Category: Cities and Urbanization

Moving Mountains

Golf, not Chess

Economic growth in a sense, and to a much larger extent economic development, is more akin to a game of golf than a game of chess. In golf, the opponent’s moves matter very little; you may as well play by yourself and later compare scores if needed. In chess, your move depends on how your opponent has moved and how he is likely to respond to your move. In other words, chess is a strategic game while golf is not. All this is very broadly speaking, naturally. I don’t mean to imply that there are no dependencies among economies as they grow; what I mean is that, especially for a large economy like India, how much it produces and how determines how materially prosperous it is and is independent of how other economies are growing. For strictly benchmarking purposes, one can glance over at the neighbors. And if one is smart, one can learn from the experiences of those neighbors. Still, when it comes to economic growth, it is largely the case that you are playing against yourself.

Here I want to glance at India’s large northern neighbor and recently a strategic competitor in the fiercely competitive game for control of scarce resources. China has been moving mountains — quite literally as you will soon note — for quite a few years for growing its economy. From an Indian perspective, it is a chilling reminder that there are no shortcuts to economic growth and that it takes something special in terms of will and perseverance to overcome the ill-effects of flawed economic policies and failed leadership. It is also a story of hope and the indomitable human spirit, a story of almost superhuman striving by mere mortals.
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India Cannot Afford Villages

“Can India Afford its Villages?” is the title of an opinion piece in today’s livemint.com (a joint HT and WSJ newspaper). The subtext says, “The answer to the problems of our rural economy paradoxically lies in urban development.” If you have been reading this blog for a bit, you would immediately suspect that I wrote that piece. Partly so. I co-authored the piece with Reuben Abraham.

India Needs Cities

Well, well, what do you know! Just as I had finished a series on why India needs to have cities for its economic growth and therefore development (see the last post in the series, Make No Little Plans), my friend Alok pointed me to a Scientific American report dated 17th April by Nikhil Swaminathan titled “If You Can Make it There… Cities Are the Greatest Generators of Innovation and Wealth.” He writes of a study that “finds increased social interaction of urban life fuels leads to a more productive populace.”

I take the risk of quoting that report in full just in case one of these days it goes behind a subscription wall.
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Make No Little Plans

Think Big

There is something in the nature of the world that it is sometimes paradoxically more difficult to make small changes than to make big ones. Logically consistent big changes are more likely to succeed because of the interconnectedness of the world.
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A Forest Fire

Flashback (Part 2)

“It began with a simple realization that no one is as smart as we are. That is, a collection of very smart people is smarter than any one person however smart. Experts and expertise matters, and therefore amateurs and novices cannot be as good in figuring out the choices that confronted them. The collective wisdom of a group of smart people articulated a vision and an associated roadmap.”
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The Future Past

Flashback

The year is 2020. For nearly 12 years, India has seen an average annual GDP growth rate of over 12 percent more than quadrupling the per capita GDP from US$500 in 2008 to $2000, placing India in the league of middle-income economies. Stark poverty is a thing of the past. In much less than a generation, the population transitioned from being 70 percent rural to being less than 20 percent rural. Agricultural labor is only 15 percent of total labor participation, down from 60 percent in 2008. Farm incomes are six times what they used to be. The $3 trillion economy shows no signs of slowing down.
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Pune DeCi

“Pune DeCi” is a designer city started in 2010 and completed by 2016. Just 30 kilometers outside the old city of Pune, about 100 square kilometers of land was acquired. The government of Maharashtra, the state where Pune is located, was a partner in the “Pune DeCi Development Authority” and had a stake of 20 percent in the project for which it supplied all the land which was basically non-prime land. Long term bonds raised the approximately $1 billion initial investment required for the first improvements.
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Land Development

When I first moved to the US, I was struck by the phenomenon of shopping malls located far away from the city, about an hour along some highway. Land, it occurred to me, was cheap outside the city and what they did was to build these huge malls that were in some sense islands of urban activities in the middle of rural areas.
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Coordination of the Factors

Cities are engines of growth because they “manufacture” wealth. That is why rich economies are predominantly urban, and those economies that are largely rural are poor. Therefore the transition from a poor economy to a rich one depends on the transition of the majority of the population from being rural to urban. The scale and quality of the basic habitation unit determines the success of an economy. A large number of small villages is sufficient for poverty; a number of large cities is necessary for prosperity. Economic growth is both a cause and consequence of urbanization, as can be seen anywhere around the world.
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