Leaderspeak | Urban Economy
Cities to play major role in global economic revival Will cities be able to support the world at large to get back on its feet? The answer is yes. Cities will pave a way for swift economic recovery and teach us the new way of life through innovation in preventive health care and improvements in existing health infrastructure in urban centres
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he present health crisis has alerted city leaders to become more cautious about the effectiveness of their resilience and response system in a time of crisis. And, the alert is not just indicating towards the physical safety but also economic flexibility. The crisis has underlined that the problem could come from anywhere and cities will have to be prepared for anything and everything. Cities have been preparing themselves to be disaster resilient based on their assessment of their geographical conditions and risk profile. A majority of cities were not prepared to deal with a pandemic and cope up with its economic fallout, business closures, spike in unemployment rates, large scale migration, etc. Cities have always been the growth engines but their role will be tweaked in the new normal post-COVID. Rural workforce has been coming to cities but the crisis had been a jolt for them as urban centres could not support them financially in the time of crisis hence India witnessed the biggest reverse migration in its history. Former Executive Director of UNHabitat Joan Clos had said during his tenure (2010-17) that urbanization is a complex reality: it delivers wealth and prosperity, but at the same time it has a cost. A financial framework must be established to cover those costs through taxation, along with public policies to keep the city in good shape. Urbanisation sometimes seems to emerge spontaneously, often in
24 July 2020 | www.urbanupdate.in
the form of slums, but it needs to be improved through formal processes such as urban planning, urban design, rules and regulations.� His thoughts are relevant. Cities will not just have to revive their economiesbut also create a sustainable financial model that improves quality of life of their citizens equitably and strengthen urban local governance. Cities have always emerged victorious from crisis like situations and some of them have led by example in this pandemic. Some cities have learned their lessons and have begun their preparations to face such eventualities. The challenge is more daunting for the cities which have poor economic base and the crisis has weakened it further. The cities will have to look beyond the usual ways of going about their businesses and find out a suitable financial model to sustain their growth and rebuild the confidence of their citizenry and outstation workforce alike.
Urban economy
It is well-know that cities account for almost 80 per cent of global GDP. If we look at individual cities in different countries, their share in GDP is far greater than their share of national population. In India, Mumbai, among 4000 odd municipal bodies, accounts for approximately USD 350-400 billion out of USD 2.7 trillion of national GDP. It means the city alone accounts for 7.5 per cent of India’s GDP. Delhi is also close with contribution of approximately USD 300 billion. The trend is similar in other countries. The former executive director
of UN-Habitat wrote in one of his articles about the role of cities in global economy. In the article, he has highlighted the contribution of some of the big cities of the world and their economic significance. For instance, Paris hosts 16 per cent of France’s population but contributes around 26 per cent to national GDP. Kinshasa of the DRC accounts for 85 per cent of national GDP with only 13 per cent of its population. Metro Manila of Philippines contributes about 47 per cent to national GDP and has 12 per cent share of national population. There was no separate data available for New York City but some studies confirm that New York State contributes about 8 per cent and the majority chunk comes from the New York City. Considering the size of the US economy, the contribution of New York would be larger than the
