm research and action. A second UCGIS/HUD symposium will be held August 10-11, 2001 to evaluate the success of this research program on global urban indicators.

Invited participants will evaluate the effectiveness of

training activities, provide recommendations for extending the program over the long-term, and identify

resources and funding to expand the project during the

second and third years. For more information contact

UCGIS Executive Director Susan McDonald Jampoler by

phone at (703) 779-7980, by fax at (703) 771-1635, or by

email at execdir@ucgis.org.

New HUD-funded Research Project on Global Geographic Indicators of

Urban Quality of Life

SUSAN MCDONALD JAMPOLER

University Consortium for Geographic Information Science (UCGIS)
GLOBAL OUTLOOK

8

POINT ONE

America’s future prosperity depends on the productivity

and competitiveness of its metropolitan regions, the key

centers of innovation and business activity, where over

90 percent of the nation’s job growth is currently taking

place, and where nearly 90 percent of the nation’s Gross

Domestic Product is now being generated.

The nature and volume of investment, production,

and trade in and through America’s metropolitan

regions is one of the basic structural building blocks of

our country’s macroeconomic growth and global competitiveness, and thus is at least as important as fiscal and

monetary policy, international trade, education, and

other economic issues regularly considered and debated by the executive, legislative, and judicial branches of

the federal government, including the Board of

Governors of the Federal Reserve System.

Metropolitan Economic Strategy is vital for

national economic policy in the new global

marketplace, both in the USA and in countries

throughout the world.

POINT TWO

Communities, both cities and suburbs, can only thrive as part

of a larger metropolitan economic dynamic, with the entire

region becoming a center of advanced innovation and technological excellence in the production and distribution of various goods and services.

The competitive advantage of a metropolitan region

comes from successfully mixing highly skilled and highvalue specialization together with economic and social

diversity, and by strategically investing in, improving, and

sustainably utilizing the region’s fundamental assets—its

physical, financial, and human capital.

Metropolitan Economic Strategy is vital for urban

policy.

POINT THREE

By emphasizing the interwoven economic destinies that

bridge across families and communities within metropolitan

regions, people begin to see themselves as “citizens of a metropolitan economy”—players on the economic “home team”

competing with other metropolitan economic teams all over

the world.

The real “city” of today and tomorrow is the metropolis.

Metropolitan regions are the most economically organic

components of urban geography and demography affecting

people’s daily lives at the local level, and the main access

points for individuals trying to thrive in the global economy.Yet the greatest barrier to regional coordination, cooperation, and collaboration is the lack of a common metropolitan consciousness and citizenship.Therefore, promoting

“teamwork” is essential for individual and collective success,

by encouraging households and families to begin reaching

beyond local political boundaries in pursuit of their common interests and goals of increasing prosperity and enhancing quality of life.

Metropolitan Economic Strategy is vital for

regional identity.

POINT FOUR

Metropolitan Economic Strategy is not the same as regional

economic growth.

Every metropolitan region experiences economic

growth or decline, regardless of whether or not there are

comprehensive plans or coordinated initiatives.

Metropolitan regions function as fully integrated economies

in terms of the production and distribution of goods and

services, and they will function as such with or without a

coherent economic strategy. A critical determinant of their

success is the decision-making process of private sector

executives, investors, entrepreneurs, and consultants making

facility location commitments in the global marketplace,

especially regarding the synergy and attractiveness of metropolitan regions as centers of innovation that can provide

businesses with a competitive advantage.

Unfortunately, regional economic growth often occurs

in an uncoordinated and haphazard fashion, and conseMetropolitan Economic Strategy: How Urban Regions

Innovate and Prosper in the Global Marketplace

MARC A. WEISS

Woodrow Wilson International Center for Scholars

Beijing, China
quently may be missing opportunities to produce greater

investment, higher incomes, and more equitable distribution

of the benefits of prosperity among people and places. Most

regions do not have any viable mechanisms for promoting

metropolitan economic development, in terms of either

developing a common vision, formulating a collective strategy, or jointly cooperating to implement such plans. Most of

the contemporary debate centers on the impacts of regional economic growth, including whether growth is too fast or

too slow, the problem of disparities and inequities, along

with harmful effects on the environment.This discourse is

primarily about analyzing trends and reforming policies.

Metropolitan Economic Strategy, on the other

hand, is a proactive organizing principle that

depends on regional teamwork and citizenship. It is

explicitly designed to bring together the public and private

sectors across the entire region to formulate and carry out a

coordinated set of targeted investments in people and places,

consciously designed to enable businesses to thrive, jobs to

expand, and quality of life to improve. Each of the major

constituencies—business, government, and community

leadership, must closely collaborate for the metropolis to

thrive economically, socially, physically, and politically. In just

the same way that communities, cities, counties, and states

use economic development plans to guide their actions, so

also must the communities that constitute the metropolitan

region farsightedly engage in such comprehensive planning

and united action if they are to compete effectively and win

in the global economy.

POINT FIVE

Formulating and implementing an effective Metropolitan

Economic Strategy requires focusing on two key elements:

1) Investing in the fundamental assets and activities

that will help fuel productivity and innovation.

Among these are:

• transportation and infrastructure

• education and workforce development

• research and technology

• venture capital and other forms of business financing

• services and amenities

• economic development incentives

• trade promotion and market expansion

• business and employment attraction and retention

• entrepreneurial culture and business-friendly institutions

• regional coordination and civic leadership

• taxation and regulatory policy

• environmental preservation and restoration

• community and family development

• quality of life

2) Promoting modern and dynamic industry networks that accelerate the pace of innovation and

growth.These broad-based groups of interconnected firms

and organizations, also called clusters, are best able to fully

capitalize on the mix of specialization and diversity in the

region’s firms and assets, and to foster a climate of technological innovation in design and production of goods and

services that can compete globally and generate substantial

growth in jobs and incomes.

POINT SIX

Metropolitan Economic Strategy must be home-grown and

tailor-made in order to succeed.

The fundamental assets and the key dynamic industry

networks will vary from region to region. Polymer science

and engineering is a winner for Akron and northeast Ohio,

but not necessarily for Austin,Texas, where computer hardware and software are the leading edge, or Atlanta, Georgia,

where telecommunications and transportation are the

fastest-growing economic engines.

At the US Department of Housing and Urban

Development in 1996, we identified 18 key industry networks nationwide that in different combinations play major

roles as export-based economic generators in 114 metropolitan regions across the country, with wide variations from

one region to the next:

• Business and Professional Services

• Health Services

INTERNATIONAL URBAN RESEARCH MONITOR

9

Cesky Krumlov, Czech Republic
• Entertainment and Tourism

• Financial Services

• Housing and Construction 

• Medical Products

•Transportation and Trade Services

• Industrial Supplies

• Printing and Publishing

• Electronics and Communications

•Transportation Equipment

• Materials Supplies

• Aerospace and Defense

• Agriculture and Food Processing

• Natural Resources

• Industrial Machinery

•Consumer Goods

• Apparel and Textiles

In the 1998 Strategic Economic Development Plan for

Washington, DC, we identified six key industry networks

for the city and the metropolitan region:

• Business/Professional/Financial/Association Services

• Hospitality/Entertainment/Tourism/Specialty Retail

• Universities/Educational/Research Institutions

• Biomedical Research/Health Services

• Media/Publications

• Information Technology/Telecommunications

In the 1999 Baltimore Economic Growth Strategy, we

identified four key industry networks for the city and the

metropolitan region:

• Business, Professional, Financial, Non-Profit, and

Information Services and Products

• Biomedical Research, Medical Products, and Health Services

• Hospitality, Entertainment,Tourism, and Specialty Retail

•Transportation and Trade Services and Equipment

One size definitely does not fit all.

Each metropolitan region must find the

right mix and most important assets

that work best for generating innovation and prosperity.

POINT SEVEN

Comprehensive and effective Metropolitan

Economic Strategy necessarily involves central

cities, by maximizing the urban contribution

to regional prosperity, and by spreading the

benefits of metropolitan wealth creation to

increase incomes and quality of life for the

people who live and work in and near cities.

Industry networks operate across regions

and always include significant business operations located in cities.The smooth functioning of metropolitan economies, with their

highly interrelated business activities involving thousands of private firms and public sector organizations, requires healthy central cities to serve as focal points

for regional identity in the global marketplace, and to

engage in many key aspects of the production and distribution of goods and services. Cities remain a major source of

creativity and innovation, and they will continue to play a

vital role in ensuring that regional businesses and job opportunities can compete in international markets.

The six key roles for central cities in the metropolitan economy are:

• centers of innovation and advanced services

• centers of culture, sports, entertainment, conventions, and

tourism

• centers of education, research, and health care

• centers of transportation and trade

• market centers

• workforce centers

POINT EIGHT

Metropolitan Economic Strategy is the best way for cities and

their residents to prosper in the new global marketplace.

In today’s global economic context, cities simply cannot survive in isolation from their regional surroundings. Urban

economies increasingly extend far beyond the traditional city

boundaries. Central cities, even the largest and fastest-growing ones, are physically constrained by artificial boundaries

GLOBAL OUTLOOK

10

The best way for cities and older 

inner-ring suburbs to succeed is by

working collaboratively with their

regional neighbors, organizing 

coordinated public-private partnerships

to develop and carry out a Metropolitan

Economic Strategy

Cape Town, South Africa
that divide them from the rest of their natural economic

growth area, and they can only revive or continue to thrive

by directly linking their future direction to the overall prosperity and competitiveness of the surrounding metropolis.

