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

The 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 UN-Habitat 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 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.

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 US economy, the contribution of New York would be larger than the GDP of many nations including some prominent ones such as Spain, Canada, South Korea and even Russia

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 GDP of many nations including some prominent ones such as Spain, Canada, South Korea and even Russia.

Globalization under test

Coronavirus pandemic has put the globalization under test like never before. It will be hype to say that the pandemic will reverse the globalization trends but it is going to have some severe impact on the concept of globalization as perceived in Before Corona (BC) world. In Europe, citizens from the member states moved freely. During the pandemic, the nations have sealed their borders and at some places countries even erected barriers and walls to stop free movement. Is it going to be a normal? This will completely depend on the time frame of this crisis.
This will surely have an impact on economies of the cities. Cities will have to rethink how to become self-reliant. Many governments including India have started focusing on becoming self-reliant. Many companies in the countries where there was no lockdown also faced severe challenges in operation because the supply chain was disrupted and the supply of essential components for manufacturing stopped. Countries also faced difficulty in getting the medical supplies including face masks, ventilators, Personal Protective Equipment (PPE). Many countries depend a lot on China for supplies as the country accounts for almost 16 per cent of global output. The world of business is not going to be the same again. However, globalization is not just about economic and trade relations. Scientists around the world are working on the same vaccine together and making progress. The definition of globalization may see a tweak in After Corona world.
Covid-19 has once again brought our attention back to the sore relation between nature and humans. Thomas Friedman, a famous columnist of the New York Times, rightly said in one interview recently that the world has seen three and a half pandemics in last two decades. First, the geopolitical pandemic 9/11 terrorist attack, the financial pandemic-2008 recession, health pandemic-Covid-19, and the remaining half is about the ongoing climate change. He said that when the last one hits us, it will be the mother of all pandemics humans have ever seen.
This is a known fact that economic independence of cities strengthens local governance. The classic example is power of elected local representatives in Mumbai. The Mayor and corporators of BMC wield more power than any other mayor because the corporation generates funds for its expenses and is not dependent on the mercy of the state finance commission for grants. In the new normal, city leaders and policy makers should think in this direction too and make local governance stronger.