For those who have been reading for years about jobs being offshored from the US to China and India, it may come as a surprise that job creation is a burning issue there as well. At the recently concluded UC Berkeley- Indian cities conference in New Delhi, Rakesh Mohan, one of India’s leading economists and policymakers, asked two questions. First, “where are the future jobs going to come from in urban India?” and second, “has India missed the bus, in terms of tapping manufacturing for employment growth?” In other words, will the much heralded demographic dividend for countries such as India, which will have close to 500 million young (15-34 years) people by 2030, and an increase in the overall labor force of over 270 million in the next two decades, turn out to be a demographic disaster, severely undermining the urbanization process and its job creation potential?
After all, it’s the attraction of well paying jobs, plus the lure of urban lifestyles, that drives the process of rapid urbanization anywhere, especially in the fast growing emerging economies. The exchange of goods, services and ideas, made possible in a dense, interactive and productive environment then feeds the economic engine, further drawing in people. It is this ceaseless, dynamic cycle of life and livelihood that then gives rise to a host of other urban issues, whether relating to urban infrastructure, congestion, affordable housing, transportation, or to broader questions of urban social life and political participation. However, only the megacities seem to get any press. The second and third tier cities are frequently the anonymous workhorses of an economy, and in fast-developing economies their step-city status obscures their potential to be drivers of economic growth and urbanization.
Many urban problems in emerging economies have deep historic roots, and Indian cities, in particular, are burdened by two unique legacies. The first has a colonial origin and concerns the location of major urban centers of modern India. Many ancient and medieval nations and empires were primarily land-based. This was true of the military campaigns of Alexander of Macedonia across the Eurasian heartland, or the territorial conquests of Genghis Khan. Many, if not most of the major cities of the time were in the hinterland, controlling access to strategic land assets and straddling vital trade routes. The Mughal Empire in India, or the successive Chinese dynasties, except for the dramatic oceanic adventures of Zheng He during the Ming period, were by and large inward looking and oriented to their vast hinterlands. The rise of seafaring colonial powers led to the development of large coastal cities like Bombay and Shanghai, serving both as the locus of colonial power and as entrepôts for trade.
The geographical distribution of major cities in pre-colonial versus colonial/post colonial India and elsewhere serves as a vivid illustration of how wrenching economic and political changes can affect the urban landscape. Thus appeared the relatively recent Bombays, Calcuttas and Hong Kongs, pushing aside the Agras (Agra, where the Taj Mahal is located, was a major city under the Mughal Empire) and the Kaifengs (one of many capitals of ancient and medieval China). Cities, however, are resilient, living historic monuments and while their prospects may wax and wane, even the neglected ones do not disappear entirely and gently “into that good night” under the churning and dislocating impact of modern economic development. That path dependence and history still matter is borne out by Delhi and Beijing, both historic hinterland cities, and which have retained their importance throughout the colonial and contemporary periods. In any case, it was the pattern of trade and linkages of the colonial periphery with the core that determined urban growth rather than any organic economic process from within. It is this pattern that has left scattered across India a series of second tier cities that present a challenge for urban development, as well as an opportunity to wean away people and resources from the megapolises and their diseconomies of agglomeration.
A question frequently posed at the conference was – Can second tier cities play a positive role, both directly in the urbanization process itself by attracting people from the countryside, but also in helping mitigate some of the overgrowth of the megacities? There is an interesting example right here in the US of “alternative urban centers” that were set up deliberately, albeit with a different set of objectives and in a different context. In 32 states in the US, the state capital is in a second tier city: Albany, Sacramento, Carson City, Salem, Olympia etc., thus separating geographically the economic and political seats of power. It turns out that, by and large, the location choice process was quite idiosyncratic, with differing compulsions and histories, and largely reflected the desire of rural elites to carve out their own sphere of influence. But perhaps a more interesting question is this – what economic impact did this process have historically by creating an alternative focus of urban agglomeration? Did urban and state performance differ over time across these two different sets of states? The combination of immigration, conquest, and land settlement in the westward move across the US makes its urban history pretty much a unique case, but perhaps there is a lesson here for emerging economies to promote alternative urban centers, given how their main metros are huge agglomerations, and where most provinces/states have just one congested city that is the economic, political and cultural capital, all rolled into one.
There is yet another legacy, of a somewhat different nature, that India must grapple with. Unlike other countries with a democratic form of government, democracy in India preceded both a full blown market economy as well as rapid urbanization. Most advanced countries in Europe and the US reached India’s present day level of urbanization (30%) in the second half of the 19th century, if not earlier. The U.K. (and the US) developed into industrial and global powers at times when large segments of the population, including women and minorities, did not have the right to vote. Indian authorities and the political class, therefore, have to continuously reconcile, to at least some extent, the interests of the poorest and the most-dispossessed with the demands and unequal consequences of urgent urbanization. Civil society participation and political empowerment play a much larger role in Indian urbanization than they ever did in democratizing Europe or the US. Riding roughshod over public opinion is not, usually, an option. But, since the votes are in the countryside, channeling financial resources to the urban centers, particularly to second-tier cities, is fraught with political risk. The challenge, therefore, is to figure out how to promote the requirements of urban development without succumbing to gridlock: the wheels of a democracy may turn slower but hopefully they will go down a more inclusive path.