STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

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cities, the business environment is bogged down by the labyrinth of bureaucracy. For instance, it takes an average of 119 days and 13 procedures to register a business. 35 Anyone wishing to start a business will require approval from no less than 12 different government agencies. 36 As one store owner lamented: “You need a document. But to have that document, you need to hand in seven documents. And to get each of these seven, there’s a different demand.” 37 Poorly developed human capital Education is essential not just for nurturing, but also for attracting talents, and bolstering innovation. The development of Boston, Silicon Valley, Oxford and Cambridge (UK) clearly benefited from the presence of reputed universities. 39 Availability of highly-skilled human capital in turn attracts and generates innovative and knowledge-based industries. Within the OECD, the productivity of some metropolitan areas has been attributed to human resource endowments. For instance in Montreal, the relatively low productivity of high value-added sectors has been linked to lower educational attainment and inadequate investment, particularly in small and medium-sized enterprises. 40 Similarly, in Istanbul and Mexico City, productivity and hence, prosperity, is hampered by low skills, as well as the extent of the informal sector, where adult education and skill upgrading are difficult to provide. 41 Attracting and cultivating talents has FACT The myriad of laws, taxes and regulations and bureaucracy involved in registering or running a business has been cited as one of the main reasons why 40 per cent of Brazilian startup businesses hardly survive for more than two years. The cost of bureaucracy is staggering; in 2010 bureaucracy cost the Brazilian economy 46.3 billion reals. 38 This has implications for the prosperity of cities in Brazil. become common practice for cities in the pursuit of prosperity. From New York, to Boston, London to Vienna, Dubai to Singapore, or Bangalore to Shenzhen, many cities can illustrate this phenomenon. Munich’s experience with vocational education can be particularly inspiring. The capital of Bavaria as well as the economic, cultural, technological and transportation centre of South Germany, Munich is one of Europe’s most prosperous cities. It ranked 101 FACT From Comparative Advantage to Urban Prosperity Just as a favourable business environment enhances the prosperity of urban areas, the high cost of doing business can serve as an impediment to cities becoming more prosperous. A high cost of doing business has obvious implications for investment, productivity, employment, income, taxation and poverty reduction – all of which impact on the prosperity of cities. 8th for technological innovation (as measured by international patent applications), among the 500 sample cities in the 2010 Global Urban Competitiveness Ranking; its GDP per capita was USD 58,197 in 2007 with three per cent economic growth on an annual average basis in 2001-2007. 42 Low levels of POLICy human capital or labour can hinder urban prosperity. When it fails to develop and nurture human resources, a city will be less likely to be prosperous than those with highly educated labour forces. Munich’s manufactured products enjoy a good international reputation and export competitiveness. The city’s large proportion of high-skilled workers, nurtured through its vocational education system, has been crucial to the city’s prosperity. High crime rates Crime is a major deterrent to domestic and foreign investment and can cause capital flight. In Africa, more than 29 per cent of business people report that crime was a significant investment constraint. 43 Investors generally worry about violent crime for fear of direct losses to business and lack of security for staff. High crime rates can have a crippling effect on the prosperity of cities. In Lusaka, for instance, fear of crime in the poverty-stricken community of Chawama can prevent teachers from showing up at work. 45 In South Africa, a survey of major cities showed that over a quarter of respondents would not consider opening a business due to fear of crime, with more than 25 per cent saying they were reluctant to allow their children to walk to school, while 30 per cent stopped using public transportation. 46 In large FACT According to the local experts surveyed by UN-Habitat, crime emerges as another major impediment to the prosperity of cities. No city can claim to be truly prosperous if it is crimeridden and the population lives in a perpetual state of insecurity.