The best way for cities and older inner-ring suburbs to succeed is by working collaboratively with their regional neighbors, organizing coordinated public-private partnerships to

develop and carry out a Metropolitan Economic Strategy

that includes three major elements:

1) Build on the city’s strengths in the context of metropolitan economic growth.

Growing the city’s key industry networks also inherently

involves strengthening the region’s economic vitality. Cities

both currently possess and can create major assets to increase

their competitiveness. By doing so they expand the overall

metropolitan economic pie, even as they work to capture a

larger share of that pie for city-oriented business activities

that utilize to best advantage the existing transportation and

communications infrastructure, accessibility of the central

location, the urban-oriented lifestyle attractions, the diversity and depth of experts and specialists, and the quality of

major knowledge-based institutions.

2) Reinvest and repopulate downtown and neighborhoods.

This must be based on marketing the city’s potential appeal

to businesses and residents from throughout the region and

around the world, with coordinated public and private

investments, and concentrated efforts to create or bring back

commerce and jobs, high quality stores and services, safe

streets and good schools, better housing and attractive

amenities.

3) Connect urban residents to regional jobs.

Such initiatives necessarily include targeted training, placement, transportation, child care, and other incentives and

services that eliminate barriers to the smooth functioning of

the metropolitan job market and help fill suburban job

shortages by expanding employment opportunities for the

low-skilled, low-income population living in and near central cities.

POINT NINE

Preserving and enhancing a good physical environment and

quality of life is essential to the long-term success of a

Metropolitan Economic Strategy.

No region can compete globally and sustain itself as a

center of innovation without attracting and retaining talented people.These highly skilled professionals are increasingly

lifestyle-oriented and will only live and work in places that

offer a very high quality of life. Today’s environmentalism

and related movements for smart growth, sustainable development, and new urbanism are more than just compatible

with economic growth. Environmental protection and

restoration are fundamentally necessary for generating prosperity in the new global economy. Preserving and enhancing the physical and natural environment of cities and metropolitan regions includes cleaning up and redeveloping

brownfield sites; renovating historic structures; improving

clean air and water; maintaining the beauty of natural landscapes, the accessibility of pathways and open space, and the

availability of agricultural land; curbing sprawl and traffic

congestion, reinvesting in older urban and suburban centers;

expanding transit and other pedestrian and transportation

alternatives; and generally strengthening community planning and design of cities and suburbs.

POINT TEN

Finding the right mechanisms for governance is critical to the

success of Metropolitan Economic Strategy.

Each region must make its own way, navigating the complicated challenges of bridging across many levels of separate

jurisdictions and governing units, including communities,

cities, counties, special districts, public authorities, states, and

even nations. This challenge is made even more complex

because the role of the private sector is absolutely critical.

Forming the right kind of partnerships, establishing the

INTERNATIONAL URBAN RESEARCH MONITOR

11

Budapest, Hungary
right type of leadership, creating the right form of cooperative governance structures—these and many other issues

must be resolved for Metropolitan Economic Strategy to

make a visible and long-term difference. There is not one

best solution, and again, one answer certainly does not cover

every situation.•

Dr. Marc A.Weiss is a Public Policy Scholar at the Woodrow

Wilson International Center for Scholars in Washington,DC.

He is author of The Rise of the Community Builders,

and The Economic Resurgence of Washington, DC,

and coauthor of Charter of the New Urbanism, and Real

Estate Development Principles and Process.

GLOBAL OUTLOOK

12

More than 100 senior practitioners and distinguished

experts from across the nation gathered at the Woodrow

Wilson International Center on September 20th through

September 23rd. They focused on creating new policies

and partnerships that enable America’s metropolitan

regions to implement coordinated public and private

investment strategies designed to enhance technological

innovation, productivity, and competitiveness.

“The conference—Metropolitan Economic Strategy:

How Communities, Cities, Counties, and Regions Innovate

and Prosper in the New Global Marketplace—facilitated indepth discussion among national policymakers to generate fresh and creative approaches for expanding prosperity and improving quality of life in metropolitan regions,”

said Marc Weiss, Public Policy Scholar at the Wilson

Center and conference coordinator.

The main conference themes are drawn from a book

entitled Teamwork, that Marc Weiss is co-authoring with

Henry Cisneros, former Secretary, US Department of

Housing and Urban Development. “Our book,” stated

Henry Cisneros, “is exploring and promoting the best ways

that public, private, civic, and community leaders can work

together to ensure that cities and suburbs will thrive in the

fast-changing international economy of the 21st century.”

Featured speakers included Philip Angelides, Treasurer,

State of California; Earl Blumenauer, Member, US

Congress, from the City of Portland (Oregon), and CoChairman, Livable Communities Task Force; Henry

Cisneros, Chairman, American CityVista, former Secretary,

US Department of Housing and Urban Development, and

former Mayor, City of San Antonio (Texas); Brent Coles,

Mayor, City of Boise (Idaho), and President, US Conference

of Mayors; Lee Cooke, Chairman, Habitek International,

and former Mayor, City of Austin (Texas); Richard Erickson,

President, Regional Business Council of Northeast Ohio,

and former President, Akron Regional Development

Board; Parris Glendening, Governor, State of Maryland,

and President, National Governors’ Association; Stephen

Goldsmith, Domestic Policy Adviser, Bush-Cheney 2000,

and former Mayor, City of Indianapolis (Indiana); Javier

Gonzales, Commissioner, Santa Fe County (New Mexico),

and President-elect, National Association of Counties; Lee

Hamilton, Director, Woodrow Wilson International Center;

Kevin Hanna, President, Atlanta Development Authority;

Alice Rivlin, Chairman, District of Columbia Control Board,

and former Director, White House Office of Management

and Budget; Gene Sperling, Director, White House

National Economic Council; Susan Wachter, Assistant

Secretary, US Department of Housing and Urban

Development; Marc Weiss, Public Policy Scholar,

Woodrow Wilson International Center; and Anthony

Williams, Mayor, City of Washington, DC.

The conference participants spent many hours each day

in breakout discussion groups developing recommendations for new policies, programs, and research efforts. The

results of this conference will be summarized in a 32-page

conference report to be published and widely disseminated by the Wilson Center. The Metropolitan Economic

Strategy conference received financial support from the US

Federal Conference Fund, and the Fannie Mae Foundation.

“We had a full agenda and tackled some very tough

issues, such as workforce development, smart growth, and

urban reinvestment,” said Marc Weiss. “It is so important

that we focused on this fundamental challenge, because

America’s and the world’s future prosperity—the success and

vitality of our nation’s families and communities—depends

on creating a state-of-the-art metropolitan policy agenda.”

The Wilson Center will be holding a follow-up international conference—Metropolitan Quality of Life: How

Communities, Cities, Counties, Regions, and States

Sustain and Improve Transportation and Infrastructure,

Housing and Services, Land-Use and Environment, and

Urban Amenities—to be held on September 12-15, 2001 in

Washington, DC. This conference is also being coordinated by Marc Weiss.

For additional information on the conference and to

receive copies of the conference overview materials and

summary report, please contact Marc Weiss by phone at

(202) 691-4229, by fax at (202) 691-4001, or by email at

weissma@wwic.si.edu. •

Kent H. Hughes is a Public Policy Scholar at the Woodrow

Wilson International Center for Scholars in Washington,

DC. He is currently writing a book on America’s global

economic competitiveness.

Recent Wilson Center National Conference on Metropolitan Economic

Strategy, and Upcoming International Conference on Metropolitan

Quality of Life

KENT H. HUGHES

Woodrow Wilson International Center for Scholars
At first glance, the Caribbean appears to be a collection of poor island nations, many of which rank

near the bottom of the list of nations by every statistical measure of economic capacity, including population,

national and per capita income, rates of investment, and

industrial growth. In addition, these nations face the immediate challenge of responding to the demise of the Lomé

Convention, a trade agreement between the European

Union and their former colonies which provided protected

markets for their banana exports. A third of the Caribbean

economy is tied to international banana exports, but these

islands are not economically efficient producers of bananas

in global terms, so they will not be able to hold on to their

market share without the special trade protections provided

by the Lomé Convention. It is tempting and justifiable to

decry the WTO interventions that led to the demise of these

protections, but it is also arguable that any effort to continue them will delay the type of economic diversification in

the Caribbean that is necessary for its independent survival

in the face of global competition. I would like to suggest

instead, that visionary and effective interventions are necessary to create an entirely new and better future for the

Caribbean economy and to enable it to diversify, grow from

within, and establish itself as a competitive player in the

global economy.

The interests of the United States are inextricably tied to

the Caribbean. On the one hand, more than $35 billion in

goods and services flow annually between the US and the

Caribbean islands, so that growth of the Caribbean economy will expand American business and employment opportunities. On the other hand, with over one-third of the

Carribean workforce employed in banana production, failure to initiate positive economic alternatives

to the declining banana trade will generate an

economic disaster of such proportions that

crime rates could skyrocket, massive numbers

of new immigrants may flood Florida’s east

coast, and the doors to the Carribean corridor for drug smugglers could be thrown wide

open.

During the past several decades the United

States has made a number of efforts to

strengthen the Caribbean economy. The

Caribbean Basin Economic Recovery Act,

enacted in 1983, instituted the Caribbean

Basin Initiative (CBI). Until the North

American Free Trade Agreement (NAFTA)

was ratified in 1994, most Caribbean nations

enjoyed significant US trade preferences

through their participation in the CBI. After

the implementation of NAFTA, the earlier

trade advantages of CBI for these Carribean

countries were severely eroded.The phased implementation

of NAFTA is further deepening the trade disadvantage of

CBI countries, and without adjustments, the trade gap will

continue to widen until January of 2008 when NAFTA will

be fully implemented.

The Caribbean Basin Trade Partnership Act (CBTPA),

passed recently by the Congress and signed by President

Clinton in May of 2000, provides for the trade adjustments

necessary to accomplish so-called “NAFTA parity” for the

Caribbean. This legislation provides eligible Caribbean

island nations trade status equivalent to the NAFTA signatories (US, Mexico, and Canada).The CBTPA is a temporary arrangement that anticipates the negotiation of free

trade agreements between the individual Caribbean nations

and the United States by 2005. In any case, its provisions

expire in 2008.

It is important to realize that all of these measures follow

the format, and operate within the context established by the

US generalized system of preferences with its commodity

specific tariffs and quotas.Thus they are driven by the strategic imperatives of the US economy, not by the development

needs of the Caribbean islands.In addition,these trade agreements are tied to traditional elements of the old Caribbean

economic production system, and therefore help perpetuate

neocolonial dependency. It is doubtful that such trade policies alone can serve as tools for diversified business development and substantial economic transformation .The question

becomes what policies can be followed and what actions can

be taken that will enable the Caribbean nations to diversify

and transform their economies in a manner that will allow

them to function effectively and independently, so that they

can grow, compete, and prosper in the global economy.

INTERNATIONAL URBAN RESEARCH MONITOR

13

An Economic Vision for the Caribbean 

CONGRESSMAN CHAKA FATTAH

US House of Representatives

Puerto Rico
Viewed as a whole, the island nations constituting the

Caribbean Basin already have all of the infrastructure necessary to support a dynamic, modern economy—airports, seaports, electrical generation capacity, fresh water distribution

systems, paved road networks, and telecommunications transmission systems.With a total population of 26 million, and a

combined Gross Domestic Product of $35 billion, if the

Caribbean islands were all one country, they would currently

rank 40th from the top among 226 nations worldwide.The

Caribbean Basin has a generally well-educated and industrious workforce, supported by literally dozens of colleges and

universities. Among the various islands there is now a global

economic presence in a variety of industries, including textiles, metal manufacturing, chemicals, agriculture, food processing,and tourism,and a financial infrastructure with at least

one major international bank in every Caribbean nation.

Finally,there are a number of cities and highly urbanized areas

that can serve as centers of innovation and advanced services

for the entire Caribbean Basin.Although it is most desirable

to view these vital economic assets in Caribbean-wide terms,

they are in fact under the control of the many individual

countries, most of whose populations and markets are too

small to make very efficient use of them. Currently, individual Caribbean nations are competing in the global marketplace alone, and doing so through trade channels and business

relationships that were institutionalized long ago during their

colonial periods. How much more powerful would each

Caribbean country be if it functioned through these same

channels, and many others that they might establish, as part of

a unified region with an integrated vision, consolidated

resources, and coordinated investment and export strategies? 

Importantly, there are a number of long-standing institutions that have as their goal the enhancement of economic

cooperation among these island nations. One such institution

is the Organization of Eastern Caribbean States (OECS).The

OECS has established a strong central bank, The Eastern

Caribbean Central Bank, providing for a common currency,

the Eastern Caribbean dollar. This currency is used by

Antigua & Barbuda, Dominica, Grenada, St. Kitts and Nevis,

St. Lucia, St.Vincent & Grenadines,Anguilla, and Montserrat.

According to Newsweek, these Caribbean nations together in

1999 offered the second most successful fixed-rate currency

in the Northern Hemisphere. The Caribbean Community

and Common Market (CARICOM) is another important

multinational treaty organization with its own region-wide

elected parliament. CARICOM’s goal is to evolve into an

EEC-type international entity with a common currency,

freedom of movement among sovereign states,and unrestricted free trade. However, at the present time CARICOM

involvement is voluntary among the various countries, and

thus its decisions do not carry the force of law.An additional

regional entity is the Association of Caribbean States, a panCaribbean organization which serves primarily as a regional

communications and identity vehicle.

With such significant interest in regional cooperation,and

favorable region-wide assets that can stimulate and support

economic development, why has progress toward diversification and strengthening of the Caribbean economy been so

slow? Some would argue that the fractured nature of

Caribbean’s island geography is a problem. But there are

industries,notably tourism,telecommunications,information

processing, and financial services, for which this geography is

not a liability, and in some instances is considered a major

asset. Others argue that the cultural diversity of the region

created by its fragmented colonial heritage is a serious problem. But the diversity of the United States is a defining element of our national character, and that diversity does not

seem to have stifled our economic growth. Still others suggest that insufficient investment capital limits the growth

potential of the Caribbean. The truth is that the potential

investment capital currently available in global markets is

more than enough for developing the Caribbean economy,

and abundant capital will flow to any location or investment

opportunity that it expects to generate an adequate return.

Therefore, the task facing those who would promote economic growth in the Caribbean is to create the global perception that investment in the Caribbean islands will generate highly competitive returns without undue risk.

I do not mean to suggest that the geography, the cultural heritage, or even the infrastructure of the Caribbean do

not present substantial challenges. However, it is clearly possible to design and implement a successful Caribbean economic development strategy based on existing assets, and

taking fully into account these special challenges. What is

presently hampering Caribbean economic growth is that

the individual countries cannot escape the grip of former

colonial trade connections, external sources of private

finance, and dependent relationships with international

financial organizations that together diminish their freedom

of movement to build critical mass and internal momentum.

They still remain trapped within the gravitational pull of

these traditional subordinate relationships. Although leaders

in each country are aware of the possibilities for Caribbeanwide economic cooperation, and some may even wish to

participate in regional initiatives, the status quo of dependent international relationships still represents basic economic survival, and these isolated island nations simply do not

have the financial resources individually to build the new

capacity needed to escape the stranglehold of the past and

create a more dynamic and self-sufficient future.

There are three steps the world community can take,

working in close cooperation with the Caribbean Basin

nations, that could catapult them beyond the threat of the

economic collapse they are currently facing and move them

rapidly into the brighter future that their many valuable

physical and human assets make possible.The first is to provide 100% international debt relief.To strip the Caribbean

of its trade protections and other rights and privileges of

colonial status, while leaving them saddled with the remnant

financial obligations thereof would be unconscionable and

unjust. Further, the institutional, human, and financial

resources that such a dramatic international action would

free up would help create the room and opportunity to

build a modern and dynamic Caribbean economy.

GLOBAL OUTLOOK

14
The second step is the construction of a public/private

partnership to mobilize and manage huge new infrastructure

investments.Today the Caribbean infrastructure is in relatively decent shape. But if our objective is to launch the

Caribbean region into the high-energy world of global competition, then the infrastructure must be upgraded to total

excellence: create greater electrical capacity, extend utility

coverage, improve transmission lines, repair and strengthen

roads, eliminate unpaved airport runways, dredge harbors to

improve shipping access, modernize port facilities, upgrade

water distribution and sewage treatment. Such an aggressive

investment program would both create many new jobs for

workers left unemployed by the collapse of the market for

Caribbean bananas, and at the same time create the platform

to generate high value-added economic growth.

The third major step is to organize a university-led economic development consortium. This consortium would

include the academic, corporate, civic, and political leadership of the Caribbean islands. It would invite the participation of interested American and other international universities and private sector executives and entrepreneurs, and it

would engage in a broadly based participatory strategic

planning process designed to create and promote a new,

popular, exciting, and realistic vision of the Caribbean’s

future.This process would address strategic industries, education and workforce training, research and technology

development, capital availability, business formation and

growth, community and environmental issues, and other

important assets from the perspective of the entire

Caribbean Basin, toward the goal of harnessing and focusing all available resources—public and private, local and

international—in pursuit of the widely shared vision that

emerges from the strategic planning process..

In the new global economy every nation is a “developing

country.”Technology has a way of leveling the playing field of

opportunity and reducing the gap in development potential

between high and low income nations.The accessibility and

rapid dissemination of information and innovation means that

through strategically guided leadership, economic success can

be created virtually anywhere. The shaping opportunity of

developing countries derives from the character of the new

economy: knowledge and information-based, technology and

communications-intensive, and globally oriented. The ubiquitous and globally penetrating worldwide web empowers

newcomers and start-ups, so niche players have a real chance

to create and control brand new product markets which can

grow and spawn entirely new industries. There are literally

thousands of products on the market today that did not exist

just one or two decades ago.These new products have created wealth sufficient to finance development of the entire

Caribbean, if not the entire so-called Third World.The term

of art that has evolved to describe the combination of circumstances likely to give rise to such outcomes is “the innovative milieu.” New places, by properly configuring their

assets, can become centers of innovation and invention, and

can both take advantage of and produce new technological

and organizational breakthroughs that will give them a competitive edge. My last proposal is designed to gather the leadership and creativity that can reinvent the Caribbean as a

magnet to attract talented people,and a greenhouse for growing economic innovation.