State of the World’s Cities 2012/2013 FACT In Latin America, the financial burden of violent crime is equivalent to 25 per cent of GDP in Colombia and El Salvador; 12 per cent in Mexico and Venezuela; 11 per cent in Brazil; and five per cent in Peru. 44 In Jamaica, crime has a pernicious effect on national tourism and is often cited as a major reason for the country’s weak economy. Endnotes 1 UN-Habitat (2008) State of the World’s Cities Report 2008/09: Harmonious Cities, Earthscan, London. 2 Shabou, A., N. Soboh, K. Jalouka, and D. A. Thaib (2011) City Report on Aqaba, Unpublished UN-Habitat background study for “State of the World’s Cities Report 2012/2013” 3 UN-Habitat (2008) op.cit. 4 Costas, S. (2011) Urban Tourism and Urban Change: Cities in a Global Economy, New York, Routledge 5 Spence, M (2008) “Preface”, in Urbanization and Growth, Spence M. , P.C. Annez., and R. Buckley (eds.), Commission on Growth and Development, World Bank, Washington DC. 6 Annez, P.C. and R. Buckley (2008) “Urbanization and growth: Setting the context”, in Urbanization and Growth, Spence M. , P.C. Annez., and R. Buckley (eds.), Commission on Growth and Development, World Bank, Washington DC. 7 UN-Habitat (2012) The State of Arab Cities 2012: Challenges of Urban Transition, UN-Habitat, Nairobi. 8 UN-Habitat (2006) State of the World’s Cities 2006/07, Earthscan, London. 9 UN-Habitat (2004) State of the World’s Cities 2004/05, Earthscan, London. 10 Ibid. 11 Scipes, K. (2006) ‘Venezuela and South Africa: Redistributive policies vs. neo-liberal economic policies’, Third World Traveler, http://www.thirdworldtraveler.com/ Venezuela_page/Venez_SAfrica_EconPolicies.html 12 Hailu, D. and F. V. Soares(2008) ‘Cash transfers in Africa and Latin America: An overview”, Poverty in Focus, Number 15, International Policy Centre for Inclusive Growth, Brasilia, pp: 3-5. 13 Britto, T (2008) ‘Brazil’s Bolsa Família: Understanding its origins and challenges’, Poverty in Focus, Number 15, International Policy Centre for Inclusive Growth, Brasilia, pp: 6-7. 14 Soares, F. V., S. Soares, M .Medeiros, , and R. G. Osório, (2006) ‘Cash transfer programmes in Brazil: Impacts on inequality and poverty‘ , International Policy Centre for Inclusive Growth working Paper, Number 21, International Poverty Centre Brasilia 15 UN-Habitat (2009) Planning Sustainable Cities: Global Report on Human Settlements 2009. Earthscan, London 16 UN-Habitat(2009) op. cit. 17 Sharma, S. (2005) ‘Democracy, good governance, and economic development’, Taiwan Journal of Democracy, vol 3 (1), pp: 29-62. 18 Sharma, S. (2005) op. cit. 19 Holcombe, R. G. (2012) ‘Democracy and Prosperity,’ in Young, B. C. (ed.) Institutional Economics and National Competitiveness, Routledge, London 20 World Bank and International Finance Corporation (2011) Doing Business 2012: Doing Business in a More Transparent World, World Bank.Washington DC 21 The Economist (2012) ‘Business in Rwanda: Africa’s Singapore?’, The Economist, February 25, http://www.economist.com/node/21548263 22 World Bank (2009) Getting people and traffic moving again in Lagos, http://web. worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/IDA/0,,contentMDK:22229765~men uPK:4754051~pagePK:51236175~piPK:437394~theSitePK:73154,00.html 23 BBC (2011) ‘South Africa Gautrain opens Johannesburg-Pretoria route’, BBC News, August 2, http://www.bbc.co.uk/news/world-africa-14371113 102 Latin America cities, high numbers of murders deter people from working evenings and at night. 47 All these factors have implications for local economies, quality of life and the attractiveness of public spaces, on top of lost opportunities for socioeconomic advancement that are so crucial for the prosperity of cities. 24 Hidalgo, D.