In conclusion, the Caribbean has an abundance of valuable

assets with which to compete successfully in the global marketplace, but the many small and independent island countries

must work together as an economically unified region in order

to utilize their combined assets effectively and to their best

advantage.The highly developed nations of the world, led by

the United States, can assist the Caribbean in establishing its

new international identity by releasing the financial constraints

imposed on these individual nations through 100 percent debt

relief. Investing in the full development of the Caribbean’s

many physical and human assets is in the best interests of the

global economy, and it will help overcome the looming hardship and deprivation that will follow the elimination of old

colonial trade protections. Development opportunities are not

so much a matter of rich and poor as they are of vision and

leadership. My hope is that the global community joins hands

with the Caribbean and rises to the occasion.•

Congressman Chaka Fattah is a Member of the US House of

Representatives in Washington, DC, representing the Second

Congressional District of Pennsylvania, which includes part

of the City of Philadelphia and some of its western suburbs.

He served as Co-Chairman of the Livable Communities Task

Force, and Co-Chairman of the Web-Based Education

Commission, in the 106th Congress.

INTERNATIONAL URBAN RESEARCH MONITOR

15

Dominican Republic
Affordable, community-based solutions exist to provide the urban poor with access to basic services.

Why then do 40 to 50 percent of city residents in

many developing country cities—including the vast majority of the urban poor—live in slums and squatter settlements

without access to clean water, sanitation, health care, roads,

and schools? 

Slums and squatter settlements are the result of failures

in governance and public policy in coping with rapid

urbanization. Given this terrible legacy of failed policies

and faced with the doubling of the urban population of

developing countries over the next 25 years, how can we

possibly hope to respond to this challenge? How can we

ensure that the next generation of urban poor will benefit

from the enormous opportunities for human development

that urban life offers?

First, we must take up the challenge of urban poverty

reduction as a global public policy issue. Strategies to

improve the urban poor’s access to city services must be

developed beyond the boundaries of sector strategies and

within the broader frameworks of both city development

strategies and national poverty reduction strategies.

Second, we must capitalize on the trends of decentralization and democratization by working more directly with local

authorities to help them respond to the issues facing the

urban poor. Many local authorities now have the responsibility and authority they need to take decisions at the local level.

Moreover, democratization has strengthened their accountability, and since the urban poor are voting in ever increasing

numbers, their demands for basic urban services are now frequently showing up as political priorities for local leaders.

Third, to achieve the above we need to invest in a collective effort to harness the power of existing networks of

local authorities, private sector institutions, and development agencies. Investing together in a focused effort to

broaden the benefits of local solutions through global learning will create a coherent effort necessary to dramatically

scale-up the impacts of urban development investments.

The Cities Alliance is building a coalition of cities and

their development partners to meet these challenges. It will

draw upon the vast experience of community-based urban

upgrading programs, while addressing the public policy, regulatory, and institutional issues that have in the past constrained replication and scaling-up. Its strategy is to address

inequities in the provision of

basic infrastructure and services within the framework of

broad-based city development strategies. This strategy

has been inspired by courageous mayors in cities of all

sizes and in all regions who

are demonstrating the political will to invest in this

opportunity.

The World Bank and the

United Nations Centre for

Human Settlements (Habitat)

together launched The Cities

Alliance in May of 1999, to

generate a new international

public-private partnership

committed to making

unprecedented improvements

in the living conditions of the

urban poor.The Alliance aims

to achieve this goal by mobilizing commitment and

resources for citywide and

nationwide upgrading programs which are conceived by

local stakeholders within the

GLOBAL OUTLOOK

16

The Cities Alliance: A New Global Challenge to 

Urban Poverty

MARK HILDEBRAND

The World Bank

Nicaragua
broader framework of strategic urban economic development.

Working together with cities and their national and international associations on new tools and knowledge sharing, public and private sector partners in the Alliance will marshal their

experience and knowledge to support both the formulation

and implementation of city development strategies.

The Cities Alliance Consultative Group will serve as a

global public policy forum to share the lessons learned and

agree on policy orientations and standards of practice in areas

related to the Alliances’ goals.The Cities Alliance will draw

upon the existing capacity of its partners for implementation.

The objective is to catalyze partners’ actions in ways that go

beyond their individual actions and to help create a new

coherence of effort in urban development cooperation.

Whether new urban residents over the next 20 years will

live as disenfranchised citizens in conditions of misery and

degradation, or in conditions of dignity and well-being, will

depend to a great extent on decisions that we collectively

make now. In a globalizing world, it is clearly in our selfinterest to join forces to meet this challenge.•

Mark Hildebrand is Manager of The Cities Alliance at The

World Bank in Washington, DC.

INTERNATIONAL URBAN RESEARCH MONITOR

17

WHAT IS THE CITIES ALLIANCE?

• A global coalition of cities and their development partners committed to pro-poor policies and prosperous

cities without slums.

• Launched in 1999 by the World Bank and the United

Nations Centre for Human Settlements (Habitat), with

two areas of focus:

— Linking the process by which local stakeholders

define their vision for their city, analyze its economic prospects, and establish a city development

strategy and priorities for action;

— Making unprecedented improvements in the living

conditions of the urban poor by supporting citywide participatory urban upgrading programs and

nationwide scales of action—with targets set in

Cities Without Slums initiative.

WHY FOCUS ON THE URBAN POOR?

• Over the next two decades 90% of population growth

in developing countries will be urban.

• Already close to 30% of the developing world’s urban

population lives below poverty lines.

• Pro-poor policies are needed to cope with this explosive growth of urban poverty and growing inequality

because they threaten the social cohesion and political

stability needed for social development and economic

growth.

• Demand is high—the urban poor are influencing

investment priorities since they are voting in increasing numbers, and decentralization has put pressure on

local governments to be more accountable.

IMPACT TARGETS

• Cities Without Slums action plan—improve lives of

100 million slum dwellers by 2020.

• Holistic city development strategies—define roles of

all stakeholders in implementation.

• Citywide and nationwide scales of action—focus on

scaling-up and sustainability.

• Build political will—demonstrate that slums are not

inevitable.

• Partnerships—expand the level of resources reaching

the urban poor by improving coherence and by more

directly linking grant funded technical cooperation to

investment follow-up.

BUY-IN TO-DATE

• Integral to World Bank’s urban sector strategy—Bank’s

initial investment $3million.

• Integral to United Nations global campaigns on secure

tenure and good urban governance—initial commitment by Habitat $1.5 million.

• The world’s major international associations of cities

sit on governing board as equal partners.

• Ten governments—including all of the G-7—have committed initial $15 million.

• President Nelson Mandela committed to serve actively as “patron” of Cities Without Slums initiative; action

plan strongly endorsed by Secretary-General of United

Nations and incorporated in United Nations

Millennium Declaration adopted by 150 Heads of State

in September 2000.

• Regional development banks, United Nations

Development Programme, United Nations Children’s

Fund (UNICEF), International Labor Organization,

European Union, and several other multilateral and

bilateral agencies are considering joining partnership.

FUNDING GAPS

• Gap of $19 million for the Cities Alliance 3-year business plan.

• Gap of additional $75 million for Cities Without Slums

first 5-year plan.

The Cities Alliance Fact Sheet
GLOBAL OUTLOOK

18

According to the United Nations Population

Division, the world passed the historical six billion

mark in October 1999. One of the most striking

features of world population growth is the rising predominance of the developing world. During the past 50 years,

nearly 90 per cent of all population growth at world level

occurred in the developing regions.Within less than 50 years,

by 2045-2050, all population growth is expected to be concentrated in the developing regions, since the developed

regions (which include Europe, Japan, Northern America,

and Australia/New Zealand) will most likely experience a

net reduction of their overall populations. Despite the

HIV/AIDS pandemic, Africa is expected to be the fastest

growing region, probably doubling in size over the next half

century—from 751 million to between 1.5 and 2.1 billion

persons by 2050. The population of Asia is expected to

increase from 3.6 billion persons at present to somewhere

within the range of 4.3 to 6.3 billion by 2050. Latin America

and the Caribbean is likely to increase from 505 million to

somewhere between 654 and 994 million by 2050.

The second striking feature is related to urban growth.

Although the growth of world urban population has been

slower than what was projected 20 years ago, its scale has

been unprecedented. Over the past 30 years, world urban

population more than doubled, increasing by 1.5 billion

inhabitants. In the next 30 years, virtually all of the world’s

population growth will be in urban areas. During that period the urban population is expected to increase by 2 billion

persons, the same number that will be added to the whole

population of the world. Most of this

growth will take place in the urban areas

of the developing world, whose growth

will likely increase from 1.9 billion in

2000 to 3.9 billion in 2030. The urban

areas of the developed regions are

expected to increase very slowly, from

900 million in 2000 to 1 billion in 2030.

As in the case of total population,

there will be a significant redistribution

of world urban population between the

developed and the developing regions.

Between 1950 and 1975, 32 million

new urban dwellers were added annually worldwide—about two-thirds in the

developing countries. During 1975-

2000, 52 million new urban dwellers

were added each year—87 percent in

developing countries. By 2000–2015, 65

million will be added annually—93 percent in developing countries.

Looking at the regional breakdown, Africa has the lowest level of urbanization and the fastest urban growth.

Currently, 38 percent of Africans are urban dwellers; by

2030, the percentage will be 55 percent.The problem facing

much of Africa is that very rapid rates of urban growth make

it exceedingly difficult to provide services. The urban

growth rate for Africa as a whole currently is around 4 percent. East Africa is growing at more than 5 percent per

annum, with individual countries growing at considerably

higher rates. Projections show that Africa’s urban growth

rate will stay around 3.5 percent through 2010 and above

three percent until 2015-2020.

Latin America and the Caribbean is the most urbanized

region in the developing world, with three quarters of its

inhabitants living in urban areas—roughly the same percentage as in the United States. Between 2000 and 2030,

213 million people will be added to the urban population of

this region, bringing the percentage of people living in

urban areas to 83 percent. Asia has a level of urbanization

very similar to that of Africa—currently 37 percent. Asia as

a whole, however, will have to absorb huge population

increments—a total of 1.3 billion new urban inhabitants by

2030. South Asia faces particularly daunting prospects, with

India having to absorb as many as 345 million new urban

inhabitants between 2000 and 2030,Pakistan 99 million,and

Bangladesh more than 50 million.

A central characteristic of current world urbanization

trends is that megacities—cities with populations of ten

million or more—are becoming larger and more numerThe Future of the World’s Megacities

ELLEN BRENNAN-GALVIN

The United Nations

Managua, Nicaragua
ous, accounting for an increasing proportion of urban

dwellers. Currently, there are 19 cities in the world with

over ten million inhabitants, 15 in developing countries. By

2015, there will be 23 cities with over ten million inhabitants—19 in developing countries (13 in Asia, four in Latin

America, two in Africa) (Table 1). These megacities, which

currently shelter 263 million inhabitants, are projected to

gain more than 100 million inhabitants by 2015, increasing

to 375 million inhabitants. Bombay is expected to become

the second largest megacity in 2015, followed by Lagos,

Dhaka and São Paulo.

The emergence of megacities is a modern phenomenon,

occurring over the last half century. In 1950, only New York

had a population of ten million or more. In addition to the

increase in their number, megacities are becoming considerably larger.The minimum population size for a city to make

the list of the world’s 15 largest urban agglomerations was

3.6 million in 1950. By 1990, a population of 9 million was

required as the threshold. By 2015, Buenos Aires, with 14.1

million, is expected to be 15th on the list.

Whereas the average annual rate of population growth

was one percent or less for megacities in the developed world

during 1970–1990, megacities in developing countries have

exhibited significantly higher rates of population growth, as

well as a larger range of rates, than those in developed countries. Some megacities are continuing to grow very rapidly.

Dhaka, for example, grew by 6.9 percent per annum during

1975-2000, while Lagos grew by 5.6 percent annually.

Contrary to the alarmist predictions, however, about

“exploding cities,” the growth of most of the world’s megacities has been slowing down,in some

instances quite dramatically. Mexico

City is a case in point.Whereas projections prepared by the United

Nations and the World Bank during

the 1970s forecasted a population for

Mexico City in the range of 27–30

million by the year 2000, Mexico

City’s population is currently 18.1

million—projected to reach 19.2

million in 2015. One explanation

for the decline in megacity growth

rates appears to be a deceleration in

rates of national population growth.

Indeed, a simple regression indicates

that the national population growth

rate explains nearly half (47 percent)

of the variation in megacity growth

rates in developing countries. Of

course, the fact that India’s three

megacities grew at rates of between

2 and nearly 4 percent per annum

during 1975–2000 indicates that

other forces must surely be involved.

Still, the relationship between

megacity and national population

growth rates is quite remarkable,

given that megacities generally comprise only a very small proportion of

their national populations.

It is difficult to generalize about

the factors behind the slowdown in

the growth of many of the world’s

megacities, as numerous complex

factors are involved. Again, Mexico

City provides an example. In addition to voluntary emigration after

the 1985 earthquake, factors making

Mexico City less attractive have

included rising housing prices, the

increasing cost of living, and quality

of life considerations. Indeed, one

INTERNATIONAL URBAN RESEARCH MONITOR

19

Table 1—Recent and Projected Growth of the World’s 

Megacities, 1975–2015

POPULATION (millions) GROWTH RATE (percentage)

Megacity 1975 2000 2015 1975–2000 2000–2015

1. Tokyo 19.8 26.4 26.4 1.2 0.0

2. Mexico City 11.2 18.1 19.2 1.9 0.4

3. Bombay 6.9 18.1 26.1 3.9 2.4

4. Sao Paulo 10.0 17.8 20.4 2.3 0.9

5. New York 15.9 16.6 17.4 0.2 0.3

6. Los Angeles 8.9 13.1 14.1 1.5 0.5

7. Shanghai 11.4 12.9 14.6 0.5 0.8

8. Lagos 3.3 13.4 23.2 5.6 3.7

9. Calcutta 7.9 12.9 17.3 2.0 1.9

10. Buenos Aires 9.1 12.6 14.1 1.3 0.7

11. Dhaka 2.2 12.3 21.1 6.9 3.6

12. Karachi 4.0 11.8 19.2 4.3 3.2

13. Delhi 4.4 11.7 16.8 3.9 2.4

14. Osaka 9.8 11.0 11.0 0.4 0.0

15. Beijing 8.5 10.8 12.3 0.9 0.9

16. Jakarta 4.8 11.0 17.3 3.3 3.0

17. Metro Manila 5.0 10.9 14.8 3.1 2.1

18. Rio de Janeiro 7.9 10.6 11.9 1.2 0.8

19. Cairo 6.1 10.6 13.8 2.2 1.7

Source: United Nations Population Division, World Urbanization Prospects: The 1999

Revision.
third of a sample of Mexico City residents interviewed in a

migration survey conducted in 1987 indicated that they

expected to move away from the city in the future; more

than 75 percent of the residents sampled referred to problems related to metropolitan life, such as delinquency, stress,

and air pollution. Of even greater importance is the fact that

more dynamic growth has occurred elsewhere. Indeed, the

rapid economic growth of Mexico’s border states—which

accounted for 62 percent of national job growth from 1985

to 1990—is a major explanation for Mexico City’s relative

decline.

REGIONAL OVERVIEW

There is a great diversity of experience among the world’s

megacities. Broad differences in patterns of megacity growth

persist among the major geographical regions. In Latin

America, the rate of population growth of most major cities

in the region peaked during the 1960s, when fertility levels

were still relatively high and governments in the region were

pursuing policies of import-substituting industrialization

that drew large numbers of migrants to the cities.

In recent years,a dramatic and unanticipated slowdown in

the growth of megacities in the Latin American region surGLOBAL OUTLOOK

20

Movement of People

Two major trends in the movement of people will characterize the next 15 years—urbanization and cross-border

migration—each of which poses both opportunities and

challenges.

Growth in Mega-Cities

The ratio of urban to rural dwellers is steadily increasing.

By 2015 more than half of the world’s population will be

urban. The number of people living in mega-cities—those

containing more than 10 million inhabitants—will double

to more than 400 million.

Urbanization will provide many countries the opportunity to tap the information revolution and other technological advances.

The explosive growth of cities in developing countries

will test the capacity of governments to stimulate the

investment required to generate jobs and to provide the

services, infrastructure, and social supports necessary to

sustain livable and stable environments.

Regional Population: 1950–2015

Divergent demographic trends, the globalization of labor

markets, and political instability and conflict will fuel a

dramatic increase in the global movement of people

through 2015. Legal and illegal migrants now account for

more than 15 percent of the population in more than 50

countries. These numbers will grow substantially and will

increase social and political tension and perhaps alter

national identities even as they contribute to demographic and economic dynamism.

States will face increasing difficulty in managing

migration pressures and flows, which will number several million people annually. Over the next 15 years,

migrants will seek to move:

• To North America primarily from Latin America and

East and South Asia

• To Europe primarily from North Africa and the Middle

East, South Asia, and the post-Communist states of

Eastern Europe and Eurasia.

• From the least to the most developed countries of

Asia, Latin America, the Middle East, and Sub-Saharan

Africa.

Regional Population by Age Group: 2000 and 2015

For high-income receiving countries, migration will

relieve labor shortages and otherwise ensure continuing

economic vitality. EU countries and Japan will need large

numbers of new workers because of aging populations

and low birthrates. Immigration will complicate political

and social integration: some political parties will continue

to mobilize popular sentiment against migrants, protesting the strain on social services and the difficulties in

assimilation. European countries and Japan will face difficult dilemmas in seeking to reconcile protection of

national borders and cultural identity with the need to

address growing demographic and labor market imbalances.

For low-income receiving countries, mass migration

resulting from civil conflict, natural disasters, or economic crises will strain local infrastructures, upset ethnic balances, and spark ethnic conflict. Illegal migration will

become a more contentious issue between and among

governments.

For low-income sending countries, mass migration

will relieve pressures from unemployed and underemployed workers and generate significant remittances.

Migrants will function as ethnic lobbies on behalf of sending-country interests, sometimes supporting armed conflicts in their home countries, as in the cases of the

Albanian, Kurdish, Tamil, Armenian, Eritrean, and

Ethiopian diasporas. At the same time, emigration

increasingly will deprive low-income sending countries of

their educated elites. An estimated 1.5 million skilled

expatriates from developing countries already are

employed in high-income countries. This brain drain from

low-income to high-income countries is likely to intensify

over the next 15 years.