(2008) ‘Why is TransMilenio still so special?’, The City Fix, August 5, http:// thecityfix.com/blog/why-is-transmilenio-still-so-special/ 25 Sharma, S. (2005) op. cit. 26 Oyeyinka, B. O. (2012) ‘Institutional capacity and policy for latecomer technology development’, International Journal of Technological Learning, Innovation and Development, Vol. 5, (1/2), pp. 85-110. 27 UN-Habitat (2007) Enhancing Urban Safety and Security: Global Report on Human Settlements 2007,Earthscan, London 28 Dong, B and Torgler, (2010) The Consequences of Corruption: Evidence from China, Center for in Economics, Management and the Arts Working Paper No. 2010-06, http://www.crema-research.ch/papers/2010-06.pdf 29 Arimah, B. C. (2005) ‘What drives infrastructure spending in cities of developing countries?’, Urban Studies, Vol 42 (8), pp. 1345-1368 30 Escribano, A. ,J.L. Guasch, and J. Pena (2008) ‘Impact of Infrastructure Constraints on Firm Productivity in Africa, Africa Infrastructure Diagnostic Study Working Paper 9, World Bank, Washington, DC. 31 Foster, V., and C. Briceno-Garmendia (2010) Africa’s Infrastructure: A Time for Transformation, World Bank, Washington, DC. 32 African Economic Outlook (2012) Progress in Infrastructure Developments, http://www.africaneconomicoutlook.org/en/outlook/trade_policies/progress-ininfrastructure-developments/ 33 Bloom, D. E., D. Canning, and G. Fink (2008) ‘Urbanization and the wealth of nations’, Science, Vol. 319, pp. 772 - 775. 34 World Bank and International Finance Corporation (2011) op. cit. 35 Ibid. 36 Gomes, L . (2012) ‘Brazil’s labyrinth of bureaucracy’, BBC News, May 16, http://www. bbc.co.uk/news/business-18020623 37 Ibid. 38 Gomes (2012) op.cit. 39 Pengfei, Ni (2011) Driving factors of Prosperity: An Empirical Analysis Global Cities, background paper for ‘State of the World Cities Report 2012/13’ 40 OECD (2006) Competitive Cities in the Global Economy, OECD, Paris 41 Ibid. 42 Pengfei, Ni (2011) op. cit. 43 UNODC (2005) Crime and Development in Africa, http://www.unodc.org/pdf/ African_report.pdf 44 Moser, C. , A.Winton, and A.Moser (2005) ‘Violence, Fear among the Urban Poor in Latin America’ In The Urban Poor in Latin America, Fay, M (ed.) World Bank, Washington, DC. 45 Moser, C. O. N. and J. Holland (1997) ‘Confronting crisis in Chawama, Lusaka Zambia’, Household Responses to Poverty and Vulnerability, Vol 4, Urban Programme Management Policy Paper 24, World Bank, Washington, DC. 46 UNODC (2005) op.cit. 47 Hamermesh, D. S. (1998) Crime and the Timing of Work, National Bureau of Economic Research Working Paper 6613,NBER, Boston
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PRODUCTIVITY ENVIRONMENTAL SUSTAINA
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Copyright © United Nations Human S
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Foreword This is a time of crises.
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Acknowledgements CORE TEAM Director
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Chapter 1.1 Conceptualizing Urban P
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State of the World’s Cities 2012/
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Part Two
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Chapter 2.1 Productivity and the Pr
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Chapter 2.2 Urban Infrastructure: B
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Page 104 and 105: Chapter 3.2 Innovating to Support t
Page 106 and 107: Innovating to Support the Transitio
Page 108 and 109: model to rebuild local government a
Page 110 and 111: exceptions, modern urban planning h
Page 112 and 113: Working on the five ‘spokes’: I
Page 114 and 115: As suggested earlier, it is in the
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Page 118 and 119: Box 3.2.3 Individual versus collect
Page 120 and 121: uilding codes to support urban refo
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Page 136 and 137: Country/City InDIA Table 4 City Pop
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