Global Trends 2015: A Dialogue about the Future with 

Nongovernment Experts

The following text is an excerpt (pp. 16–17) from a publication with the same name, published December 18, 2000 by the

US National Intelligence Council and the US Central Intelligence Agency
prised even local observers.Whereas a process of intra-metropolitan employment dispersal has been taking place for a

number of years in such cities as Buenos Aires,São Paulo,and

Mexico City, the scale has increased greatly. Manufacturing

plants have been moving much greater distances and often

beyond metropolitan boundaries (within a 200km radius

from the central core of São Paulo, for example). In addition,

profound changes have taken place over the past decade in

Buenos Aires, Mexico City, Rio de Janeiro, São Paulo, and

other large Latin American cities as a result of economic

recession and structural adjustment programs.

Despite its relatively low level of urbanization (37 percent),

Asia accounts for nearly half (48 percent) of world urban population. Amounting to 1.4 billion persons, this number is 50

per cent higher than the current urban population of the

developed world.As noted, a majority of the world’s megacities are located in Asia. Many megacities in Asia have experienced dramatic economic growth in recent years. Seoul, with

a Gross Domestic Product (GDP) of $93 billion in 1990—the

12th highest in the world—is rapidly moving away from

“developing”country status.Until the Asian economic crisis in

1998, Bangkok and Jakarta had booming economies. In the

Southeast Asian countries as a whole, urbanization has been

penetrating deep into the countryside, resulting in extended

and dispersed mega-urban regions encompassing hinterlands

as far as 100 km from the central core.

In recent years, China’s megacities have been growing at

very rapid rates, although this growth is partly due to reclassification. Of course, the meaning of “urban” in China is

now far different from the generally accepted meaning of

that term.The use of official urban and migration statistics

to measure levels of and changes in urbanization can be seriously misleading. Moreover, the experience of China’s

megacities has been fairly unique. Urban migration over the

past several decades has been closely related to political

swings, economic changes, and related policy shifts.

The largest cities of the Indian subcontinent (e.g.

Bangalore, Bombay, Calcutta, Delhi, Hyderabad, and Madras

in India; Karachi and Lahore in Pakistan; and Dhaka in

Bangladesh) have followed a different pattern. Many megacities on the subcontinent have fairly stagnant economies, yet

they will have to absorb huge population increments over

the next several decades. Bombay, where at least half the

population does not have access to adequate shelter, is projected to have a population of more than 26 million in

2015. Karachi, a city experiencing continuing political

unrest, is projected to have a population of more than 19

million inhabitants. Dhaka, one of the poorest cities in the

world where the average annual income for slum dwellers

currently is around US $150, is projected to have a population of more than 21 million in 2015.

Fueled by continuing out-migration from impoverished

rural areas and by very high natural increase, despite years of

sustained recession, cities in Africa are growing very rapidly.

At nearly twice the world average, this growth puts incredible pressure on already strained economies.Whereas much

of the academic literature stresses the strong link between

economic development and urbanization, the relationship

INTERNATIONAL URBAN RESEARCH MONITOR

21

Johannesburg, South Africa
between the two is much weaker in Africa than elsewhere

in the developing world. Many countries in the region

experienced negative or very slow rates of Gross National

Product (GNP) growth in the last two decades.Yet almost all

countries in the region exhibited high urban growth rates,

including those with negative GNP growth. The two

megacities in sub-Saharan Africa, Lagos and Kinshasa, are

among the world’s poorest yet most rapidly growing megacities and are expected to continue to grow at a similar pace

over the next two decades.

PATTERNS OF INTRAMETROPOLITAN

POPULATION GROWTH

Just as there are widely divergent patterns of economic

development and urban growth among the major geographical regions, there are striking demographic differentials within megacities.Aggregate rates of population growth

for the megacities may be quite misleading. Megacities are

spatially very extensive, with sizes ranging from the traditional core city of 100–200 sq. km to regions of

2,000–10,000 sq. km and more.

Population growth in large cities usually does not

increase the population density of high-density areas, but

promotes densification of less developed areas and expansion

at the urban fringe. In particular, population densities in the

central core frequently decline as households are displaced

by the expansion of other activities. This finding is very

robust in both industrial and developing countries and has

been observed in cities as diverse as Bangkok, Bogotá,

Mexico City, Shanghai, and Tokyo. Whereas the traditional

urban cores of many megacities are experiencing very slow

or negative population growth, areas on the periphery typically are experiencing rapid growth. For example, the city

of São Paulo grew by one percent per annum during

1980–1991. The central core as well as the interior and

intermediate rings lost population (at rates of -1.3, -0.9 and

-0.4 percent per annum, respectively). The exterior ring

grew by only 0.4 percent per annum while the periphery

expanded by 3 percent.

In many megacities, periurban areas have grown or are

continuing to grow at staggering rates, making it impossible

to provide services. In São Paulo, for example, the growth of

the peripheral ring was nearly 13 percent per annum during

1960–1970, declining to 7.4 percent during 1970–1980 and

to 3.8 percent during 1980–1987. It is not uncommon for

peripheral areas of megacities to be growing by rates of

10–20 percent per annum. However, because of the rapidity of growth in these newly developing areas, sometimes as

a result of sudden land invasions, the magnitude of this

growth is unrecorded.

Such rapid population growth in periurban areas has

serious implications for infrastructure provision and land

markets.A major reason why local administrations in many

developing country cities have not coped successfully with

urban population growth is that they simply do not know

what is going on in their local land markets. Most megacities lack sufficient, accurate, and current data on patterns

of land conversion, infrastructure deployment, and land

subdivision patterns. Frequently, urban maps are 20 to 30

years old and lack any description of entire sections of

cities, and particularly of the burgeoning periurban areas.

Clearly, the typical ten-year census interval is a problem in

the analysis of megacities, as the metropolitan population

might easily grow by more than two million within a fiveyear period.

THE COMPONENTS OF MEGACITY GROWTH

Even if all in-migration to the megacities were somehow to

cease, cities would have to absorb huge population increments as a result of natural increase.This point is often lost

in the popular literature. In many megacities, natural

increase is and will continue to be the most important factor explaining population growth.At world level, net migration from rural to urban areas accounts for less than half of

the population growth of cities.Around 60 percent of urban

growth is due to the excess of urban fertility over urban

mortality.

A study of the components of urban growth prepared by

the United Nations Population Division found that, whereGLOBAL OUTLOOK

22

Beijing, China
as internal migration and reclassification was the source of

64 percent of urban growth in developing Asia during the

1980s (around 50 percent if China is excluded), it accounted for only 25 percent of urban growth in Africa and 34

percent in Latin America. These findings have important

implications for policymakers and planners. In regions characterized by economic stagnation, where rates of rural outmigration have declined over the past decade, such as Africa

and Latin America, the contribution of natural increase has

been strengthened. Consequently, if the growth of urban

areas is to be significantly reduced, more emphasis needs to

be given to the reduction of fertility.

Interestingly, for all of the theorizing about the linkages

between urbanization and fertility decline over the past several decades, detailed work in this area has been quite

sketchy. Using Demographic and Health Survey (DHS) data

collected between 1987 and 1993 in 14 African countries,

recent research on fertility behavior in African cities has

found that high levels of female in-migration have reduced

total fertility rates in African cities by about one birth per

woman. This influence of migration on fertility appears

consistent throughout sub-Saharan Africa, suggesting that

migration to cities may be promoting national fertility transitions in Africa. This situation is all the more ironic since

most African governments currently are quite serious about

reducing aggregate rates of population growth.Yet they are

quite insistent on curbing the growth of metropolitan areas,

mainly by retaining population in the countryside.

In a sense, the richness of this research highlights how little has been known up to now about the complex factors

involved in recent urban fertility behavior in developing

countries. Factors such as the volume and permanence of

migration, the effects of age structure, spousal separation,

exposure to modern ideas, and the changing opportunity

costs of childbearing remain understudied. Despite the

widespread acknowledgment 20 years ago that family planning was one of the most cost effective means of reducing

urban growth, virtually no work has been done on family

planning use and needs among the urban poor. Indeed, from

a policy perspective, the limited knowledge of the linkages

between rural-urban migration and, in particular, contraceptive behavior has hampered the efforts of policymakers

and program workers to design and implement effective

family planning programs which might have a significant

impact on reducing urban growth.

ATTEMPTS TO CONTROL MEGACITY GROWTH

While a considerable knowledge gap remains regarding the

complexity and future implications of demographic change

in the world’s megacities, there is a generally accepted body

of ideas in the policy arena for controlling megacity growth.

For example, the anti-urban bias finally appears to have dissipated. It is now widely acknowledged that cities are, in

general, productive places that make more than a proportionate contribution to economic growth. In retrospect, it is

perhaps astonishing that the anti-urban bias of planners,

some scholars, and government officials has continued for so

long despite apparent grounds for discrediting it. For years,

planners made futile attempts to “contain” urban growth on

the assumption that rural to urban migration could be

stopped or slowed down and that people could be relocated

from the existing urban areas. These views no longer are

accepted widely, except perhaps in Africa.

Early attempts to “contain” megacity growth ranged from

the “closed city” policies of Jakarta (1970) and Manila (1960s),

which were notorious failures, to China’s household registration system. It was long assumed that direct controls on residential mobility had little chance of success, except perhaps in

a collectivist society such as China;even this turned out not to

be the case. Despite decades of restrictions, China’s “floating

population” in its largest cities now numbers in the millions.

A number of developing countries have devoted considerable efforts to devising strategies to reduce metropolitan

growth, primarily by fostering the growth of secondary

cities and promoting regional development. Mexico is a

prime example. Since the early 1970s, Mexico has had one

elaborate plan after another—typically a new one in each

six-year presidential term of office. It is generally acknowledged, however, that these plans have had minimal impact

on influencing Mexico’s patterns of spatial distribution.

The great paradox is that profound changes have

occurred in patterns of spatial distribution in Mexico and in

other developing countries, yet regional policy is considered

to have contributed very little to it. Indeed, deconcentration

has occurred in practice when regional planning has been at

its weakest, with few governments in heavily indebted

developing countries having any funds to invest in infrastructure in the poorer regions, or to offer incentives for

industrialists to relocate to the periphery.

It is now widely acknowledged that it is counterproductive to talk about how to “control” the growth of megacities, whether through coercive measures or by channeling

growth to secondary cities. Moreover, despite the rhetoric

that still abounds, megacity size per se is not a critical policy variable. Since the 1980s, there has been a remarkable

shift of research attention from the demography of cities to

the polity of cities, with particular focus on issues of urban

management and, in the 1990s, urban governance. With

respect to management, a virtual consensus has emerged

among urban scholars that the costs and benefits of cities are

not merely a product of population size (hence growth), but

are primarily a consequence of the commitment and capaINTERNATIONAL URBAN RESEARCH MONITOR

23

How the world’s megacities are managed

in coming decades will shape patterns of

national economic growth, the settlement of vast populations and the social

and political stability of many developing countries. The stakes are high.
bilities of municipal governments to

implement policies that improve population welfare. The assumption that

good management overcomes population constraints of cities would

appear tenable based on recent history. Many cities of the world, for

instance those of recent origin in subSaharan Africa, are too big relative to

their managerial capacities. Yet some

of these “oversized” cities are quite

small, e.g., in the range of 100,000 to

200,000 inhabitants. Similarly, many

megacities—Tokyo is cited most

often—are seemingly well-managed

and, therefore, not too large.

CONCLUSION

In calling attention to the growth of

megacities, the US Central

Intelligence Agency’s Global Trends

2015, noted that “the explosive

growth of cities in developing countries will test the capacity of governments to stimulate the investment required to

generate jobs and to produce the services, infrastructure, and

social supports necessary to sustain livable and stable environments.” In coming decades, large cities will be at the

forefront of globalization and will be the principal nodes

generating and mediating the flow of capital, people, trade,

greenhouse gases, pollutants, diseases, and information. If

both urbanization and decentralization continue in the

decades ahead, cities will carry a heavy charge of responsibility for political stability, openness, economic progress, and

the quality of life in many nations. Megacities that can

become and remain more competitive in international trade

and investment are likely to grow in the future, whereas

those that cannot are likely to stagnate or decline.

The necessity for megacities to be internationally competitive in order to sustain their economic vitality in the

21st century may well create new and wide economic

chasms if governments in cities with lagging internal competitiveness do not improve urban conditions. Megacities

that continue to grow in terms of population, but lag behind

in international competitiveness and economic development, may become less able to support large influxes of population or alleviate urban poverty.

It is important to emphasize that the population of the

world’s megacities will continue to grow over the next several decades, whether or not they become more internationally competitive—indeed regardless of whether their

economies grow at all. Economically lagging metropolitan

areas in developing countries continue to attract migrants

because the “push factors” of rural poverty make even subsistence living in poor cities a more attractive alternative.

Among the megacities with the highest rates of population

growth are poor cities with sluggish economies such as

Cairo, Calcutta, Dhaka, Kinshasa and Lagos.

How the world’s megacities are managed in coming

decades will shape patterns of national economic growth,

the settlement of vast populations and the social and political stability of many developing countries. The stakes are

high. Without extraordinary efforts to develop urban

economies, especially in such a critical area as infrastructure, a segregated world economy may emerge where those

megacities that have the necessary prerequisites for integration prosper, while others fall farther and farther behind.

Unless such trends are reversed, the urban landscape in

many developing countries will be bleak, chaotic and

impoverished.•

Dr. Ellen Brennan-Galvin is Chief of the Population Policy

Section of the United Nations Population Division in New

York City.

GLOBAL OUTLOOK

24

San Juan, Puerto Rico
INTERNATIONAL URBAN RESEARCH MONITOR

25

The Workshop on Urban Governance in Major World

Cities, sponsored by the Woodrow Wilson

International Center’s Comparative Urban Studies

Project and the US Agency for International Development,

brought dozens of leading experts from cities around the

world to meet on December 7-8, 2000, at the Wilson

Center in Washington, DC. Speakers addressed emerging

governance issues in ten large metropolitan areas: Bombay,

Manila, Tokyo, Abidjan, Johannesburg, Sao Paolo, Santiago,

Moscow, and Kiev, and discussed common themes emerging

in state-society relations in these cities.

In his introduction Wilson Center Fellow Richard Stren

dubbed the workshop’s central theme as “The Irresistible

Force Meets Godzilla.” Based on his humorous metaphor,

“the irresistible force” is the emergence of large, complex

metropolitan areas affected by globalization, migration, and

the diffusion of economic and political power.“Godzilla” is

the growth of citizen mobilization which is placing increasing social demands on these cities. The meeting point

between these two dynamics is the challenge of urban governance: how to address complex problems while remaining

responsive to citizen concerns.

The emergence of mega-cities, and the concomitant

problems of urban governance on a very large scale, is a relatively new phenomenon.The social energies unleashed in

these mega-cities can be described as a “Fourth Wave.”

However, while Samuel Huntington’s “Third Wave” focuses

on regime change at the top levels of national governments,

the “Fourth Wave” is driven by grassroots expressions of

political enthusiasm and involvement in large urban regions.

Increased social mobilization directed at urban issues may

lend a high degree of legitimacy to local governments

which can respond favorably to these demands, but it

also creates problems for metropolitan leaders who are

accustomed to non-participatory planning approaches.

Tensions naturally emerge between the need for

government coordination of large metropolitan

regions and the importance of democratic participation in smaller units within these same regions. In

some cities in the developing world, this is further

compounded by the prevalence of informal networks

that have emerged to supply needs that are not met by

local governments. In many cities new strategies for

participatory governance have been initiated to

involve citizens in urban management.These initiatives

have provided encouraging, though highly uneven

experiences. However, the way to approach participatory governance differs from city to city and there is

no single strategy to build effective participation. In

some cases, municipal institutions in developing countries, which have been patterned after those of the United

States of America or of European nations, may not be fully

harmonized with local traditions and practices and thus

should be reexamined and potentially restructured.

Participants in the workshop stressed the need to find

local government mechanisms that generate civic participation and create public accountability to citizens and communities.While they acknowledged that the combination of

participation and accountability may not always lead to

more efficient city management and effective economic

performance, it will at least make the highly challenging

governance of complex, dynamic, and problematic megacities a shared enterprise between citizens and the state, and

provide greater opportunities for people and places that are

traditionally marginalized to have their voices heard and

their concerns addressed.•

Dr. Blair A. Ruble is Director of the Kennan Institute for

Advanced Russian Studies at the Woodrow Wilson

International Center for Scholars in Washington, DC. He is

coeditor of Preparing for the Urban Future, and author

of the forthcoming Second Metropolis: Pragmatic

Pluralism in Gilded Age Chicago, Silver Age Moscow,

and Meiji Osaka.

Dr.Joseph S.Tulchin is Director of the Latin American Program

at the Woodrow Wilson International Center for Scholars in

Washington,DC. He is coeditor of Preparing for the Urban

Future: Global Pressures and Local Forces.

Andrew D. Selee is a Program Associate in the Latin

American Program at the Woodrow Wilson International

Center for Scholars in Washington, DC.

Recent Wilson Center International Workshop on

Urban Governance in Major World Cities

BLAIR A. RUBLE, JOSEPH S. TULCHIN, AND ANDREW D. SELEE

Woodrow Wilson International Center for Scholars

Mexico
GLOBAL OUTLOOK

26

All cities, especially the largest ones, have to manage huge

problems at the beginning of the 21st century: economic,

ecological, and social. These problems become even more

complicated if the city also is searching for the right balance between effectiveness and democracy while simultaneously making major reforms both in the economy—

moving from planned and centralized to market-driven

and decentralized—and in politics—going from totalitarian

regime to democracy—as is the case in the city of St.

Petersburg and the entire Russian Federation.

The city of St. Petersburg is the second biggest city in

the Russian Federation, with Moscow being by far the

largest. Its current population is over 4.7 million, down

from nearly 5 million people a decade ago. As an

autonomous part of a federative state, St. Petersburg has

governing authority and political status similar to a state

government in the USA. 

The process of democratization began in 1989, when

the citizens voted for their first democratically elected city

council. In 1991, shortly after Anatoly Sobchak became

the city’s first elected mayor, and once the infamous

Communist coup called the “August putsch” was defeated by Boris Yeltsin, St. Petersburg Mayor Sobchak gave

back to the city its old name instead of the Soviet

“Leningrad.” The further development of the political

process led Russia to attempt to create a system of local

self-government for cities and other local municipalities

as a third level of public administration, beneath the federal government and the various states that comprised

the federation. In this situation two major problems connected with the largest agglomerations were addressed:

1) How many levels of administration do the cities of

Moscow and St. Petersburg need as both “states” and

“municipalities?”

2) What kind of responsibilities should be set for each

level of city government as determined in question

one above?

The first problem was solved very simply: the 1993

Constitution of the Russian Federation forbids the connection of both tasks—that of state government and local

government—in the same authority. Moscow simply

ignored the Constitution and the subsequent 1995 federal

“Local Government Act” by connecting both governmental functions in the same authorities: the “City Duma”

(combined state parliament and city council), and the city

administration. 

St. Petersburg created different kinds of governance

structures than Moscow, deliberately designed to be

much more decentralized in terms of authority, responsibility, and local accountability. The authorities of the allcity level only perform the functions of “state government”. The “state government” also oversees the second

level: 23 district administrations covering the entire city. 

The new third level was created during 1997-98 to fulfill the functions of local self- government. There are 111

municipalities inside the large city of St Petersburg: some

of them are formerly independent smaller cities and

towns, but others are simply urban neighborhoods or districts, created artificially at different times without specific historical, cultural or other distinction.

What are the main challenges and opportunities of this

relatively new and complicated multi-level management

structure? On the one hand, the city administration has

too many functions to fulfill them effectively, especially

ones connected with collecting and articulating the wishes and needs of citizens, and is responsible for too large

of a geographic area and demographic base to administer

it properly. On the other hand, the district level is nearer

to the citizens, but has no legitimacy as a local government; it only implements the decisions of the city-level.

And the municipalities are too small and too weak, lacking the necessary fiscal resources to accomplish key tasks

as the main element of the city’s democracy. At this grassroots level of urban governance, it is possible only to

speak about problems, without the means to actually

solve them.

CONCLUSION

One can envision creating different systems and structures of administration in large cities and urban regions,

but all of them need clearly definable characteristics,

which the governance system of St. Petersburg is currently lacking: 1. Rational distribution of power, resources

and functions between the levels of government; 2.

Citizens’ belief that they can truly and effectively work

with the local government to generate economic prosperity and improve quality of life in the city. Such a belief

does not yet exist in St. Petersburg, as evidenced by the

recent municipal election results in March, 2000: in most

municipal districts the citizens voted against all of the candidates and for none of them! •

Dr. Revekka Voulfovitch is an Associate Professor at the

North-West Academy for Public Administration in St.

Petersburg, Russian Federation, and a Regional Exchange

Scholar at the Kennan Institute for Advanced Russian

Studies, Woodrow Wilson International Center for

Scholars, Washington, DC.

Decentralization, Democratization, and Urban Management: 

The Case of St. Petersburg

REVEKKA VOULFOVICH

North-West Academy for Public Administration,

St. Petersburg, Russian Federation
INTERNATIONAL URBAN RESEARCH MONITOR

27

THE HOUSING CHALLENGE 

Since the first worldwide conference on housing problems in

developing countries (Habitat I) was held in Vancouver in

1976,housing has continued to be an important research concern in the urban literature on developing countries.

Approximately one-half of all urban dwellers in general are

living in housing that may be qualified as sub-standard, either

in (authorised) slums or in (unauthorised) squatter settlements.

Asia is generally considered the worst region in terms of housing with national studies giving urban slum population figures

of 54% for Indonesia, 47% for Bangladesh and 36% for India.

Most Asian countries reportedly invest no more than 3%

of their Gross National Product in housing compared with

4% in developed countries. Most are plagued by the absence

of unified housing agencies and the prevailing problem of

competition for scarce financial resources stemming from

multi-agency delivery of affordable housing for low-income

people.Against this backdrop, Hong Kong and Singapore by

contrast have made significant progress in meeting the housing needs of their population. Both cities are widely known

for their successful housing and urban development transformation in recent decades. Their experience in this achievement offers lessons for improving the housing conditions of

the urban poor and has been widely analysed and documented.The focus here is almost exclusively on Singapore housing

though the research challenge is of wider application.

Singapore’s post-independence national housing production has responded in a timely fashion to the needs of the

growing urban population. After 39 years of uninterrupted

effort and seven 5-year building programmes, Singapore has

completed more than 800,000 public housing units and associated infrastructure. Everyone is housed with a separate unit

for every household. There are poor families in the public

housing estates but there is no observable homelessness.

According to a recent report in the local newspaper, The

Straits Times, while the poor elsewhere are homeless, the

poorest 20% of households in Singapore are well housed, and

75% of them are home owners.The scenario in Singapore is

that the majority (86%) of the country’s 4 million population

are living in public housing, of which 90% are owner-occupied on 99-year leases. No other industrialised country, in

Asia or elsewhere, has combined so much public provision

with so much private and individual ownership.

Although initially built as low-cost housing for lowincome families, progressive improvements have been made

to housing space and quality over the years to the extent that

today’s public housing has become synonymous with comfortable, middle-class housing for most Singaporeans. Public

housing in Singapore is more than providing shelter. It is

also about enhancing social integration and national development. Affordable housing is available to all and targeted

subsidies are available to help households that cannot afford

minimum housing. Housing sector policy is integrated into

national economic and social planning.The housing sector

contributes towards the broad social and economic objectives of alleviating poverty, controlling inflation, generating

employment and income growth, enabling social and spatial

mobility, and improving the quality of life.The achievement

has attracted the attention of policymakers and researchers

alike. The attraction is encapsulated by Y.M. Yeung, who

observed that “from the viewpoint of urban development,

Hong Kong and Singapore are fascinating case studies

because their urban policies have been painstakingly

designed and successfully implemented. Many urban planners and policymakers from developing countries visit the

city-states and come away with the conviction that they

have seen the future and it works.”

Research has a crucial role to play in this process, it relates

directly to public policy questions at every level. It is with

such an understanding of the significance of housing research

that I and two of my colleagues have compiled an annotated

bibliography on housing in Singapore and identified possible

future lines of inquiry.A few of these are of particular significance to the policy sphere.To take one example: a common

starting premise characterizing much of the Singapore housing policy analyses is the success of its public housing. But

whatever the past successes of housing policy and however

functional it has been to the country’s economic and national growth, it cannot be assumed that the policy will be equally successful or functional as the country moves to a different stage of economic development. In other words, housing

delivery systems can be evaluated—as good or bad—only in

the specific social, political and economic context pertaining

in a particular country at a particular time. In a world

increasingly obsessed with the notion of best practices and

transferability of lessons, it is imperative that each country

seek to gain a better understanding of the way the housing

sector actually works and to know which instruments work

and which do not in their own particular context.

At present, as Singapore policymakers take strategic decisions about how the country is to most appropriately

respond to the new order of globalization and information

technology development, it will become important for them

to also re-examine—and perhaps change—their social

development strategies.When faced with the challenges of

transferring the Singapore economy into a knowledgebased economy, questions arise as to the future role of the

housing sector: what the housing market can do to adjust

itself to the new economic development scenarios. It brings

to focus policy issues necessary to facilitate this role. The

question of who, precisely, should pay for housing provision,

and how, remains one of the important issues.

Urban Housing in Asia: A Perspective from Singapore

BELINDA YUEN

National University of Singapore
Given the strong links between housing policy reforms

and concerns to reduce poverty and to reverse the deterioration of the urban environment, the focus of research on

urban housing, its role and working in the new global order,

is increasingly urgent. The results have direct bearing on

housing sector performance. It is the poor who are most disadvantaged by poorly functioning housing markets.As pointed out by the World Bank,policies that constrain market efficiency and responsiveness of the housing delivery system

could result in reduced investment, housing which is less

affordable and of lower quality, and a less desirable neighborhood environment. The housing sector must thus be seen

and managed as an important sector of the urban economy.

The economy is a major loser when the housing sector fails.

Recognition of the demographic and cultural dimension

of the housing challenge is no less important. Demographic

factors including residents’ preferences, attitudes, and circumstances are key considerations in housing supply and demand.

Changing population profile and the oncoming trend of aging

population will over time affect the housing sector outcomes.

In addition to physical design and infrastructure supply implications, there are also the macroeconomic conditions that

affect household incomes. Making appropriate housing provision for the changing population profile thus requires a better

understanding of how the residents use and relate to the spaces

and buildings.It raises questions regarding the formulation and

the power of various groups in the population on the formulation and distribution of housing provision.By elucidating the

provider-consumer dichotomy, research can enable the careful

allocation of scarce financial and land resources.

Another related area that I see offering a considerable

research challenge is high-rise, or “skyscraper” multifamily

housing. In Singapore, the national land stock of 647 square

kilometers and the needs of a growing population have led

to the deliberate choice of building high-rise, high-density

housing which is a general departure from the traditional

cultural norm of living.As cities adopt the high-rise option

to meet growing population needs, it would inevitably suggest a wider extension of research into high-rise housing. In

addition to research on the technical aspects of load, wind,

ventilation, maintenance service and green design, there is

also the equally important stakeholder analysis of user needs

and perception. This is a relatively understudied field in

Singapore and elsewhere.•

Dr. Belinda Yuen is an Associate Professor of Urban

Planning in the Department of Real Estate, School of

Design and Environment, National University of Singapore.

She is coauthor of Singapore Housing; Urban Quality

of Life; and Sustainable Cities in the 21st Century.

28

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January 2001